Margin Accounts and Requirements
On this page
- Overview of Margin Requirements
- Interpretations of FINRA's Margin Rule
- Customer Margin Balance Reporting and Margin Statistics
- Portfolio Margin Disclosure Statement
- Contact OGC
The terms on which firms can extend credit for securities transactions are governed by federal regulation and by the rules of FINRA and the securities exchanges.
Some securities cannot be purchased on margin, which means they must be purchased in a cash account, and the customer must deposit 100 percent of the purchase price.
In general, under Federal Reserve Board Regulation T, firms can lend a customer up to 50 percent of the total purchase price of a margin security for new, or initial, purchases.
The rules of FINRA and the exchanges supplement the requirements of Regulation T by placing "maintenance" margin requirements on customer accounts.
Under these rules, as a general matter, the customer's equity in the account must not fall below 25 percent of the current market value of the securities in the account. Otherwise, the customer may be required to deposit more funds or securities to maintain equity at the 25 percent level (referred to as a margin call). Failure to do so may cause the firm to liquidate the securities in the customer's account in order to bring the account's equity back up to the required level.
The FINRA rules governing margin accounts are as follows:
- FINRA Rule 4210. Margin Requirements
- FINRA Rule 4220. Daily Record of Required Margin
- FINRA Rule 4230. Required Submissions for Requests for Extensions of Time Under Regulation T and SEA Rule 15c3-3
- FINRA Rule 4240. Margin Requirements for Credit Default Swaps
FINRA Rule 4210 (Margin Requirements) describes the margin requirements that determine the amount of collateral customers are expected to maintain in their margin accounts, including both strategy-based margin accounts and portfolio margin accounts. The rule explains the margin requirements for equity and fixed income securities, along with options, warrants and security futures.
The interpretations immediately follow the section of the rule to which they relate. The interpretations use a numbering convention of /##. For example: /01 of Rule 4210(a)(3).
- the total of all debit balances in securities margin accounts
- all free credit balances in all cash accounts
- all securities margin accounts on a settlement date basis as of the last business day of the month
After collecting this data via the Customer Margin Balance Forms, FINRA displays it in aggregate form on our Margin Statistics page.
2019 Filing Due Dates
FINRA member firms are required to submit—via the Customer Margin Balance Form—the total of all debit balances in securities margin accounts, and all free credit balances in all cash accounts and all securities margin accounts on a settlement date basis as of the last business day of the month.
|Period Ending||Due Date|
|January 31, 2019||February 8, 2019|
|February 28, 2019||March 8, 2019|
|March 29, 2019||April 8, 2019|
|April 30, 2019||May 8, 2019|
|May 31, 2019||June 10, 2019|
|June 28, 2019||July 9, 2019|
|July 31, 2019||August 8, 2019|
|August 30, 2019||September 10, 2019|
|September 30, 2019||October 8, 2019|
|October 31, 2019||November 8, 2019|
|November 29, 2019||December 9, 2019|
|December 31, 2019||January 9, 2020|
See Regulatory Notice 10-08 (Customer Margin Accounts) for more information.
Pursuant to FINRA Rule 2264 (Margin Disclosure Statement), no member shall open a margin account, as specified in Regulation T, for or on behalf of a non-institutional customer, unless, prior to or at the time of opening the account, the member has furnished to the customer, individually, in paper or electronic form, and in a separate document (or contained by itself on a separate page as part of another document), the specified margin disclosure statement. In addition, any member that permits non-institutional customers either to open accounts online or to engage in transactions in securities online must post such margin disclosure statement on the member's Web site in a clear and conspicuous manner.
Pursuant to FINRA Rule 4210(g), on or before the date of the initial transaction in a portfolio margin account, a member must provide customers with a special written disclosure statement describing the nature and risks of portfolio margining.
The disclosure statement must include an acknowledgement for all portfolio margin account owners to sign, attesting that they have read and understand the disclosure statement. Customers must also attest that they agree to the terms under which their portfolio margin account is provided.
Members must retain this signed acknowledgement and record the date of receipt.
FINRA's Office of General Counsel (OGC) staff provides broker-dealers, attorneys, registered representatives, investors and other interested parties with interpretative guidance relating to FINRA’s rules. Please see FINRA OGC Interpretative Guidance for more information.
OGC staff contacts:
1735 K Street, NW
Washington, DC 20006