4.2.1.1. Requirement to Secure Possession or Control
A broker-dealer must determine every day the quantity of fully paid and excess margin securities in its possession and control at the close of business on the previous day. If a portion of its securities are not in its physical possession or control, it must take one of the following actions by the next business day:
• For securities subject to a lien securing money the broker-dealer borrowed, issue instructions to release those securities within two business days.
• For securities on loan to another broker-dealer, issue instructions to return those securities within five business days.
• For “failed to receive” securities lasting longer than 30 calendar days, take prompt steps to obtain them through a buy-in procedure.
• For securities receivable as a dividend or stock split longer than 45 calendar days, obtain them through a buy-in procedure.
• For securities that allocate to a short position for more than 30 calendar days, take prompt steps to obtain them (except for certain sell orders).
Broker-dealers must prepare and maintain a detailed description of the procedures they use to comply with the above instructions. The