DTCC/NSCC are demanding up to 10x the capital from small and med size broker dealers/members.

Excerpts from one of the proposed rules filed tonight. NSCC-2021-16

"U.S. Broker-Dealers NSCC proposes increasing minimum excess net capital (“Excess Net Capital”) requirements for Members that are U.S. broker-dealers using a tiered approach.16 These increases would be between 2 and 10 times the current minimum Excess Net Capital requirements"

One of the small brokers crying in comments:

"The proposal also make no sense: Why would a firm that has a margin requirement (VaR Tier) of $500,000 need $10 million in excess net capital. DTCC’s margin is supposed to account for the risk, so why does a firm that according to DTCC could lose $500,000 need $10 million in excess net capital? The proposal makes even less sense when one considers that a firm with a $1 billion Var would also have a $10 million minimum capital requirement.

The proposed Var tiers are extremely low and designed to target DTCC’s smallest participants. It ignores the mega size participants that pose real risk for DTCC and instead discriminates against smaller firms that over the years have not shown to create much exposure for DTCC.

It is simply ridiculous that a firm $500,000 at risk needs $10 million in EXCESS capital, i.e. twenty times the amount at risk, when a firm with $1 billion at risk also needs $10 million, i.e. 1% of the amount at risk. The small firm needs 2,000 times more capital than the mega firm. "

It appears as if the clearing house is worried about smaller brokers getting nuked.

Timeline:

" Implementation Timeframe Pending Commission approval, NSCC would implement the proposed changes to enhance its capital requirements for members one year after the Commission’s approval of this proposed rule change. During that one-year period, NSCC would periodically provide Members with estimates of their capital requirements, based on the approved changes, with more outreach expected for Members impacted by the changes. NSCC would inform a Member that is a U.S. broker-dealer (“BD Member”) if it exceeded its then-current VaR Tier, which may lead to the BD Member moving into a higher VaR Tier and, thus, being subject to a higher capital requirement. Same as the proposed, ongoing practice post-implementation, NSCC would provide the Member with a grace period of 60 days from the date of implementation to comply with the higher requirement."

NSCC-2021-16

S

There have been posts about this new proposed filing ( https://www.dtcc.com/-/media/Files/Downloads/legal/rule-filings/2021/NSCC/SR-NSCC-2021-016.pdf ) being for the MOASS but I don't think it is for several reasons. The first is because on page 5 of the filing it states this is an updated version of a proposal for 2013 that was never passed because the members pushed back so this rule has been in the works for a while.

https://preview.redd.it/5p8olgvk0x781.png?width=1004&format=png&auto=webp&s=f0d696bebf7ecab4bdfe5711fb9d68a4fc7052ec

Second on page 23 and 24 it states that once it's approved this rule will not go into effect for 1 year.

https://preview.redd.it/x9ykub111x781.png?width=983&format=png&auto=webp&s=9ae0e4de966ab0e721a20a399aaea4aa2d84417a

With Evergrande, Interest rate hikes, and DOJ Investigation I don't see the MOASS being delayed to 2023 for the implementation of these new capital requirements. I believe it is for after the MOASS after most of the bad actors have been removed or bankrupted. They will then use the rest of 2022 to get the remaining firms prepared for the new capital requirements to be in the market in 2023. This is to minimize the risk of anyone else over leveraging themselves and risking the market again by doing the bullshit we have seen Shitadel and brokers like Robinhood do.

I think NSCC-2021-010 is the main rule we are waiting on as that is designed to minimize the effect that members going bankrupt during MOASS will have on the entire market. The SFT Clearing Agency is designed to transfer the assets of one member to the NSCC as collateral for other members loaning out cash. This way instead of selling those shares into the market for cash for the inevitable margin calls and crashing everything they can just be transferred. I believe this week is the earliest we can hear a decision on if it's approved or denied. STAY STRONG APES AND HAVE A HAPPY NEW YEARS! UNITED WE GET RICH, DIVIDED WE FALL!

Stocks that remain heavily shorted, such as $GME , $AMC , $DWACW will likely face buy pressure from here. DWACW began squeezing at the end of the day because of this. $AMC and $GME are up significantly after hours.

NSCC is elevating capital requirements on egregious short-borrow positions due to value-at-risk and falling asset values across the board in long positions. Hedgies won't be able to sustain those borrows when value-at-risk is going awack in the middle of a market panic. $GME, $AMC, $DWACW looking good here.

Since acquiring a capital ship, the biggest question I've asked myself is "how possible is it to profit from a capital ship

And in my search what I've found is that we know basically nothing about, but it seems to be a pretty heavily debated topic so I'm really curious to hear what you guys think about it.

