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Margin Regulation

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Overview of Margin Requirements

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:

2022 Report on FINRA’s Examination and Risk Monitoring Program

The Portfolio Margin and Intraday Funding section of the 2022 Report on FINRA’s Risk Monitoring and Examination Activities (the Report) informs member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations, including (1) relevant regulatory obligations and related considerations, (2) exam findings and effective practices, and (3) additional resources.

Interpretations of FINRA's Margin Requirements Rule

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 of Rule 4210 contain both the interpretation of the rule and the actual rule text. These are published as guidance and assistance for the reader to better understand the application of the rule.


FINRA Rule 4521 requires that member firms that carry customer margin accounts must submit — via the Customer Margin Balance Form — the following numbers:

  • 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.

See Margin Balance Reporting: Frequently Asked Questions under FINRA Rule 4521(d) (published April 13, 2021) and Regulatory Notice 10-08 (Customer Margin Accounts) for more information.

Request Access to the Customer Margin Balance Reporting Form


Margin Disclosure Statements

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.


CONTACT OGC

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 Interpreting the Rules for more information.

  • 2022 Holiday Margin Extensions Schedule
  • FINRA Announces Updates to the Interpretations of FINRA’s Margin Rule Regarding Minimum Equity
  • FINRA Announces Updates to the Interpretations of FINRA’s Margin Rule for Day Trading
  • 2021 Holiday Margin Extensions Schedule
  • FINRA Announces Updates to the Interpretations of FINRA’s Margin Rule Regarding Control and Restricted Securities and Consolidation of Accounts
  • 2020 Holiday Margin Extensions Schedule
  • Margin Requirements for Exchange-Traded Notes
  • FINRA Extends Effective Date of Margin Requirements for Covered Agency Transactions
  • FINRA Extends Effective Date of Margin Requirements for Covered Agency Transactions
  • 2018 Holiday Trade Date, Settlement Date and Margin Extensions Schedule
  • FINRA Makes Available Frequently Asked Questions and Guidance and Extends Effective Date of Margin Requirements for Covered Agency Transactions: New Effective Date: June 25, 2018
  • (Margin Requirements) to Establish Margin Requirements for Covered Agency Transactions
  • SEC Approves Consolidated FINRA Rules 4314 (Securities Loans and Borrowings), 4330 (Customer Protection — Permissible Use of Customers' Securities) and 4340 (Callable Securities)
  • FINRA Requests Comment on Proposed Amendments to FINRA Rule 4210 for Transactions in the TBA Market
  • SEC Approves Amendments to FINRA Rule 4210 (Margin Requirements)
  • FINRA Revises the Treatment of Non-Margin Eligible Equity Securities and Delays the Effective Date
  • Treatment of Non-Margin Eligible Equity Securities
  • Guidance on Low-Priced Equity Securities in Customer Margin and Firm Proprietary Accounts
  • Margin Requirements for Exempted Securities Mutual Funds and Exempted Securities ETFs
  • SEC Approval and Effective Date for New Consolidated FINRA Rules Regarding Margin Requirements, Daily Record of Required Margin, and Extension of Time Requests
  • FINRA Issues Guidance on Master and Sub-Account Arrangements
  • FINRA Requests Comments on Proposed Consolidated FINRA Rules Governing Securities Loans and Borrowings, Permissible Use of Customers' Securities and Callable Securities
  • FINRA Delays the Effective Date for Increased Margin Requirements for Options on Leveraged ETFs and Day-Trading Requirements for Leveraged ETFs
  • Increased Margin Requirements for Leveraged Exchange-Traded Funds and Associated Uncovered Options
  • FINRA Grants Additional,Temporary Relief from the Net Capital, Reserve Formula, Non-purpose Loan, & Maintenance Margin Requirements Applicable to Credit Extended on Auction Rate Securities to Broker-Dealers That Agree to Buy Back Auction Rate Securities
  • FINRA Announces Temporary Margin Maintenance, Net Capital and Reserve Formula Requirements Related to Money Market Mutual Funds Effective Date: October 21, 2008
  • FINRA Temporarily Increases Margin Maintenance Requirements on Auction Rate Securities Backed by Fixed Income Products
  • Portfolio Margin Risk Disclosure Statement and Written Acknowledgement to be Furnished to Customers Using a Portfolio Margin Account
  • NASD Adopts Amendments Regarding the Posting of Margin Disclosure and Day-Trading Risk Disclosure Statements on Web Sites
  • 2022 Report on FINRAs Examination and Risk Monitoring Program
    The Portfolio Margin and Intraday Trading section of the 2022 Report on FINRA’s Risk Monitoring and Examination Activities (the Report) informs member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations, including (1) relevant regulatory obligations and related considerations, (2) exam findings and effective practices, and (3) additional resources.
    February 09, 2022
  • FAQ
    View frequently asked questions and guidance to aid members in their reporting obligations under FINRA Rule 4521(d). Note: This guidance only applies to members that need to report data pursuant to Rule 4521(d).
    April 13, 2021
  • FAQ
    View frequently asked questions and guidance about covered agency transactions under FINRA rule 4210 and frequently asked questions regarding SEA Rule 15c3-1 and Rule 15c3-3.
    September 18, 2017
  • Guidance
    The interpretations offer guidance to assist firms in complying with FINRA Rule 4210.
  • FAQ
    View frequently asked questions related to portfolio margining under FINRA Rule 4210.
  • Investor Alert
    FINRA is re-issuing this alert because we are concerned that many investors may underestimate the risks of trading on margin and misunderstand the operation of, and reason for, margin calls.
  • Investor Education
    We are issuing this investor guidance to provide some basic facts to investors about the practice of purchasing securities on margin, and to alert investors to the risks involved with trading securities in a margin account.
  • Investor Education
    We are issuing this investor guidance to provide some basic facts to investors about the mechanics of margin accounts.
  • Investor Education
    Pursuant to FINRA Rule 4521, FINRA member firms carrying margin accounts for customers are required to submit the following customer information: the total of all debit balances in securities margin accounts; and, the total of all free credit balances in all cash accounts and all securities margin accounts.