On March 25, the Financial Industry Regulatory Authority (FINRA) issued a notice warning member firms that there appears to be an increase in new customers opening online brokerage accounts and engaging in Automated Clearing House (ACH) “instant funds” abuse to effect securities trading. Some firms provide individuals opening a brokerage account online with instant access to funds, allowing those customers to trade in their online accounts as soon as they enable ACH transactions, without having to wait for the payment to settle. FINRA has observed that the increase in misuse of instant funds is correlated with the recent market volatility driven by social media interest in certain securities.
Continue Reading FINRA Alerts Firms to Recent Increase in ACH “Instant Funds” Abuse
Federal Reserve To Require Same-Day ACH Service
By Jeffrey M. Werthan on
Posted in Banking
On September 23, the Federal Reserve Board announced the approval of “enhancements” to the Federal Reserve Banks’ same-day automated clearing house (ACH) service. According to the Fed, “[t]he enhancements are intended to align the Reserve Banks’ same-day ACH service with recent amendments to NACHA’s (formerly known as the National Automated Clearing House Association) ACH…