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Regulations

  • Syfe Australia is a Corporate Authorised Representative of Sanlam Private Wealth Pty Ltd., an Australian Financial Services Licensee. Alpaca Securities LLC, a member of the Securities Investor Protection Corporation (SIPC), currently serves as the sub-custodian for your US securities account. In the event that a SIPC-member fails and is placed in liquidation under the Securities Investor Protection Act, SIPC protects the securities customers of its members up to USD 500,000 (including USD 250,000 for claims for cash). SIPC does not protect against any decline in the value of your securities. For details, please see www.sipc.org.

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    Pattern Day Trading' (PDT) rule states that the customer should not execute four or more "day trades" within a rolling 5 day period. By default, the fourth pattern day trade will be blocked to avoid PDT violation by default. A day trade is considered the opening and closing of the same position within the same day.

    FINRA rules define a “pattern day trader” as any customer who executes four or more “day trades” within five business days, provided that the number of day trades represents more than six per cent of the customer’s total trades in the account for that same five business day period.

    Day Trade count includes pending orders that you have placed. For example, if you’ve purchased a stock and then set a sell limit order on that same stock on the same day, that order will count as a day trade in our system, regardless of whether or not it gets executed. However, if the trade is not executed on the same day, it won’t actually count as a day trade for regulatory purposes, and your day trade count will be reset on the next day.
     
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  • The 'Pattern Day Trading' (PDT) rule states that a customer should not execute four or more "day trades" within a rolling 5 day period. A day trade is considered the opening and closing of the same position within the same day. By default, the fourth pattern day trade will be blocked to avoid PDT violation.
    When this happens, you will be unable to execute sell order on a security bought on the same trading day

    PDT restrictions are on a cumulative basis. Think of it as a counter that keeps getting updated based on the number of day trades made within 5 business days.

    Example: You make your first day trade on Monday. Your "counter" is 1. You make your second and third day trades on Thursday. Your "counter" becomes 3. Since the fourth day trade is blocked by default, you won't be able to make another day trade on Friday.

    The following Monday, your "counter" is reset to 2. As such, you can make one more day trade on Monday before the PDT restriction is triggered. If you try to make 2 day trades, the sell order of the last trade will not be executed.

    Pattern Day Trader (PDT) is a FINRA requirement and hence, all brokers registered with FINRA need to abide by this. The rules also require the firm to designate you as a pattern day trader if it knows or has a reasonable basis to believe that you will engage in pattern day trading. For example, if the firm provided day-trading training to you before opening your account, it could designate you as a pattern day trader.

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  • A good faith violation occurs when you buy a security and sell it before paying for the initial purchase in full with settled funds. Only cash or the sales proceeds of fully paid for securities qualify as "settled funds".

    Liquidating a position before it was ever paid for with settled funds is considered a "good faith violation" because no good faith effort was made to deposit additional cash into the account prior to the settlement date.

    If you incur 3 good faith violations in a 12-month period, we will restrict your account. This means you will only be able to buy securities if you have sufficient settled cash in the account prior to placing a trade. This restriction will be effective for 90 calendar days.

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