In the poll I say "solo" as in: Ran alone or with a very small amount of people, and NPC/Blades filling in the rest of the roles. And being "able" to run it solo implies you are able to get things done, not only fly it into space, it's being able to actually carry on the purpose of the ship

View Poll

So what can a muslim do?

Also there was a sahih hadith that the prophet pbuh said there will come a time when no one can stay a away from riba and those who try will still be affected by the dust riba leaves behind.

So if were living in such a time are we still liable for participating in the system?

*I'm a dude, He's a dude, She's a dude, We're all dudes HEY!*

Oh! Welcome to Good Burger home of The Good Burger can i take ya orrder? Dude. We gotta talk about this stress test! Remember, back in March before the Quad Witching :( R.I.P. that it was a pretty big deal and we had hoped it was gonna light the boosters? Well, I know i forgot about it until reading about the new required $1 TRILLION Net Capital Requirement for all DFAST firms. Lets kick it together for a bit and lemme talk to ya. Its....well something.

TLDR: Fed tells 23 Banks "No Bailout. Eff you, brew coffee at home."

*Note: There were 2 specific types of tests. One being Baseline and the other being Severely Adverse. For the sake of our beloved GME and her -Beta....this is the big owie.

So!! Im gonna hop out the Strawberry Milkshake Jacuzzi and break this down real quick.

https://preview.redd.it/pl7plqyceqf71.png?width=2346&format=png&auto=webp&s=0baccb0e78992038910a29661d9d69650b96f222

^(Also remember i have NO FUCKING CLUE wtf im talking about! So this whole thing should be added upon and dissected and if its not up to par...well you can type so you do it next time <3)

^(-----------------------------------------------------------------------------------------------------------------------------------------------------)

Stress Test.

Think of it as a Madden 21 Season Sim...they Sim an EXTREME market event and base it over 9 quarters. (Thats 2 years and 3 months, I can smell the smoke from your ears from here. Dont hurt yourself <3)

So i copied this directly from The Fed: https://www.federalreserve.gov/publications/2021-june-dodd-frank-act-stress-test-supervisory-scenarios.htm

>These scenarios were developed using the approach described in the Board's Policy Statement on the Scenario Design Framework for Stress Testing.10 The severely adverse scenario is not a forecast but rather a hypothetical scenario designed to assess the strength of banking organizations and their resilience to an unfavorable economic environment.
>
>The DFAST 2021 supervisory scenarios include trajectories for 28 variables. These include 16 variables that capture economic activity, asset prices, and interest rates in the U.S. economy and financial

SEC sauce

Goldman Net Capital deduction, Jefferies deductions, Citigroup, and more

Right on time, more exceptions for potential bag holders. (credit to u/Smokdizzy)

Anyone who's been around has seen the theories (credit to u/laflammaster) of SBS involvement in the GME saga so far. Though I'm sure it's not all about GME or meme stocks, I can't imagine a lot of it isn't, given what we know about the price cycles. November 5th is gonna be coming in fast and hot.

Theory:

These deductions are being handed out to institutions who are in serious danger of default, either from being victimized by bad market players or from being bad market players themselves but too critical as market participants to let fail.

Assuming failed margin calls do occur in early November, these institutions will be given leniency while the DTCC and other, less crucial or guilty participants will be obligated to pick up the bill from some really, really bad basket swaps which include a certain thriving game retailer/technology company.

MOASS, here we come.

GEICO had a definite competitive advantage. They marketed directly to consumers and did not hire insurance agents. The company also did not inherently require much capital.

Which company is the next GEICO? An insurance or non-insurance business that has a competitive advantage and does not require significant capital.

The kicker: the company needs a P/E ratio of less than 10 (Warren Buffett bought GEICO consistently under a p/e of 10, which is amazing since it was technically a growth company)

I'm still digesting the report and I'm dumb but I must be missing something.

If you take what part of the report says it appears to be saying that if we just have a legitimately active market that the system can't handle it...and then just describes why that is the case as if such a thing shouldn't be cause for massive concern and restructuring.

Doesn't the DTCC clear something like $8 TRILLION per DAY? If so then how could legit buying and selling be a concern? Even with a huge volume surge wouldn't he meme stocks have still been only a tiny drop in the bucket?

And if it was a broker-dealer and MM risk issue how does that happen with legit trading? Isn't that the whole damn purpose of having a chain of those willing to take and back your trades as insurance and create a market?

And if it was all legit trading and you got upside down on your risk profiles wouldn't people be willing to short term loan you the money in a split second? The idea that wall street can't handle too much money being thrown at it is simply hilarious.

"Well see there were too many people trading....even though that is exactly what we want as that is our business." Huh?

