Restriction on borrowing by members, brokers, and dealers.
Section 19
SEC. 19. Restriction on borrowing by members, brokers, and dealers.—It shall be unlawful for any member of a securities exchange, or any broker or dealer who transacts a business in securities through the medium of any such member, directly or indirectly— To permit in the ordinary course of business as a broker his aggregate indebtedness to all persons, including customers' credit balances (but excluding indebtedness secured by exempted securities), to exceed such percentage of the net capital (exclusive of fixed assets and value of exchange membership) employed in the business, but not exceeding in any case two thousand per centum, as the Commission may by rules and regulations prescribe as necessary or appropriate in the public interest or for the protection of investors. 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 security carried for the account of any customer under circumstances— That will permit the commingling of his securities, without his written consent, with the securities of any other customer; That will permit such securities to be commingled with the securities of any person other than a bona fide customer; or That will permit such securities to be hypothecated or subjected to any lien or claim of the pledge, or for a sum in excess of the aggregate indebtedness of such customers in respect of such securities. To lend or arrange for the lending of any security carried for the account of any customer without the written consent of such customer.