Series 22: Deferred Payments

Deferred Payments

The Securities Exchange Act generally prohibits a broker-dealer from extending or maintaining credit in connection with the distribution of a new issue in which it is participating. The Act does allow for exceptions, and an SEC ruling exempts certain DPPs. DPP offerings that are registered with the SEC and intrastate DPP offerings may be paid for in installments. The SEC calls them mandatory deferred payments, and they are allowed as long as these additional conditions hold:

• At least 50% of the purc