Series 28: Reduction Of Business

Reduction of Business

A member firm that carries customer accounts or clears transactions must reduce its business to a point that enables its available capital to exceed its net capital requirements when any of the following conditions continue to exist for more than 15 consecutive business days:

• • Net capital is less than 125% of its minimum net capital requirement
• • The member is subject to the aggregate indebtedness requirement, and its aggregate indebtedness is more than 1,200% of its net capital
• • The member elects to use the alternative method of computing net capital, and its net capital is less than 4% of its aggregate debit items
• • The member’s deduction of capital withdrawals scheduled during the next six months would result in any one of the above conditions

FINRA may issue a notice directing any such member to reduce its business to a point enabling its available capital to exceed the minimum net capital requirement.

A business reduction may include promptly delivering all fully paid securities in the member’s control, introducing a portion of its business to another firm on a fully disclosed basis, reducin