Stockbroker Law - Wednesday, February 17, 2016
FINRA Issues Guidance on Interpretation of FINRA’s Margin Rule

In November of 2015 FINRA Regulation issued further guidance regarding FINRA Rule 4210, which sets forth the margin requirements for calculating the required amount of collateral to be maintained by customers in their margin accounts. This guidance includes both strategy-based margin accounts, as well as portfolio margin accounts and also addresses the margin requirements for equities, options, fixed income securities, warrants and other securities’ futures.

FINRA Rule 4210 is a lengthy rule which particularizes the margin requirements and margin level positions of margin accounts. It also includes a detailed summary of definitions specific to this area, including the various types of securities subject to the margin rule requirements.

The guidance offered in this article also includes the concepts of initial margin, Regulation T margin and other margin requirements specific to securities and commodities. Compliance with Regulation T and minimum equity margin requirements are also summarized in great detail with pro forma calculations and requirements relating to minimum margin, maintenance margin and Regulation T margin.

Unfortunately, many brokerage firms fail to adhere to the respective maintenance margin, minimum margin and Regulation T margin requirements, as well as their own house margin requirements, resulting in millions of dollars of losses suffered by unsuspecting customers.

We offer a free initial consultation to investors who feel may have been victimized by the failure of a broker dealer to adhere to the margin rules. For a free initial consultation contact the Law Offices of Timothy J. O'Connor at (518) 426-7700.


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