How To Guide For: Understanding The Customer Protection Rule Initiative

The U.S. Securities and Exchange Commission(SEC) issued a Customer Protection Rule Initiative requiring firms to self-report customer protection related issues by November 1, 2016, in order to receive favorable settlement terms. After that deadline date, the SEC would conduct targeted sweeps of broker-dealers' customer protection environments. According to the U.S. Securities and Exchange Commission website -- The Customer Protection Rule Initiative is intended to address historical or ongoing violations of Section 15(c)(3) of the Securities Exchange Act of 1934 and Rule 15c-3 thereunder. Today the U.S. Securities and Exchange Commission announced that Morgan Stanley & Co. LLC has agreed to pay $7.5 million to settle charges it used trades involving customer cash to lower the firm's borrowing costs which violates the SEC's Customer Protection Rule. To get more information on the Customer Protection Rule and the SEC charge against Morgan Stanley click on the pictures below to read the articles.