Clearing & Execution Services
Sterne Agee Clearing, Inc. ("SALC") offers clearing services on an omnibus or fully disclosed basis to qualified Broker-Dealers. You may either use the services of SA for execution of trades or "trade away" with approval from SALC. In "trade away" situations, you are responsible for being a subscriber to the TRF system of FINRA and report under SEC 11ac 1-6 as well as OATS and any other required trade reporting. SALCworks closely with a number of consultant service firms offering turnkey Broker-Dealer registration processes.
After you become a correspondent of SALI, we offer an orientation program at our operations center in Birmingham, Alabama. This experience gives our correspondents valuable "face-to-face" meeting time with all operations and product desk personnel.
Schedule A to our clearing agreement document contains the interest income sharing split between SALC and the introducing Broker-Dealer. SALC also shares with the Broker-Dealer 12b-1 trails on all average balances held by correspondent Broker-Dealer clients in any of our cash account sweep options.
Low Execution and Clearing Costs
SALC bases its clearing costs on an unbundled basis. All costs are contained on Schedule A of our clearing agreement document which is available upon request.
SA has a minimum deposit requirement of $25,000 for Broker-Dealers that clear on a fully disclosed basis and have SALC execute all client trades. If a correspondent is a market maker, municipal underwriter, or deals extensively in options, higher deposits are required.
With SEC capital requirements, any Broker-Dealer who receives securities or monies from its clients for further delivery to its clearing firm is required to have at least $50,000 in regulatory net capital or higher. SALC requires that correspondents be in net capital compliance at all times. Those Broker-Dealers desiring to "trade away" issue drafts from their branch offices, or who are market makers have a Regulatory net capital requirement of $100,000. SALC also requires that under the later circumstance, correspondents must carry a $250,000 Brokers Blanket Bond (Fidelity Bond). Broker Dealers who direct all trades to Sterne Agee for execution need only to comply with the minimum Regulatory Net Capital of $5,000.
Correspondent Broker-Dealers are sent a statement of their firms clearing costs each month. The statement and attendant commission reports in electronic and paper format are prepared and completed within 10 business days following the last settlement date of each production month. This prompt preparation and delivery of clearing cost and payment of net commissions allows sufficient time for our correspondents to prepare monthly FOCUS reports.
SALC provides each correspondent with the necessary client account forms and reports via the Internet. Each correspondent is responsible for printing and supplying all order tickets and related documents.
The first step is to complete the Prospective Correspondent Profile and the CRD Access Authorization form. Contact 800.264.4863for "getting started" and other materials.
If you are currently clearing somewhere else, we can accomplish a "Tape to Tape" or an "ACAT" transfer, whichever is most appropriate.
SALC will prepare "vanity" confirms and monthly statements displaying their logo and any disclosures deemed necessary by the correspondent.