If everything was legit and you suddenly got a MASSIVE spike in business then other institutional whales should have been throwing money at you if you needed it.

It seems as if the report says: "It was mainly a retail buying surge and you see Wallstreet isn't designed to handle a lot of money."

Am I missing something?

Either no crime happened and our system is totally fucking retarded as apparently it can't handle legitimate trading even though that's its whole fucking purpose or MAYBE, just maybe there was some fucked up shit happening.

Source

>Following its stress test earlier this year, the Federal Reserve Board on Thursday announced the individual capital requirements for all large banks, effective on October 1. Those capital requirements ensure that the large banks tested will hold roughly $1 trillion in high-quality capital—enough to survive a severe recession and still be able to lend to households and businesses.
>
>Large bank capital requirements are in part determined by the Board's stress test results, which provide a risk-sensitive and forward-looking assessment of capital needs. The below table shows the total common equity tier 1, or CET1, capital requirements for each bank, which is made up of several components, including:
>
>Minimum capital requirement, which is the same for each firm and is 4.5 percent;
>
>The stress capital buffer, or SCB, requirement, which is determined from the stress test results, and is at least 2.5 percent; and
>
>If applicable, a capital surcharge for global systemically important banks, or G-SIBs, which is at least 1.0 percent.
>
>The Board also affirmed the stress test results for one bank that requested reconsideration, HSBC North America Holdings Inc. The reconsideration process involved an independent group—separate from the stress testing group—that analyzed and evaluated the results. While affirming HSBC's stress test results for this cycle, the Board also directed the staff to conduct a closer examination of issues raised in the reconsideration process to inform continuing improvements in its stress testing methodology for next year's stress tests.

Large Bank Capital Requirements - August 2021

Under the Federal Reserve Board’s capital framework for bank holding companies and U.S. intermediate holding companies with $100 billion or more in total consolidated assets, capital requirements are in part determined by the supervisory stress test results. Table 1 shows the total common equity tier 1 (CET1) capital requirement for each large bank, which is made up of several components, including

• a minimum CET1 capital requirement of 4.5 percent, which is the same for each bank;
• the stress capital buffer (SCB) requirement, which is determined from the supervisory stress test results and is at least 2.5 percent;1 and

Hey there apes, smoothbrain and window licker here. I wanted a better idea of what's going on with the banks on the 1st of October. Yet, I couldn't find much solid info on it aside from a couple posts with phone-screenshots of the announcement last month. So I decided to do some extra digging, even though I should be going to bed, but hey, it's not like I'll be doing much work at work tomorrow to be effected by lack of sleep anyways, am I right? https://www.reddit.com/r/Superstonk/comments/oys65f/effective_october_1st_big_banks_required_to_have/?utm_source=share&utm_medium=web2x&context=3

First point of interest. That word, trillion*.*

https://preview.redd.it/gj9mp5qfujq71.png?width=646&format=png&auto=webp&s=0fac1e6369f21a3aa5bf3694914bc03cdb9538bb

As far as I understand, the added requirement on top of older requirements for these tests (4.5+2.5% respectively) is that within their combined assets, they contain at least $1 Trillion is high-quality capital. I'm assuming this would include T-bonds and cash.

And what's juicy is that run-on sentence after the announced required increase in capital. "-enough to survive a severe recession and still be able to lend to households and businesses." YIKES.

Now this is where my buddy asked me, "well how many banks is that, like 5?"..... I guessed 10.

I looked up the number of banks that would be included in this required increase of high-quality capital. They include BHCs (Bank Holding Companies) and IHCs (Intermediate Holding Companies) and their respective branches. The prerequisite for this test is for banks with at least $100 Billion in consolidated assets or more.

Here is the top 4 banks and their total assets (*in 1000s). https://www.mx.com/moneysummit/biggest-banks-by-asset-size-united-states/

https://preview.redd.it/gmd8ehflwjq71.png?width=790&format=png&auto=webp&s=0ca29a4219c409fd24543944c419da6b6007165c

https://preview.redd.it/mup3e05qwjq71.png?width=789&format=png&auto=webp&s=a96e8931b3a8a6a5835447cfc4af650fa33d6f4b

Now here is the full number of banks that will be effected by this increase in high-quality capital:

https://preview.redd.it/dcvx7f41xjq71.png?width=590&format=png&auto

(TSXV: ODD) (OTCQB: ODDAF) (FSE: IA9)

Odd Burger just announced loans of up to 90 per cent of the cost of opening a new location are available for eligible franchisees through the Canada Small Business Financing Program offered by CIBC.

