Securities Regulation Daily Wrap Up, BROKER-DEALERS—SEC extends compliance date for daily reserve computations and deposits, (Jun 26, 2025)

By Anne Sherry, J.D.

The Commission granted the industry’s request for a six-month extension.

The SEC extended the compliance date for daily computation of reserve requirements under the broker-dealer Customer Protection Rule. The compliance date is now June 30, 2026, a six-month respite from the original date of December 31, 2025. The Commission said that the extension will allow additional time for broker-dealers to develop policies and procedures, make any necessary operational changes, and test their new systems for compliance (Extension of Compliance Date for Required Daily Computation of Customer and Broker-Dealer Reserve Requirements under the Broker-Dealer Customer Protection Rule, Exchange Act Release No. 103320, June 25, 2025)).

Amendments. At the end of last year, the SEC finalized amendments to the Customer Protection Rule to require certain broker-dealers to calculate reserves and make required deposits daily rather than weekly. The amendments addressed a mismatch between the amount on deposit and the net cash owed to customers and PAB (proprietary accounts of broker-dealers) account holders. By shortening the time between required computations and deposits, the amendments were intended to reduce the risk that a carrying broker-dealer that fails will be unable to return all cash and securities owed in an orderly self-liquidation.

As recompense for the additional burden imposed by daily computations, the amendments lowered the debit reduction by broker-dealers that perform a daily reserve computation from 3 percent to 2 percent.

Extension. Carrying broker-dealers that exceeded the $500 million threshold for average total credits would originally have been required to implement daily computations by December 31, 2025. The extension pushes this out to June 30, 2026. Firms will determine whether they meet the $500 million threshold by using each of the 12 month-end FOCUS reports from January 31, 2025, through December 31, 2025.

Industry representatives and carrying broker-dealers had reported that additional time was needed to implement the rule changes. On behalf of its member broker-dealers, SIFMA wrote the SEC to ask for a six-month compliance extension. The letter stated that the extra time was needed due to the complexities of planning and developing appropriate policies, procedures, and systems necessarily to automate and implement a daily reserve computation.

SIFMA also said that each carrying broker-dealer needed an individualized approach based on its individual circumstances, and that some would need to hire more staff.

The SEC agreed with these arguments. In addition to allowing more time to develop the policies and procedures and increase staffing, the extension will facilitate an orderly transition to the new daily requirements, the rule release states. It will also provide more time for carrying broker-dealers to test their new systems, including by performing various test reserve computations.

“The days of unreasonable deadlines have passed,” said SEC Chairman Paul S. Atkins. “I am pleased the Commission agrees that additional time is necessary to allow broker-dealers to avoid operational challenges with meeting the initial compliance date.”

This is Exchange Act Release No. 103320.

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