net capital rule

net capital rule definition - finance
A Securities and Exchange Commission rule that requires all broker/dealers to maintain no more than a 15-to-1 ratio between indebtedness and liquid assets. Examples of indebtedness includes money owed by the firm, margin loans, and commitments to purchase securities. Liquid assets consist of cash and other assets that are easily converted into cash.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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