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FINRA Rule 4110

Outlines the requirements for capital compliance, including net capital and net worth requirements, and restrictions on withdrawals, loans, and other financial transactions for carrying and clearing members.

Rule Overview

Jurisdiction: United States

Regulator: FINRA

Topic: Capital Requirements

Overview
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Further Reading

This rule is designed to protect investors and ensure the financial stability of carrying and clearing members by prescribing greater net capital or net worth requirements when necessary.

The rule also restricts members from withdrawing capital, paying dividends, or making loans that would reduce their equity, and requires prior written approval from FINRA for certain transactions.

Additionally, the rule outlines specific requirements for sale-and-leaseback arrangements, factoring, financing, loans, and similar arrangements, as well as subordinated loans and capital borrowings.

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Further Reading

FINRA Reg Notice 09-71 Go to https://www.finra.org/sites/default/files/NoticeDocument/p120499.pdf