Series 28: Non-Purpose Credit And Other Good Faith Activities

Non-Purpose Credit and Other Good Faith Activities

Certain types of customer activities must also be conducted in a good faith account, even if they involve the financing of equities transactions. Among these types of activities are the following:

Arbitrage. Arbitrage is the simultaneous purchase and sale of a security in different markets to take advantage of a difference in prices. Broker-dealers may finance bona fide arbitrage transactions for their customers on good faith margin.

Prime broker transactions. A prime broker is a large brokerage firm that offers a variety of services to large institutional clients, such as h