Margin Regulation

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
• Covered Agency Transaction 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:

• Extension Reason Codes
• Guidance on Filing Extensions
• Holiday Schedule for 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.

Covered Agency Transaction Margin

The margin requirements relating to Covered Agency Transactions, as amended pursuant to SR-FINRA-2021-010, will become effective on May 22, 2024. “Covered Agency Transactions,” as defined more fully under amended Rule 4210(e)(2)(H)(i)b., are (1) To Be Announced (TBA) transactions (inclusive of adjustable rate mortgage transactions) with settlement dates later than T+1, (2) Specified Pool Transactions with settlement dates later than T+1, and (3) transactions in Collateralized Mortgage Obligations (CMOs), issued in conformity with a program of an agency or Government-Sponsored Enterprise (GSE), with settlement dates later than T+3.

FINRA is providing guidance in the form of answers to frequently asked questions (FAQ) regarding the application of Rule 4210 to these transactions.

FINRA has also published a separate set of Frequently Asked Questions Regarding Exchange Act Rules 15c3-1 and 15c3-3 in Connection with Covered Agency Transactions under FINRA Rule 4210 (September 15, 2017).

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.