Regulatory Notice 19-21

Margin Requirements for Exchange-Traded Notes

Summary

Pursuant to FINRA Rule 4210(f)(8)(A), FINRA is establishing higher strategy-based margin requirements for exchange-traded notes (ETNs) and options on ETNs in light of the complex nature of these products.  The new requirements for initial and maintenance margin are detailed below.

In addition, FINRA is clarifying that ETNs and options on ETNs are not eligible for portfolio margining under FINRA Rule 4210(g).

If these measures would result in undue hardship to a firm or its customers, the firm may submit a written request to FINRA for additional time to comply with this Notice.

Questions concerning this Notice should be directed to:

  • Adam Rodriguez, Director, Credit Regulation, at (646) 315-8572;
  • Joseph David, Principal Specialist, at (646) 315-8444; or
  • Kathryn Moore, Associate General Counsel, Office of General Counsel, at (202) 728-8200.