Mapping Prime Brokerage Documentation to the Rules: SIA-150, SIA-151, and F1SA
Updated October 2026. First published April 2024. This version corrects the earlier one, which tied these forms to the account-transfer rules.
Prime brokerage lets a customer execute trades at many brokers and settle all of them in one account at the prime broker. SEC staff allowed the arrangement in a no-action letter dated January 25, 1994, on a long list of conditions. The letter doesn't name any forms. The industry puts its conditions on paper with a small set of documents, and each one answers a different question an examiner will ask.
The Documents and What Each One Supports
| Document | What it is | What it supports |
|---|---|---|
| SIA-150 | The base prime brokerage agreement between the prime broker and the executing broker | The written arrangement the 1994 letter assumes, under which the executing broker can treat the account as a broker-dealer credit account under Regulation T (12 CFR 220.7 today; the 1994 letter uses the section's earlier number, 220.11) |
| SIA-151 | The clearance agreement between the customer and the clearing broker on the executing side, which is the executing broker itself if it self-clears or the clearing firm of an introducing broker that executes | Clearing the customer's prime brokerage trades in a broker-dealer credit account in the prime broker's name, and confirming each trade's details to the prime broker by the morning of the next business day |
| F1SA (Form 1 Schedule A) | The account-level document that ties specific customer accounts to the arrangement | Showing that a given trade belongs to a documented prime brokerage relationship |
| The customer's instruction on confirmations | A written instruction, separate from the prime brokerage agreement | Letting the executing broker send Rule 10b-10 confirmations in care of the prime broker instead of directly to the customer |
The documents depend on each other. An F1SA points to an agreement, so it's only as good as the SIA-150 behind it. An SIA-151 applies only where the clearing broker that signed it has a prime brokerage agreement with the customer's prime broker.
What Happens When a Document Is Missing
When the conditions are met, footnote 21 of the 1994 letter says a Letter of Free Funds isn't required for trades paid for through the customer's account at the prime broker. When the executing broker can't show the arrangement, it's left with a customer cash account under 12 CFR 220.8. To deliver before payment without triggering the 90-day freeze, it then needs a Letter of Free Funds for every trade. One undocumented account can generate hundreds of letters a month; what a missing F1SA costs the executing broker works through a real case.
The other obligations move too:
- Confirmations. Under condition 11 of the letter, the executing broker confirms each trade directly to the customer unless the customer gave the separate written instruction above.
- Customer protection. FINRA's interpretation of Rule 15c3-3 has the executing broker treat a prime brokerage trade as a broker-dealer fail in the prime broker's name, for the benefit of the customer. If the prime broker disaffirms the trade, the executing broker treats the customer as its own.
- Knowledge. Condition 16 bars prime brokerage activity with a party a firm knows, or has reason to know, isn't complying with the letter. Repeated unanswered requests for an F1SA count as a reason to know.
The Account Minimums
The letter also sets a floor on the customer's account at the prime broker: minimum net equity of $500,000 in cash or securities with a ready market, or $100,000 for an account managed by a registered investment adviser. If equity drops below the minimum, the customer has until noon on the fifth business day to restore it. After that, the prime broker stops settling the customer's prime brokerage trades. Many prime brokers set higher minimums in their own agreements.
How Long to Keep the Documents
Rule 17a-4(b)(7) requires a broker-dealer to keep all written agreements relating to its business, including agreements about any account, for at least three years, the first two in an easily accessible place. For an agreement that stays in force for years, the useful reading is three years after it ends: an examiner asking about a 2026 trade needs the agreement that governed it, even if it was signed in 2019.
The Account-Transfer Rules Don't Apply
The first version of this post said these forms help firms comply with NYSE Rule 412 and NASD Rule 11870. Those rules, now FINRA Rule 11870, govern moving a customer's account from one firm to another through ACATS. Prime brokerage documents don't move accounts. They govern how trades executed elsewhere settle into an account that stays where it is.
Loffa's Prime Broker Integrated Network (PBIN) holds the SIA-150 and F1SAs for each relationship in one place, and when the prime broker and the executing broker both use PBIN, they share the same record. The clearing firm on the executing side keeps its customers' SIA-151s there too, on its own side. PBIN keeps its records for the life of the agreement plus six years.