Series 28: Joint Back Office Arrangements

Joint Back Office Arrangements

Recall that Regulation T allows registered broker-dealers to establish a joint back office arrangement by acquiring ownership in a single clearing firm. While this provides JBOs the advantage of good faith credit under Regulation T, FINRA does require the JBO firm and its participating members to meet certain equity and net capital requirements. A JBO member firm must:

• • Maintain a minimum tentative net capital of $25 million
• • Deduct from net capital the haircut requirements in the accounts of the participating broker-dealers in excess of the equity maintained in their accounts
• • Main