The Securities and Exchange Commission has approved a rule change clarifying the net capital treatment of certain stock loan transactions processed through OCC.
SEC rules governing securities lending require broker-dealers to take a capital charge associated with collateral posted in certain stock borrow transactions. In December, OCC filed the rule change to clarify the regulatory treatment under Rule 15c3-1 of collateral and margin posted by clearing members for transactions through their participation in one of OCC’s stock loan programs.
The rule change means firms would not be required to take a deduction from net capital for stock loan transactions while participating in OCC’s Stock Loan/Hedge or Market Loan programs as the collateral related to the loaned stock is secured and offset in OCC’s margin system.