Exchange Act § 8 
Restrictions on Borrowing and Lending by
Members, Brokers, and Dealers
It shall be unlawful for any registered broker or dealer, member of
a national securities exchange, or broker or dealer who transacts a business
in securities through the medium of any member of a national securities
exchange, directly or indirectly --
a. In
contravention of such rules and regulations as the Commission shall prescribe
for the protection of investors to hypothecate or arrange for the hypothecation
of any securities carried for the account of any customer under circumstances
(1) that will permit the commingling of his securities without his written
consent with the securities of any other customer, (2) that will permit
such securities to be commingled with the securities of any person other
than a bona fide customer, or (3) that will permit such securities to
be hypothecated, or subjected to any lien or claim of the pledgee, for
a sum in excess of the aggregate indebtedness of such customers in respect
of such securities.
b. To
lend or arrange for the lending of any securities carried for the account
of any customer without the written consent of such customer or in contravention
of such rules and regulations as the Commission shall prescribe for the
protection of investors.
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June 6, 1934, c. 404, Title I, § 8, 48 Stat.
888
Aug. 23, 1935, c. 614, § 203(a), 49 Stat. 704
June 4, 1975, Pub.L. 94-29, § 5, 89 Stat. 109
Oct. 3, 1984, Pub.L. 98-440, Title I, § 103, 98 Stat. 1690
Sept. 23, 1994, Pub.L. 103-325, Title II, § 204, 108 Stat. 2199
Oct. 11, 1996, Pub.L. 104- 290, Title I, § 104(b), 110 Stat. 3423 |
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