2.8.9.1. Required Coverage
Firms with net capital requirements under $250,000 must carry the greater of $100,000 or 120% of their net capital requirements in fidelity bond coverage.
Firms with net capital above $250,000 must follow the tiered coverage:
|
Minimum Coverage |
|
|
Net Capital Requirement |
Minimum Fidelity Coverage |
|
$250,000–300,000 |
$600,000 |
|
$300,001–500,000 |
$700,000 |
|
$500,001–1,000,000 |
$800,000 |
|
$1,000,001–2,000,000 |
$1,000,000 |
|
$2,000,001–3,000,000 |
$1,500,000 |
|
$3,000,001–4,000,000 |
$2,000,000 |
|
$4,000,001–6,000,000 |
$3,000,000 |
|
$6,000,001–12,000,000 |
$4,000,000 |
|
$12,000,001 and above |
$5,000,000 |
Deductibles may be up to 25% of the minimum coverage provided in the bond, but any deductibles greater than 10% must be deducted from the firm’s net worth in the net capital calculation.
Each firm must conduct an annual review of i