Good Faith Violation (“GFV”)
Regal Securities through its clearing agent Penson Financial Services, Inc. is required to implement a new policy concerning unsettled funds. Effective immediately, your account will be charged with a Good Faith Violation if you purchase a security in a cash account and sell that security to purchase another using unsettled funds. Three (3) GFVs in any twelve (12) month rolling period will result in your account being restricted to “Funds in Advance” of trading for a period of 90 days. If an account trades through a 90-day restriction, any resulting loss in the account will be the responsibility of the client and your account may be coded for "no more business."
Example:
- On Monday customer sells “A” for $5,000, of a long, settled and fully paid for position.
- On Monday customer buys “B” for $5,000
- On Monday, Tuesday or Wednesday customer sells “B”, the sale is allowed but funds would not be available until the settlement of selling “B”.
- Repurchase prior to settlement of the sell will result in a Call.
- On Monday customer buys “A” for $5,000 with only $5000 in the money fund.
- On Monday, Tuesday or Wednesday customer sells “A”, the sale is allowed, but funds would not be available until the settlement of selling “A”.
- Repurchase prior to settlement of the sell will result in a Call.
* If the Calls are not met, the account would be charged with a Good Faith Violation.
For questions contact Regal at 1-800-92-REGAL (73425).