Net Capital requirements for broker/dealers.

Discussion in 'Prop Firms' started by Snosur4, May 7, 2002.

  1. Snosur4


    According to my research, the minimum net capital required by SEC rule 15c-1 is 1.1 million.

    As far as I can determine, falling below that level in all the accumulated capital/trading accounts of a prop firm, is the only restriction to withdrawing funds.

    Also funds could theoretically be held forever, profits or original contribution, if the total minimum net was maintained.

    Can someone confirm or correct this info.

  2. How could there be a trading firm with only a million dollars in it? This would be insane (business wise) to even consider...

    I'm not sure where you're going with this, but I don't think any trading firm exists with that little of money (perhpas "sub llc's or franchises, or "introducing brokers").

    Anyway, give us some details about your inquiry, and I'll be glad to help if I can.

  3. Snosur4

    Snosur4 goes. The minimum net requirement should be of concern to "class B" members of a prop firm since falling below that level would prevent them from withdrawing any funds from thier capital accounts whether or not it was gains or just thier original contribution.

    There has been some discussion on these boards about how well
    capitalized the various firms are. This is directly related to that subject. Not taking sides with anyone, if the above information is correct, then the amount of reserves above the minimum net required should be of significant concern to prospective "class b"

    Of equal concern, in my opinion, is the amount of capital contributed and maintained by the "class A' members.

    All comments and/or explanations are welcomed.
  4. You just openned up the door for some more Bright self promotion. Mr. Bright do us all a favor and save your breath. I am tired of hearing the same old stuff.

    Make sure you check the firms financials, blah blah blah...
    At Bright we have 10 million dollars in owner capital - actually more, blah, blah, blah........
    Bright is the best, come trade with us, blah, blah, blah.....

    There i wrote it for you so now you can spare us.
  5. Don is a sponsor of this board. I, for one, happen to value his opinions. If you don't like what he has to say, either put him on ignore, or, stop visiting the site.

    Just my two cents.
  6. Hitman?
  7. GHJ


    We have a private JBO BD with 1.25 mil in cap (we don't compete with Bright so save the Bright commercial :) ). Our risk is very controlled and we never have to worry about a spread blowing up in our faces, a big pair trade going awry on multiple traders simultaneously, or a trader riding a stock down 20 points for a $1 million loss while no one is watching the risk monitors.

    There is nothing whatsoever "insane" about this level of capitalization...IF the firm's risk controls are suitable. Moreover, with 20-1 intraday margin it is more than enough money to execute 95% of the trading strategies out there. We'll leave the other high risk 5% to you.
  8. Snosur4



    Thanks for the reply.

    From what you state above, my research must be correct.
    I agree, that 1.25 mil would be sufficient for a small private group of traders with risk parameters easily controled, but I would be concerned about that amount be enough with multiple traders...

    Frankly, I'm surprised that this thread has not elicited more comments. I would like to hear from those who are members of an LLC trading group and how they reconciled themselves to the concerns I expressed in my second post.

  9. Thank You!!

  10. :D
    #10     May 8, 2002