ans:

in the case of a customer who purchases a through or from a broker or dealer, except ded in paragraph (2), the time when such r pays the broker or dealer any part of the e price, or, if payment is effected by a bookentry, the time when such bookkeeping made by the broker or dealer for any part urchase price.

In the case of a customer who purchases a through or from a broker or dealer and kes payment therefor prior to the time yment is requested or notification is given yment is due, the time when such broker er delivers the security to or into the acE such customer.

n the case of a customer who sells a secuough or to a broker or dealer, except as d in paragraph (4), if the security is not ustody of the broker or dealer at the time the time when the security is delivered to ker or dealer, and if the security is in the of the broker or dealer at the time of sale. e when the broker or dealer transfers the from the account of such customer. In the case of a customer who sells a securough or to a broker or dealer and who such security to such broker or dealer the time when delivery is requested or tion is given that delivery is due, the time ich broker or dealer makes payment to or account of such customer.

5cl-2. Fraud and Misrepresentation. The term "manipulative, deceptive, or raudulent device or contrivance," as used on 15 (c) (1) of the Act, is hereby defined ide any act, practice, or course of business operates or would operate as a fraud or upon any person.

The term "manipulative, deceptive, or raudulent device or contrivance." as used

in section 15 (c) (1) of the Act, is hereby defined to include any untrue statement of a material fact and any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, which statement or omission is made with knowledge or reasonable grounds to believe that it is untrue or misleading.

(c) The scope of this rule shall not be limited by any specific definitions of the term "manipulative, deceptive, or other fraudulent device or contrivance" contained in other rules adopted pursuant to section 15 (c) (1) of the Act.

Rule 15c1-3. Misrepresentation by Brokers and Dealers as to Registration.

The term "manipulative, deceptive or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include any representation by a broker or dealer that the registration of a broker or dealer, pursuant to section 15 (b), or the failure of the Commission to deny or revoke such registration, indicates in any way that the Commission has passed upon or approved the financial standing, business, or conduct of such registered broker or dealer or the merits of any security or any transaction or transactions therein.

Rule 15c1-4. Confirmation of Transactions.

The term "manipulative, deceptive, or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include any act of any broker or dealer designed to effect with or for the account of a customer any transaction in, or to induce the purchase or sale by such customer of, any security (other than United States Tax Savings Notes, United States Defense Savings Stamps, or United States Defense Savings Bonds, Series E, F and G) unless such broker or dealer, at or before the completion of each such transaction, gives or sends to such customer written notification disclosing (1) whether he is acting as a broker for such customer, as a dealer for his own account, as a broker for some other person, or as a broker for both such customer and some other person; and (2) in any case in which he is acting as a broker for such customer

or for both such customer and some other person, either the name of the person from whom the security was purchased or to whom it was sold for such customer and the date and time when such transaction took place or the fact that such information will be furnished upon the request of such customer, and the source and amount of any commission or other remuneration received or to be received by him in connection with the transaction. Rule 15c1-5. Disclosure of Control.

The term "manipulative, deceptive, or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include any act of any broker or dealer controlled by, controlling, or under common control with, the issuer of any security, designed to effect with or for the account of a customer any transaction in, or to induce the purchase or sale by such customer of, such security unless such broker or dealer, before entering into any contract with or for such customer for the purchase or sale of such security, discloses to such customer the existence of such control, and unless such disclosure, if not made in writing, is supplemented by the giving or sending of written disclosure at or before the completion of the transaction.

Rule 15c1-6. Disclosure of Interest in Distributions.

The term "manipulative, deceptive, or other fraudulent device or contrivance," as used in section 15 (c) (1) of the Act, is hereby defined to include any act of any broker who is acting for a customer or for both such customer and some other person, or of any dealer who receives or has promise of receiving a fee from a customer for advising such customer with respect to securities, designed to effect with or for the account of such customer any transaction in, or to induce the purchase or sale by such customer of, any security in the primary or secondary distribution of which such broker or dealer is participating or is otherwise financially interested unless such broker or dealer at or before the completion of each such transaction, gives or sends to such customer written notification of the existence of such participation or interest.

Rule 15c1-7. Discretionary Accounts.

(a) The term "manipulative, deceptive or other fraudulent device or contrivance," as used in sec

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(b) The term "manipulative, deceptiver defin fraudulent device or contrivance," as uscation tion 15 (c) (1) of the Act, is hereby dor pe include any act of any broker or dealer to effect with or for any customer's acaeco spect to which such broker or dealer or or employee is vested with any discretionary any transaction of purchase or sale unles diately after effecting such transaction sub or dealer makes a record of such transaction record includes the name of such cust name, amount, and price of the security, date and time when such transaction took Rule 15c1-8. Sales at the Market.

