On This Page
- Overview of Margin Requirements
- Extensions of Time
- Interpretations of FINRA's Margin Rule
- Customer Margin Balance Reporting and Margin Statistics
- Portfolio Margin
- Margin Disclosure Statements
- External Resources
- Contact OGC
Overview of Margin Requirements
The terms on which FINRA member firms (brokers) can extend credit for securities transactions are governed by federal regulation and by the rules of FINRA.
Some securities cannot be purchased on margin, which means the customer must deposit 100 percent of the purchase price in their account. These securities may still be purchased and held in a margin account.
In general, under Federal Reserve Board Regulation T (Reg T), brokers can lend a customer up to 50 percent of the total purchase price of a margin equity security for new purchases. Regulation T only sets the initial margin requirements on equity securities but FINRA’s margin rule, 4210, adds initial margin requirements on securities that Reg T does not set specific requirements like corporate bond. Additionally, Rule 4210, specifies maintenance requirements that set a limit to the value that an account can lose. If an account drops below these limits (creating a “margin deficiency”), a customer is required to either deposit additional collateral or liquidate positions in the account. Importantly, brokers, at their discretion, may liquidate an account at any time to eliminate a margin deficiency.
Additional information is available in the Investor Education section.
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. Security-Based Swap Margin Requirements
Extensions of Time
FINRA Rule 4230 permits member firms to request additional time to comply with the payment period for purchases and margin deficiencies as required by Regulation T. The rule also allows member firms to request additional time for certain short security conditions.
For more information about filing extensions:
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.
Customer Margin Balance Reporting and Margin Statistics
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
Portfolio Margin
Portfolio margining is an alternate margin methodology that sets margin requirements for an account based on the greatest projected net loss of all positions in a group of related securities such as a stock and options that reference the same stock. The computation relies on computer modeling to perform risk analysis using multiple pricing scenarios and these scenarios are designed to measure the theoretical gains or losses of the positions given changes in the underlying price. Accordingly, the margin required is based on the greatest loss that would be incurred in a portfolio if the value of its components move up or down by a predetermined amount.
See Portfolio Margin Data for information regarding filings required by member firms related to their portfolio margin programs.
Additional information about portfolio margin is available from the Options Clearing Corporation, please see the External Resources below.
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.
For more information, see Regulatory Notice 08-09.
External Resources
Federal Reserve Regulatory Service
Regulation T: Credit by Brokers and Dealers
Commentary and interpretations of Regulation T by the staff of the Board of Governors of the Federal Reserve System are in the Securities Credit Transactions section under Supplementary Information.
The Options Clearing Corporation
Customer Portfolio Margin
Customer Portfolio Margin System ("CPM") was developed by The Options Clearing Corporation ("The OCC") to support portfolio-based margining of customer accounts as permitted by Regulation T and FINRA Rule 4210. The OCC provides more information about the margin model used and how the calculations work.
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.
FINRA Rules
FINRA Rules
FINRA Rules
FINRA Rules
FINRA Rules
FINRA Rules
Regulation T and SEA Rule 15c3-3 Extension of Time Requests Under a T+1 Settlement Cycle
09/05/2023
Amendments to Covered Agency Transaction Requirements under FINRA Rule 4210; Announcement of Effective Date
08/18/2023
2023 Holiday Margin Extensions Schedule
11/18/2022
FINRA Adopts Amendments to Clarify the Application of FINRA Rules to Security-Based Swaps
01/20/2022
FINRA Announces Updates to the Interpretations of FINRA’s Margin Rule Regarding Minimum Equity
07/06/2021
FINRA Reminds Members About Options Account Approval, Supervision and Margin Requirements
04/09/2021
FINRA Announces Updates to the Interpretations of FINRA’s Margin Rule for Day Trading
03/24/2021
FINRA Requests Comment on Proposed Amendments to the Margin Rule Regarding When Issued and Other Extended Settlement Transactions
03/14/2021
FINRA Requests Comment on a Concept Proposal Regarding the Application of FINRA Rules to Security-Based Swaps
10/15/2020
