Responsibilities of a Qualified Block Positioner
Chapters in this video
- 0:00 Regulation U and qualified categories
- 1:27 Shared registration and net capital basics
- 2:30 Capital thresholds and flat million requirement
- 3:38 Lesser formula and six-security example
- 5:08 OTC and third market conduct differences
- 7:01 Block positioning three-step flow
- 9:21 Rapid-fire exam recap
What this video covers
- Why qualified Over-the-Counter (OTC) market makers, qualified third market makers, and qualified block positioners are Regulation U categories, not the standard statutory market maker definition
- The shared entry requirements: registration with the Securities and Exchange Commission (SEC) and compliance with the net capital rule
- Why a qualified block positioner requires $1,000,000 in net capital with no per-security add-on
- How the OTC and third market maker capital formulas use the lesser amount and apply per-security add-ons only after five securities
- Why a block is measured by current market value of $200,000 or more, not by the number of shares
- The three block positioner conditions: positioning the block, using reasonable diligence to rule out equivalent or better terms elsewhere, and selling as rapidly as possible
- Why the rule has no fixed disposal deadline, and why a customer who is a partner or connected entity creates an exam issue
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