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The term "manipulative, deceptive, such fraudulent device or contrivance," as used tion (15) (c) (1) of the Act, is hereby include any representation made to a casacc a broker or dealer who is participating wise financially interested in the primary pled ondary distribution of any security whigg of s admitted to trading on a national secur change that such security is being offered this customer "at the market” or at a price r the market price unless such broker knows or has reasonable grounds to be us a market for such security exists other t made, created, or controlled by him, or b son for whom he is acting or with whom sociated in such distribution, or by controlled by, controlling or under co trol with him.

Rule 15c1-9. Use of Pro Forma Balance

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c2-1. Hypothecation of Customers' Seities.

eneral provisions.-The term "fraudueptive, or manipulative act or practice," n section 15 (c) (2) of the Act, is hereby o include the direct or indirect hypothey a broker or dealer, or his arranging for tting, directly, or indirectly, the continued cation of any securities carried for the of any customer under circumstancesat will permit the commingling of securiied for the account of any such customer urities carried for the account of any stomer, without first obtaining the written of each such customer to such hypotheca

at will permit such securities to be comwith securities carried for the account ›erson other than a bona fide customer of ker or dealer under a lien for a loan made roker or dealer; or

hat will permit securities carried for the of customers to be hypothecated, or subany lien or liens or claim or claims of the or pledgees, for a sum which exceeds the e indebtednes of all customers in respect ties carried for their accounts; except that se shall not be deemed to be violated by f an excess arising on any day through action of the aggregate indebtedness of s on such day, provided that funds or s in an amount sufficient to eliminate such e paid or placed in transfer to pledgee purpose of reducing the sum of the liens s to which securities carried for the accustomers are subject as promptly as le after such reduction occurs, but before - of one-half hour after the commencebanking hours on the next banking day ace where the largest principal amount of such broker or dealer are payable and, ent, before such broker or dealer on such obtained or increased any bank loan cold by securities carried for the account

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efinitions. For the purposes of this

(1) the term "customer" shall not be deemed to include any general or special partner or any director or officer of such broker or dealer, or any participant, as such, in any joint, group or syndicate account with such broker or dealer or with any partner, officer, or director thereof;

(2) the term "securities carried for the account of any customer" shall be deemed to mean:

(i) securities received by or on behalf of such broker or dealer for the account of any customer;

(ii) securities sold and appropriated by such broker or dealer to a customer, except that if such securities were subject to a lien when appropriated to a customer they shall not be deemed to be "securities carried for the account of any customer" pending their release from such lien as promptly as practicable;

(iii) securities sold, but not appropriated, by such broker or dealer to a customer who has made any payment therefor, to the extent that such broker or dealer owns and has received delivery of securities of like kind, except that if such securities were subject to a lien when such payment was made they shall not be deemed to be "securities carried for the account of any customer" pending their release from such lien as promptly as practicable;

(3) "aggregate indebtedness" shall not be deemed to be reduced by reason of uncollected items. In computing aggregate indebtedness, related guaranteed and guarantor accounts shall be treated as a single account and considered on a consolidated basis, and balances in accounts carrying both long and short positions shall be adjusted by treating the market value of the securities required to cover such short positions as though such market value were a debit; and

(4) in computing the sum of the liens or claims to which securities carried for the account of customers of a broker or dealer are subject, any rehypothecation of such securities by another broker or dealer who is subject to this rule or to Rule 8c-1 shall be disregarded.

(c) Exemption for cash accounts.-The provisions of paragraph (a) (1) hereof shall not apply to any hypothecation of securities carried for the account of a customer in a special cash account within the meaning of section 4 (c) of Regulation T of the Board of Governors of the Federal Reserve System, provided that at or be

fore the completion of the transaction of purchase of such securities for, or of sale of such securities to, such customer, written notice is given or sent to such customer disclosing that such securities are or may be hypothecated under circumstances which will permit the commingling thereof with securities carried for the account of other customers. The term "the completion of the transaction" shall have the meaning given to such term by Rule 15c1-1 (b).

(d) Exemption for clearing liens.-The provisions of paragraphs (a) (2), (a) (3), and (ƒ) hereof shall not apply to any lien or claim of the clearing corporation, or similar department or association, of a national securities exchange, for a loan made and to be repaid on the same calendar day, which is incidental to the clearing of transactions in securities or loans through such corporation, department or association: Provided, however, That for the purpose of paragraph (a) (3) hereof, "aggregate indebtedness of all customers in respect of securities carried for their accounts" shall not include indebtedness in respect of any securities subject to any lien or claim exempted by this paragraph.

(e) Exemption for certain liens on securities of noncustomers.-The provisions of paragraph (a) (2) hereof shall not be deemed to prevent such broker or dealer from permitting securities not carried for the account of a customer to be subjected (i) to a lien for a loan made against securities carried for the account of customers, or (ii) to a lien for a loan made and to be repaid on the same calendar day. For the purpose of this exemption, a loan shall be deemed to be "made against securities carried for the account of customers" if only securities carried for the account of customers are used to obtain or to increase such loan or as substitutes for other securities carried for the account of customers.

