The Securities and Exchange Commission says Morgan Stanley will pay $7.5 million to settle charges it used trades involving institutional clients’ cash to lower its borrowing costs. These activities, which took place from March 2013 to May 2015, violated the SEC’s Customer Protection Rule.

According to the SEC, this regulation prohibits broker-dealers from using affiliates to reduce their customer reserve account deposit requirements.

“The Customer Protection Rule establishes crucial safeguards for investors to ensure that their cash and securities are secure when held by a broker-dealer,” said Michael J. Osnato, chief of the SEC Enforcement Division’s Complex Financial Instruments Unit, in a statement. “Complex trading schemes designed to artificially reduce the amount a broker-dealer must maintain in its customer reserve account run contrary to these basic obligations.”

The regulator says Morgan Stanley Equity Financing acted as “a customer” of its U.S. broker-dealer, which means this affiliate could use margin loans from the company’s U.S. broker-dealer to finance the costs of hedging swap trades with institutional clients, the SEC order states.

By using margin loans, the firm lowered the borrowing costs incurred when hedging these swap trades and “reduced the U.S. broker-dealer’s customer reserve account deposit requirements by tens to hundreds of millions of dollars per day,” the regulator explains.

For its part, Morgan Stanley says it “takes its obligations to protect customer assets very seriously, which is why the firm moved promptly to rectify the issues addressed in this settlement and enhanced our controls and procedures.”

“In addition, the firm maintains substantially greater amounts than are required in its Customer Reserve Account, so we do not believe that the firm’s clients were at risk,’’ it said in a statement.