Nasdaq Options Rule 6D

Key provisions:

• JBO participant eligibility: Firms using Joint Back Office (JBO) arrangements must:
  • be registered broker-dealers;
  • meet applicable SEC net capital requirements;
  • maintain at least $1 million in account equity at each carrying broker;
  • satisfy ownership standards; and
  • have access to a qualified Series 27 principal.
• Capital and margin controls: If a JBO participant’s equity falls below $1 million, additional funds or securities must be deposited within five business days. Otherwise, the account becomes subject to standard customer margin requirements.
• Clearing participant obligations: Clearing firms carrying JBO accounts must:
  • meet heightened net capital thresholds;
  • maintain minimum equity levels for JBO accounts; perform daily capital adjustments for deficiencies;
  • establish written ownership standards, and
  • implement risk management controls.
• Regulatory oversight: Clearing firms must notify their designated regulator before carrying JBO accounts and promptly report capital deficiencies to Nasdaq Regulation.
• Scope: JBO participants receive limited treatment similar to self-clearing firms solely for credit extension and margin purposes.