Franchises are vital for Odd Burger, one of the first public, vegan fast food chains, to expand throughout North America. Reducing the necessary capital requirements to open a franchise should really accelerate their growth.
Odd Burger currently has 6 locations with 4 more in development, with a goal of having 20 locations operational by this time next year. They produce their own proprietary plant-based product line at their own food manufacturing facility, letting them control the supply chain and keep prices low.

Source: https://ca.finance.yahoo.com/news/odd-burger-offers-franchisees-90-123000764.html

Not financial advice.

DTCC/NSCC are demanding up to 10x the capital from small and med size broker dealers/members.

Excerpts from one of the proposed rules filed tonight. NSCC-2021-16

"U.S. Broker-Dealers NSCC proposes increasing minimum excess net capital (“Excess Net Capital”) requirements for Members that are U.S. broker-dealers using a tiered approach.16 These increases would be between 2 and 10 times the current minimum Excess Net Capital requirements"

One of the small brokers crying in comments:

"The proposal also make no sense: Why would a firm that has a margin requirement (VaR Tier) of $500,000 need $10 million in excess net capital. DTCC’s margin is supposed to account for the risk, so why does a firm that according to DTCC could lose $500,000 need $10 million in excess net capital? The proposal makes even less sense when one considers that a firm with a $1 billion Var would also have a $10 million minimum capital requirement.

The proposed Var tiers are extremely low and designed to target DTCC’s smallest participants. It ignores the mega size participants that pose real risk for DTCC and instead discriminates against smaller firms that over the years have not shown to create much exposure for DTCC.

It is simply ridiculous that a firm $500,000 at risk needs $10 million in EXCESS capital, i.e. twenty times the amount at risk, when a firm with $1 billion at risk also needs $10 million, i.e. 1% of the amount at risk. The small firm needs 2,000 times more capital than the mega firm. "

It appears as if the clearing house is worried about smaller brokers getting nuked.

Timeline:

" Implementation Timeframe Pending Commission approval, NSCC would implement the proposed changes to enhance its capital requirements for members one year after the Commission’s approval of this proposed rule change. During that one-year period, NSCC would periodically provide Members with estimates of their capital requirements, based on the approved changes, with more outreach expected for Members impacted by the changes. NSCC would inform a Member that is a U.S. broker-dealer (“BD Member”) if it exceeded its then-current VaR Tier, which may lead to the BD Member moving into a higher VaR Tier and, thus, being subject to a higher capital requirement. Same as the proposed, ongoing practice post-implementation, NSCC would provide the Member with a grace period of 60 days from the date of implementation to comply with the higher requirement."

NSCC-2021-16

Source - https://www.dtcc.com/legal

Stocks that remain heavily shorted, such as $GME , $AMC , $DWACW will likely face buy pressure from here. DWACW began squeezing at the end of the day because of this. $AMC and $GME are up significantly after hours.

NSCC is elevating capital requirements on egregious short-borrow positions due to value-at-risk and falling asset values across the board in long positions. Hedgies won't be able to sustain those borrows when value-at-risk is going awack in the middle of a market panic. $GME, $AMC, $DWACW looking good here.

SEC sauce

Goldman Net Capital deduction, Jefferies deductions, Citigroup, and more

Right on time, more exceptions for potential bag holders.

Anyone who's been around has seen the theories of SBS involvement in the GME saga so far. Though I'm sure it's not all about GME or meme stocks, I can't imagine a lot of it isn't, given what we know about the price cycles. November 5th is gonna be coming in fast and hot.

Theory:

These deductions are being handed out to institutions who are in serious danger of default, either from being victimized by bad market players or from being bad market players themselves but too critical as market participants to let fail.

Assuming failed margin calls do occur in early November, these institutions will be given leniency while the DTCC and other, less crucial or guilty participants will be obligated to pick up the bill from some really, really bad basket swaps which include a certain thriving game retailer/technology company.

MOASS, here we come.

SEC sauce

Goldman Net Capital deduction, Jefferies deductions, Citigroup, and more

Right on time, more exceptions for potential bag holders.

Anyone who's been around has seen the theories of SBS involvement in the GME saga so far. Though I'm sure it's not all about GME or meme stocks, I can't imagine a lot of it isn't, given what we know about the price cycles. November 5th is gonna be coming in fast and hot.

Theory:

These deductions are being handed out to institutions who are in serious danger of default, either from being victimized by bad market players or from being bad market players themselves but too critical as market participants to let fail.

Assuming failed margin calls do occur in early November, these institutions will be given leniency while the DTCC and other, less crucial or guilty participants will be obligated to pick up the bill from some really, really bad basket swaps which include a certain thriving game retailer/technology company.

MOASS, here we come.