SEC Granted No-Action Relief for Certain Brokerage Accounts

The decision allows eToro and Alpaca to operate accounts that do not hold customer cash in specific brokerage settings.

Updated on Sept. 19, 2026 in Investing

Bold flat-color editorial illustration depicting a heavy brass key on a marble plinth, representing secure external financial account management. — The SEC granted no-action relief to eToro and Alpaca, allowing them to manage brokerage accounts where customer cash is held exclusively in external banking institutions. AI Illustration. Upload story photo >

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The SEC staff has issued no-action relief to eToro USA Securities and Alpaca Securities for accounts that do not maintain customer cash balances. This arrangement allows these firms to facilitate market access for foreign customers while adhering to specific fund handling and net capital requirements.

Why it matters

This regulatory shift is designed to streamline foreign exchange conversions and support foreign investors looking to access U.S. financial markets. It clarifies how brokerage firms can structure accounts when customer funds remain in external banking or money transmitter institutions.

eToro maintains a $5,000 minimum net capital, while Alpaca is required to hold $250,000 or 2% of aggregate debit items. These figures support operations for firms managing large-scale capital, including Alpaca’s recent $435 million raise.

The players

eToro USA Securities

A brokerage firm providing stock trading services that recently agreed to acquire TradeZero.

Alpaca Securities

A brokerage firm that clears trades for its own customers and other brokers while maintaining significant capital reserves.

SEC

The federal agency responsible for regulating markets and enforcing investor protection rules.

The details

Under this guidance, customer funds for these accounts must be held strictly in external accounts at a bank or money transmitter, which are prohibited from commingling these assets with their own money. For trades, proceeds from share sales must be returned to the external account by the close of the next business day. Investors should note that agreements must explicitly state that these externally held funds are not protected by the Securities Investor Protection Corporation (SIPC).

July 2020: eToro began offering commission-free U.S. stock trading.
July 2026: Alpaca raised $435 million in capital.
August 2026: eToro entered an agreement to acquire TradeZero for $231 million.
September 2026: SEC staff granted the no-action relief to the firms.

Money Landscape

This development marks a specific exception to standard brokerage protections under the Securities Investor Protection Act. It highlights the growing complexity of international market access as firms expand to accommodate global investors.

If you use these platforms, review your customer agreements to confirm whether your funds are held in external accounts that fall outside of SIPC protection. Consult with a qualified financial professional to understand the specific risks associated with any brokerage account that does not hold your cash directly.

The takeaway

The SEC has provided a regulatory path for firms to manage specific accounts that do not hold customer cash. Investors should verify the custody location of their assets and confirm if those funds are eligible for SIPC insurance before moving money into new trading structures.