Pennsylvania Code & Bulletin
COMMONWEALTH OF PENNSYLVANIA

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The Pennsylvania Code website reflects the Pennsylvania Code changes effective through 52 Pa.B. 6342 (October 1, 2022).

10 Pa. Code § 304.061. Free credit balances.

§ 304.061. Free credit balances.

 (a)  A broker-dealer registered or required to register under the act may not use funds arising out of a free credit balance carried for the account of a customer in connection with the operation of the business of the broker-dealer.

 (b)  The prohibition contained in subsection (a) does not apply if the broker-dealer has established adequate procedures under which each customer for whom a free credit balance is carried will be given or sent a written statement which:

   (1)  Informs the customer of the amount due to the customer by the broker-dealer on the date of the statement.

   (2)  Contains a written notice that:

     (i)   Funds are not segregated and may be used in the business of the broker-dealer.

     (ii)   Funds are payable on the demand of the customer.

     (iii)   Is sent no less than once every 3 months together with or as a part of the customer’s statement of account.

Authority

   The provisions of this §  304.061 amended under section 202.C of the Department of Banking and Securities Code (71 P.S. §  733-202.C); section 609(a) of the Pennsylvania Securities Act of 1972 (70 P.S. §  1-609(a)); and section 9(b) of the Takeover Disclosure Law (70 P.S. §  79(b)).

Source

   The provisions of this §  304.061 adopted March 29, 1974, effective March 30, 1974, 4 Pa.B. 582; transferred and renumbered from 64 Pa. Code §  304.061, December 14, 2012, effective December 15, 2012, 42 Pa.B. 7533; amended January 12, 2018, effective January 13, 2018, 48 Pa.B. 389. Immediately preceding text appears at serial page (364767).

Cross References

   This section cited in 10 Pa. Code §  102.021 (relating to definitions).



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