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"As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuat
by miguelrochefort 6y ago
"As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment."
Can anyone translate that?
It seems to be referring to:
* https://en.wikipedia.org/wiki/Net_capital_rule https://en.wikipedia.org/wiki/Net_capital_rule
* https://en.wikipedia.org/wiki/Automated_clearing_house https://en.wikipedia.org/wiki/Automated_clearing_house
- totalZero 6y ago> SEC net capital obligations They have to meet certain governmental guidelines on deposits vs asset price risk. > clearinghouse deposits Clearing members have to deposit money into clearinghouses as insurance in case a firm goes under.
- miguelrochefort 6y agoI can understand how risk management might be necessary for margin trading, but is it really necessary for non-margin trading? And if it's a scaling issue, shouldn't all stocks be equally affected, rather than cherry-picking just a few?
- zug_zug 6y agoYeah, as a completely disinterested party, I'm entirely unclear as to what legal obligations a middleman like robinhood could be under to prevent them from allowing parties to buy/sell stock on their platform. I think they owe a much greater burden of transparency if they want to convince the neutral, educated who don't have a personal stake in the issue that they didn't manipulate the market (illegally?).