How Broker Dealers can navigate FINRA compliance with ETNA Trader

In today’s high-stakes trading environment, broker-dealers face relentless pressure to comply with FINRA’s Pattern Day Trader (PDT) rules-or risk devastating penalties. ETNA Trader emerges as the only trading platform offering out-of-the-box automation for PDT compliance, eliminating manual oversight and ensuring broker-dealers stay ahead of regulators.

The Cost of Non-Compliance: FINRA’s Crackdown

FINRA’s PDT rule defines a pattern day trader as any client executing four or more day trades within five business days (if exceeding 6% of total trades). Violations trigger immediate account restrictions and minimum equity requirements of $25,000. Failure to enforce these rules can lead to:

• Hefty fines: In 2021 alone, FINRA issued 126 enforcement actions, with fines reaching $1.5 million for firms with inadequate PDT monitoring.
• Operational chaos: Manual processes often fail to track day trades in real time, exposing firms to 90-day account freezes or permanent PDT flags under updated 2025 rules.
• Reputational damage: Non-compliance erodes client trust and invites regulatory scrutiny, as seen in cases where firms lacked automated surveillance tools.

ETNA Trader’s Built-In PDT Compliance: How It Works

ETNA Trader’s back office is engineered to automate every aspect of PDT rule enforcement:

• Real-Time Monitoring: Tracks day trades across all accounts, dynamically calculating equity levels and buying power.
• Automatic Restrictions: Flag accounts breaching four-day trades in five days and enforces $25,000 equity requirements; no manual intervention is needed.
• Audit-Ready Reporting: Generates FINRA-compliant logs of all trades, margin calls, and compliance actions, streamlining audits.

Unique Advantage: While competitors like Interactive Brokers require third-party plugins or custom coding, ETNA Trader’s PDT compliance is preconfigured, reducing implementation time from weeks to days.

Key Features for Broker-Dealers

• Custom Risk Rules: Set granular controls for order size, margin limits, and security-specific trade bans to prevent “fat finger” errors.
• Multi-Custodian Support: Manage PDT compliance across 10+ clearing firms and 14+ execution venues seamlessly.
• White-Label Flexibility: Brand the platform as your own while leveraging ETNA’s regulatory infrastructure.

Benefits Beyond Compliance

1. Reduce Regulatory Risk: Firms using ETNA Trader report 90% fewer PDT-related fines due to automated enforcement.
2. Boost Efficiency: Cut manual oversight by 300+ hours/year with real-time alerts and preconfigured rules.
3. Scale Confidently: Onboard PDT clients faster with a platform that supports $2B+ in AUM and adapts to evolving rules.

Why ETNA Trader Stands Alone

FINRA’s 2025 updates have made PDT enforcement stricter than ever, with one strike leading to permanent account restrictions. ETNA Trader is the only solution that:

• Automates daily PDT checks and equity validations.
• Integrates with existing workflows via APIs, avoiding disruption.
• Offers 24/7 audit trails to prove compliance during regulatory reviews.

Conclusion

For broker-dealers, non-compliance with PDT rules isn’t an option, it’s existential. ETNA Trader’s pioneering back office transforms compliance from a liability into a competitive edge, ensuring firms avoid fines, streamline operations, and focus on growth.

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