Under California Commissioner's Regulation 2835, which of the following correctly states the rule on a broker's own funds in a trust account?
Correct Answer
B) Up to $200 of the broker's own funds may be kept in the account to pay bank charges on it
Commissioner's Regulation 2835 defines commingling and carves out a narrow exception: depositing reasonably sufficient funds of the broker's own, not to exceed $200, to pay service charges or fees levied or assessed against the trust account is not commingling. The exception is limited to charges against that account, so no larger cushion and no other purpose qualifies. The broker's own funds in the account must be identified at all times in a separate record and must be disbursed no later than 25 days after deposit. Leaving more than $200 of broker money in a trust account is one of the violations the Department cites most often in audits.
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Related Topics & Key Terms
Key Terms:
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