FINRA Announces Updates to the Interpretations of FINRA’s Margin Rule Regarding Control and Restricted Securities and Consolidation of Accounts
07/02/2020
Margin Requirements for Exchange-Traded Notes
07/01/2019
FINRA Extends Effective Date of Margin Requirements for Covered Agency Transactions
02/12/2019
Unexpected Close of Securities Markets
12/03/2018
Enhancements to the REX System and Updates to Data and Other Requirements Applicable to Requests for Extensions of Time Under Regulation T and SEA Rule 15c3-3
09/13/2018
FINRA Extends Effective Date of Margin Requirements for Covered Agency Transactions
05/03/2018
Extension of Time Requests Relating to FINRA Rule 4210
02/14/2018
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
09/29/2017
Regulation T and SEA Rule 15c3-3 Extension of Time Requests Under a T+2 Settlement Cycle
04/07/2017
(Margin Requirements) to Establish Margin Requirements for Covered Agency Transactions
08/12/2016
Revised SEC No-Action Guidance Expanding the Definition of "Ready Market" for Certain Foreign Equity Securities
04/20/2016
Extension of Time Requests Relating to New SEA Rule 15c3-3(d)(4)
03/25/2014
SEC Approves Consolidated FINRA Rules 4314 (Securities Loans and Borrowings), 4330 (Customer Protection — Permissible Use of Customers' Securities) and 4340 (Callable Securities)
02/03/2014
FINRA Requests Comment on Proposed Amendments to FINRA Rule 4210 for Transactions in the TBA Market
01/27/2014
SEC No-Action Guidance Expanding the Definition of "Ready Market" for Certain Foreign Equity Securities
12/27/2012
SEC Approves Amendments to FINRA Rule 4210 (Margin Requirements)
10/26/2012
Interim Pilot Program on Margin Requirements for Credit Default Swaps
07/15/2011
FINRA Revises the Treatment of Non-Margin Eligible Equity Securities and Delays the Effective Date
06/27/2011
Treatment of Non-Margin Eligible Equity Securities
04/07/2011
Guidance on Low-Priced Equity Securities in Customer Margin and Firm Proprietary Accounts
04/04/2011
Margin Requirements for Exempted Securities Mutual Funds and Exempted Securities ETFs
10/26/2010
SEC Approval and Effective Date for New Consolidated FINRA Rules Regarding Margin Requirements, Daily Record of Required Margin, and Extension of Time Requests
10/04/2010
New System for Processing Regulation T and SEA Rule 15c3-3 Extension of Time Requests
06/09/2010
FINRA Issues Guidance on Master and Sub-Account Arrangements
04/06/2010
Filing Requirements for Members that Carry Customer Margin Accounts
02/10/2010
FINRA Requests Comments on Proposed Consolidated FINRA Rules Governing Securities Loans and Borrowings, Permissible Use of Customers' Securities and Callable Securities
01/05/2010
FINRA Delays the Effective Date for Increased Margin Requirements for Options on Leveraged ETFs and Day-Trading Requirements for Leveraged ETFs
11/17/2009
Increased Margin Requirements for Leveraged Exchange-Traded Funds and Associated Uncovered Options
08/31/2009
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
11/04/2008
FINRA Announces Temporary Margin Maintenance, Net Capital and Reserve Formula Requirements Related to Money Market Mutual Funds Effective Date: October 21, 2008
10/21/2008
FINRA Announces Amendments to Make Permanent the Portfolio Margin Pilot Program
08/08/2008
FINRA Consolidates the Collection and Processing of Regulation T and SEC Rule 15c3-3 Extension of Time Requests
06/23/2008
FINRA Revises Portfolio Margining Risk Disclosure Statement and Written Acknowledgment for Customers Using Portfolio Margin Accounts
03/14/2008
FINRA Temporarily Increases Margin Maintenance Requirements on Auction Rate Securities Backed by Fixed Income Products
03/05/2008
Portfolio Margin Risk Disclosure Statement and Written Acknowledgement to be Furnished to Customers Using a Portfolio Margin Account
03/19/2007
Amendment to Margin Rules to Establish a Portfolio Margin Pilot Program
02/20/2007
SEC Approves Rule 3160 Regarding Submission and Reporting Requirements for Regulation T and SEC Rule 15c3-3 Extension of Time Requests
11/13/2006
Amendments to the Fee for Extension of Time Requests under Regulation T and SEC Rule 15c3-3
06/09/2006
Amendments to Margin Rules to Reflect Additional Complex Option Spread Strategies
05/25/2006
Unexpected Close of Securities Markets
07/06/2005
NASD Reminds Member Firms of Their Obligations to Adhere to Credit Extension Requirements and Day Trading Margin Rules
05/07/2004
NASD Adopts Amendments Regarding the Posting of Margin Disclosure and Day-Trading Risk Disclosure Statements on Web Sites
06/11/2002
NASD Regulation Extends Deadline For Delivery Of Margin Disclosure Statement To Existing Non-Institutional Customers To January 31, 2002
05/29/2001
SEC Approves NASD Rule Proposal Requiring Delivery Of Margin Disclosure Statement To Non-Institutional Customers
05/04/2001
SEC Approves Proposed Rule Change Relating To Day-Trading Margin Requirements
03/27/2001
Relating To Cash And Margin Treatment For Certain Types Of Options Positions
