4427. Rules for counting securities

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    1. At least once a year, a Dealer Member must count physical securities held:

      1. in segregation, and

      2. for safekeeping,

    2. in addition to its annual external audit physical security count.

    3. At least monthly, a Dealer Member must count physical securities held in current boxes.

    4. Only employees who do not handle securities may conduct physical security counts.

    5. Count procedures must include all physical securities held in the box location subject to the count and must simultaneously verify related positions such as positions in transit or in the process of being transferred.

    6. During a physical security count, both the description of the security and the quantity must be compared to the Dealer Member’s records. Any discrepancies must be investigated and corrected promptly. Positions not reconciled within a reasonable period must be promptly reported to the Dealer Member’s appropriate Executives and accounted for.

    There is no history log for this rule.