Section 8 -- Restrictions on Borrowing and Lending by Members, Brokers, and
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
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.
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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