01/25/2001
NASD Regulation Files Rule Proposal with SEC Requiring Delivery of Margin Disclosure Statement to Customers
09/05/2000
SEC Approves Day-Trading Rules
09/01/2000
SEC Approves Proposed Rule Change Relating To Margin For Exempted Borrowers, Good Faith Accounts, Joint Back Office Arrangements, Control And Restricted Securities, And Options Transactions
07/27/2000
NASD Announces Changes To Regulation T And SEC Rule 15c3-3 Extension Request Reason Codes
12/10/1999
NASD Regulation Advises Members About Maintenance Margin Requirements For Certain Volatile Stocks And Solicits Comment On Margin Practices
04/01/1999
NASD Regulation Requests Comment On Proposed Rules Regarding Approval Procedures For Day - Trading Accounts, Including Appropriateness Determinations, And Disclosure Of Risks Of Day - Trading Activities
04/01/1999
Calculating Margin For Day-Trading And Cross-Guaranteed Accounts
12/01/1998
Federal Reserve System Amends Regulations T, U, And X
06/01/1998
NASD Regulation Requests Comments On Amendments To The Free-Riding And Withholding Interpretation
05/01/1997
Request For Comments On Proposed Changes To Regulations G, T, And U
06/01/1996
Fed Approves Amendments To Regulation T
06/01/1996
Fed. Proposes Changes To Reg. T;
08/01/1995
Conversion To T+3 Settlement, Reg. T, And SEC Rule 15c3-3(m), And Ex-Dividend Schedule
04/01/1995
Fed Amends Regulation T
11/01/1994
SEC Proposes Amendments To Regulation T
07/01/1994
SEC Approves New NASD Margin Rules
04/01/1993
Request for Comments on Proposed Exemption From Free-Riding Interpretation for Conversion of Savings and Loan Associations
04/08/1986
Request for Comments on Proposed Exemption from Free-Riding Interpretation for Conversions of Savings and Loan Associations
12/02/1985
Federal Reserve Board Acts to Grant Immediate Margin Status To All NASDAQ/NMS Issues
10/23/1984
Adoption of Revised and Simplified Regulation T of the Federal Reserve Board
07/07/1983
Guidance
List of extension reason codes with summary information and filing details.
June 30, 2023
Guidance
FINRA Rule 4230(a) requires clearing firms for which FINRA is the designated examining authority pursuant to SEA Rule 17d-1 to submit requests for extensions of time as contemplated by Regulation T of the Board of Governors of the Federal Reserve System1("Regulation T") and SEA Rule 15c3-3(n)2to FINRA for approval.
June 30, 2023
Guidance
FINRA Rule 4230(a) requires clearing firms for which FINRA is the designated examining authority pursuant to SEA Rule 17d-1 to submit requests for extensions of time as contemplated by Regulation T of the Board of Governors of the Federal Reserve System (Regulation T) and SEA Rule 15c3-3(n) to FINRA for approval.
June 30, 2023
2023 Report on FINRAs Examination and Risk Monitoring Program
The Portfolio Margin and Intraday Trading section of the 2023 Report on FINRA’s Examination and Risk Monitoring Program (the Report) informs member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations, including (1) regulatory obligations and related considerations, (2) findings and effective practices, and (3) additional resources.
January 10, 2023
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.
Guidance
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.
FAQ
View frequently asked questions related to portfolio margining under FINRA Rule 4210.
Investor Education
Volatility—market swings—can sometimes bring an uncomfortable surprise to investors: a margin call. When you buy stock on margin, your brokerage firm lends you cash, using assets in your account as collateral, to purchase securities. To trade on margin, you must have a margin account with your brokerage firm.
Investor Education
A customer who purchases securities may pay for the securities in full or may borrow part of the purchase price from their securities firm. If the customer chooses to borrow funds from a firm, the customer must open amargin accountwith the firm.
Investor Education
Brokerage accounts allow investors to buy and sell numerous types of investments. When opening a brokerage account, investors have two main options: a cash account or a margin account. The difference between them is how and when you pay for your investments.
Investor Education
With a margin account, you can borrow funds to purchase securities; with a cash account, you cannot.
With a cash account, you’re expected to pay the full amount for all securities purchased by the settlement date—which, for most securities, means paying for them two days after you place an order to buy. Note: Options require payment on the following day.
Investor Education
Day trading refers to a trading strategy where an individual buys and sells (or sells and buys) the same security in a margin account on the same day in an attempt to profit from small movements in the price of the security. FINRA’s margin rule for day trading applies to day trading in any security, including options.
