The Securities and Exchange Commission is warning broker-dealers it will scrutinize the procedures they use to ensure they don't run afoul of the new market access rule when dealing in subaccounts used by disreputable day traders.
In a communique made on Sept. 29 entitled "National Exam Risk Alert," the SEC's Office of Compliance Inspections and Examinations says in many cases, the registered broker-dealer with subaccounts will obtain information only with respect to its customer, the owner of the master account. That means, the broker-dealer won't know who is using its market participant symbol --or MPID-- to trade. That lack of knowledge opens the broker-dealer up legal and reputational risks.
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