In conversation with Charles Greiner III, Director at Regnology

Can you briefly share your career background and how you came to specialize in broker-dealer capital calculations and regulatory reporting?

I began my career in trading in the late 1990s while earning a degree in economics from San Diego State University. Up until 2013, I focused on trading and software, including a period focused primarily on SEA Rule 15c3-1 regulatory compliance. After five and a half years outside the industry, I returned in 2018 and founded CG3-1, developing an application to automate a key component of the SEC’s Net Capital Rule (SEA Rule 15c3-1).

What began as a one-person effort quickly grew to serve dozens of large broker-dealers seeking a more accurate, more optimized, scalable way to calculate their capital requirements. Six years later, Regnology acquired CG3-1, bringing our specialized capabilities into its global reporting framework.

How does CG3-1’s technology complement Regnology’s existing regulatory reporting solutions?

In broker-dealer reporting, net capital calculations like Rule 15c3-1 are the foundation; the resulting data then flows into downstream deliverables like SEC FOCUS Reports. By combining our calculation engine with Regnology’s workflow tools, firms can now access a truly end-to-end reporting chain. This integration not only enhances accuracy but also strengthens continuity and governance – two factors critical for both regulators and the regulated. 

As a foundation for numerous reporting requirements, our product set, once implemented, becomes a central part of firms’ daily regulatory processes. That makes this integration particularly powerful for Regnology’s North American clients, who can now leverage a unified solution from data ingestion through report submission. 

It’s a natural vertical alignment. CG3-1 handles the regulatory capital calculations – the “number crunching” that determines solvency ratios and reserve requirements – while Regnology has extensive last-mile reporting infrastructure that serves thousands of financial institutions worldwide.

Charles Greiner III Director
Regnology

From your perspective, what are the biggest capital calculation and reporting challenges broker-dealers face today?

For large trading firms, achieving accuracy at scale is the primary challenge. Net capital computations involve intricate hedging, and hyper-rule-specific calculations that must be applied to thousands of positions each day, often multiple times per day while maintaining alignment with the SEC 15c3-1 rule set and requirements. 

Few vendors have the SEA Rule 15c3-1 subject matter expertise to properly automate these calculations. Even sophisticated firms prefer to use a vendor rather than build in-house 15c3-1 solutions.

There is no room for error. An incorrect haircut calculation can quietly create capital shortfalls that go unnoticed until audit or examination. In other cases, incomplete documentation and credit policies, such as those governing minimal credit risk assessment requirements for commercial paper, can materially increase haircut exposure despite the fact that commercial paper is generally considered a very low risk asset class.

Some instruments like warrants, restricted securities and non-investment-grade securities demand specialized treatment., while hedged positions, reverse repos and unlisted or illiquid instruments introduce further layers of calculation complexity. 

The solution for all of this is having the right SEA Rule 15c3-1 subject matter expertise – codified and automated within a system that can execute these calculations consistently and transparently.

Firms that fail to validate their logic against regulatory expectations risk not only reporting inaccuracies but also material capital misstatements that can affect liquidity and solvency assessments.

Charles Greiner III Director
Regnology

When you talk about reporting accuracy, is the main issue data quality, rule comprehension – or both really?

Both contribute, although rule comprehension is by far the biggest source of error. Many broker-dealers have talented in-house regulatory reporting teams, finance teams, and IT departments. However, they rarely spend several hours per month reading and re-reading Rule 15c3-1, and they lack the detailed level of 15c3-1 subject matter expertise needed to fully understand how the components of the SEC’s Net Capital Rule interact.

Similarly, data quality issues can also arise when firms don’t know which data points are required to preform a calculation in alignment with the SEC rules. Technology alone can’t bridge that knowledge gap. The advantage of CG3-1 – now Regnology Reporting Hub for Broker-Dealers is that we embed both subject-matter expertise and data engineering within the same framework. This ensures the inputs, calculations and validations are all aligned with what regulators are looking for. 

Beyond standard broker-dealer reporting considerations, digital assets bring their own set of challenges. What do you see as the biggest challenges in the specific world of crypto reporting?

Crypto is creating cross-regulatory complexity that existing rules generally were never designed to address. For example, firms may hedge Bitcoin ETFs – SEC-regulated products – with Bitcoin futures, which are regulated by the CFTC. Capital rules written 30 years ago did not contemplated a haircut calculation for a Bitcoin ETF hedged by a Bitcoin futures contract, so the industry has had to think about how to account for these hedges when calculating regulatory capital under SEA Rule 15c3-1. For this specific example, the existing 15c3-1 rules can be applied in the same way that the industry has been handling commodity ETFs hedged by commodity futures.

However, an example where the existing rules may need to be updated to allow fully hedged positions to be recognized for Net Capital computation purposes would be listed options on Bitcoin ETFs, hedged by listed options on Bitcoin futures contracts. My understanding is that SEC is working with the CFTC to introduce rule changes that would reduce capital requirements for broker-dealers when trading well hedged positions such as the one described in this example. This ambiguity poses operational and compliance challenges. Broker-dealers are forced to reconcile exposures across two regulatory regimes while ensuring capital adequacy on a consolidated basis. Until the SEC updates its rules to explicitly address this new market reality, Regnology’s expert guidance and robust modeling tools become essential. 

Looking ahead, how do you see the Regnology Reporting Hub advancing broker-dealer reporting? 

The immediate focus is workflow efficiency and reliability. Regnology brings enterprise-grade orchestration, data pipelines and “last-mile” infrastructure that can host aggregated, non-sensitive data in secure cloud environments – streamlining updates and maintenance for clients. At the same time, the core capital calculation engine will continue to operate with the precision and control that these mission-critical computations demand.

By combining these strengths, we’re delivering a framework that meets the highest regulatory standards while easing firms’ operational burden. This is a crucial step toward greater transparency and consistency in the U.S. broker-dealer regulatory reporting landscape.