Virginia Administrative Code
Title 21 - SECURITIES AND RETAIL FRANCHISING
Agency 5 - STATE CORPORATION COMMISSION
Chapter 20 - BROKER-DEALERS, BROKER-DEALER AGENTS AND AGENTS OF THE ISSUER
Part IV - Broker-Dealer and Agent Regulations
Section 21VAC5-20-300 - Net worth
Current through Register Vol. 41, No. 3, September 23, 2024
A. For broker-dealers not subject to the Securities Exchange Act of 1934, the term "net worth" as used in § 13.1-505B of the Act shall be computed as total assets minus total liabilities, excluding liabilities of the broker-dealer which are subordinated to the claims of creditors pursuant to a satisfactory subordination agreement as defined in Appendix D of Rule 15c3-1 under the Securities Exchange Act of 1934 ( 17 CFR 240.15c3 - 1d).
B. If a broker-dealer applicant or registrant not subject to the Securities Exchange Act of 1934 cannot demonstrate and maintain a net worth in excess of $25,000, the commission shall require the filing of a surety bond on the form prescribed. The amount of the penal sum of the surety bond can be determined according to the following table:
| NET WORTH (Rounded to nearest $1) | PENALTY AMOUNT OF SURETY BOND |
| Less than $5,000 | $25,000 |
| 5,001-10,000 | 20,000 |
| 10,001-15,000 | 15,000 |
| 15,001-20,000 | 10,000 |
| 20,001-25,000 | 5,000 |
C. If the net worth of a broker-dealer registrant not subject to the Securities Exchange Act of 1934 plus the penal sum of its surety bond drops below $25,000, the registrant must so notify the Division of Securities and Retail Franchising in writing within three business days and immediately take action to establish a net worth in excess of $25,000.
Statutory Authority
§§ 12.1-13 and 13.1-523 of the Code of Virginia.
