SEC will be scrutinizing broker-dealer subaccountsPosted by RJ and Makay on Oct 03, 2011 |
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The Securities and Exchange Commission (SEC) has put broker-dealers on-notice that it will be closely watching their procedures to ensure they do not violate a new subaccount market access rule. Rule 15c3-5 requires broker-dealers to have sufficient risk management controls and supervisory procedures in place to manage the financial and regulatory risks incumbent with providing customer access to broker-dealer trading systems and order execution technology.
Ameriprise Financial Inc. (AMP) announced today that it has agreed to sell Securities America Financial Corporation and its subsidiaries to Ladenburg Thalmann Financial Services, Inc. (LTS) for $150 million in cash. The deal is expected to close by the end of the year and will add about $450 million in annual revenue for Thalmann. The deal includes additional payments to Ameriprise if Securities America hits performance targets in 2012 and 2013.
Broker-dealers have faced numerous pressures the last few years, not the least of which is investor anxiety about the markets. Following last week’s market swings, small and mid-size broker-dealers expect reduced trading volumes in the coming months that will squeeze operating margins and possibly force some closures. Regulatory reform has added to these pressures, according to broker-dealer executives.