(f) Notice and certification requirements.No person subject to this rule shall hypothecate any security carried for the account of a customer unless, at or prior to the time of each such hypothecation, he gives written notice to the pledgee that the security pledged is carried for the account of a customer and that such hypothecation does not contravene any provision of this rule, except that in the case of an omnibus account the broker

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or dealer for whom such account is car Rule furnish a signed statement to the person such account that all securities carried th such broker or dealer will be securities and the account of his customers and that the cation thereof by such broker or dealer contravene any provision of this rule. T visions of this clause shall not apply pothecation of securities under any le of a pledgee securing a loan made and to on the same calendar day.

Rule 15c2-2. Prohibition of Trading Suspension of Trading on a Natin curities Exchange.

The term "fraudulent, deceptive, or tive act or practice," as used in section of the Act, is hereby defined to include any broker or dealer designed to effect the account of a customer any transaction induce the purchase or sale by such cas any security during the period between [1 lic announcement by the Commission th suspended trading in such security on a securities exchange pursuant to section 1} of the Act in order to prevent fraudule tive, or manipulative acts or practices and expiration or lifting of such suspension.

Rule 15c2-3. Prohibiting Trading in
Securities Unless Validated.

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The term "fraudulent, deceptive, or tive act or practice," as used in section 13 of the Act, is hereby defined to include any broker or dealer designed to effect action in, or to induce or attempt to incr purchase or sale of, any security requir validated under any applicable validation the Federal Republic of Germany unless security has been duly validated, and it such security is a dollar bond, there is st document of the Validation Board for t Dollar Bonds certifying to the validatic security, or (2) if such security is an inte pon detached from an unvalidated dolla document of the Validation Board for Dollar Bonds certifying to the validatis coupon is delivered with such coupon.

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c3-1. Ratio of Aggregate Indebtedness Net Capital.

eneral provision.-No broker or dealer rmit his aggregate indebtedness to all other to exceed 2,000 per centum of his net

Exemptions. The provisions of this rule t apply to

ny broker (A) whose securities business is to acting as agent for the issuer in solicitscriptions for securities of such issuer, (B) omptly transmits to the issuer all funds, omptly delivers to the subscriber all securieived in connection therewith, and (C) who t otherwise hold funds or securities for or oney or securities to customers.

any member of the American Stock ExBoston Stock Exchange, Midwest Stock ge, New York Stock Exchange, Pacific Stock Exchange, Philadelphia-Baltimore Exchange, Pittsburgh Stock Exchange, or ake Stock Exchange, all of whose rules and practices are deemed by the Commission to requirements more comprehensive than the ments of this rule: Provided, That the exon as to the members of any exchange may pended or withdrawn by the Commission at me, by sending at least ten (10) days' writtice to such exchange, if it appears to the ission necessary or appropriate in the puberest or for the protection of investors so

Definitions. For the purpose of this rule: The term "aggregate indebtedness" shall med to mean the total money liabilities of a r or dealer arising in connection with any action whatsoever, including, among other 3: money borrowed; money payable against ties loaned and securities "failed to receive"; arket value of securities borrowed (except elivery against customers' sales) to the extent ich no equivalent value is paid or credited; mers' free credit balances; credit balances stomers' accounts having short positions in ities; and equities in customers' commodities es accounts; but excluding

) indebtedness adequately collateralized, as nafter defined, by securities or spot commodowned by the broker or dealer;

(B) indebtedness to other brokers or dealers adequately collateralized, as hereinafter defined, by securities or spot commodities owned by the broker or dealer;

(C) amounts payable against securities loaned which securities are owned by the broker or dealer;

(D) amounts payable against securities failed to receive which securities were purchased for the account of, and have not been sold by, the broker or dealer;

(E) indebtedness adequately collateralized, as hereinafter defined, by exempted securities;

(F) amounts segregated in accordance with the Commodity Exchange Act and the rules and regulations thereunder;

(G) fixed liabilities adequately secured by real estate or any other asset which is not included in the computation of "net capital" under this rule;

(H) liabilities on open contractual commitments;

(I) indebtedness subordinated to the claims of general creditors pursuant to a satisfactory subordination agreement, as hereinafter defined;

(2) The term "net capital" shall be deemed to mean the net worth of a broker or dealer (that is, the excess of total assets over total liabilities), adjusted by

(A) adding unrealized profits (or deducting unrealized losses) in the accounts of the broker or dealer and, if such broker or dealer is a partnership, adding equities (or deducting deficits) in accounts of partners, as hereinafter defined;

(B) deducting fixed assets and assets which cannot be readily converted into cash (less any indebtedness secured thereby) including, among other things, real estate; furniture and fixtures; exchange memberships; prepaid rent, insurance and expenses; good will; organization expenses; all unsecured advances and loans; customers' unsecured notes and accounts; and deficits in customers' accounts, except in bona fide cash accounts within the meaning of section 4 (c) of Regulation T of the Board of Governors of the Federal Reserve System;

(C) deducting the percentages specified below of the market value of all securities, long and short (except exempted securities) in the capital, proprietary and other accounts of the broker or