Net liquidating equity
"As an execution on a National Securities Exchange FINRA requires Clearing Firms to report prescribed data to FINRA that is used for surveillance purposes.
The codes are used to distinguish between the exchange and the non-exchange set of variables.
National Securities Exchange includes NYSE, ASE, PHLX, CBOE, Chicago Stock Exchange, Cincinnati Stock Exchange, Boston Stock Exchange, and Pacific Stock Exchange.
If a correspondent routes an order to another broker-dealer, and that broker-dealer routes the order to an exchange for execution, is that execution considered as "executed on a National Securities Exchange" or as a "Non-Exchange Listed Equity Transaction?
This allowed the FCM to believe that it was in regulatory compliance, with hundreds of millions of dollars to spare, even when the amount in segregation was actually in or perilously close to being in deficit. futures contracts, then ask your FCM to represent that it will determine its customer segregation obligations under CFTC Rule 30.7 on the basis of the "net liquidating equity method," rather than the "alternative method".
Specifically, the rules allow a FCM to calculate the "secured" amount according to one of two methods: In the case of MF Global, reliance on the Alternative Method in the time period leading up to the liquidation resulted in substantially fewer funds being segregated than under the Net Liquidating Equity Method.