The Market Access Rule

What this video covers

• Why unfiltered sponsored access (naked access) is strictly prohibited, and why every order must pass through the broker-dealer's risk controls first
• The four mandatory control categories: pre-trade financial controls, pre-trade regulatory controls, erroneous order controls, and post-trade surveillance
• The critical distinction between pre-trade financial controls (credit and capital limits) and pre-trade regulatory controls (short-sale locates, halted securities, alternative uptick rule)
• Why a control system that merely flags a non-compliant order instead of blocking or rejecting it fails the Market Access Rule
• What direct and exclusive control means, why the broker-dealer cannot delegate controls to the customer, and why documented due diligence is required for every threshold
• The annual review requirement and why the chief executive officer (CEO), not the chief compliance officer (CCO) or trading supervisor, must personally certify control effectiveness