California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 2 - Corporate Securities
Article 9 - Regulation of Broker-Dealers and Agents
Section 260.216.14 - Use of Customer Free-Credit Balance

No broker-dealer shall use any funds arising out of any free credit balance carried for the account of any customer in connection with the operation of the business of such broker-dealer unless such broker-dealer has established adequate procedures pursuant to which each customer for whom a free credit balance is carried will be given or sent, together with or as a part of the customer's statement of account, whenever sent but not less frequently than once every three months, a written statement informing such customer of the amount due to the customer by such broker-dealer on the date of such statement, and containing a written notice that (a) such funds are not segregated and may be used in the operation of the business of such broker-dealer; and (b) such funds are payable on the demand of the customer. For the purpose of this section, the term "customer" shall mean every person other than a broker-dealer.

1. Editorial correction adding NOTE filed 4-6-83 (Register 83, No. 15).

Note: Authority cited: Sections 25216 and 25610, Corporations Code. Reference: Section 25216, Corporations Code.