Match each regulatory margin rule or requirement with its corresponding standard threshold… — FINRA SIE (Securities Industry Essentials)

Match each regulatory margin rule or requirement with its corresponding standard threshold or provision under Federal Reserve and FINRA regulations.

Federal Reserve Regulation T Initial MarginRequires a customer to deposit 50% of the purchase value for marginable equity transactions.
FINRA Minimum Initial Equity RuleMandates a minimum deposit of $2,000 or 100% of the purchase price, whichever is less, upon opening a new position.
FINRA Minimum Maintenance Requirement (Long Position)Requires equity in the account to remain at or above 25% of the current market value of long positions.
Pattern Day Trader Minimum Equity RequirementRequires an account to maintain at least $25,000 in equity to continue day trading activities.

Answer

Federal Reserve Regulation T Initial Margin matches the 50% deposit requirement for marginable equities. FINRA Minimum Initial Equity Rule matches the

2,000 (or 100% of purchase price if less) deposit requirement. FINRA Minimum Maintenance Requirement (Long Position) matches the 25% of current market value requirement. Pattern Day Trader Minimum Equity Requirement matches the

25,000 account equity requirement.

Each margin requirement matches its specific regulatory body and rule definition: Regulation T sets initial margin at 50% of the purchase price; FINRA Rule 4210 establishes the minimum initial equity deposit of

2,000 (or 100% of purchase price if less than

2,000); FINRA sets ongoing long maintenance equity at 25% of current market value; and FINRA requires pattern day traders to maintain at least $25,000 in account equity.

Step-by-Step Solution

Identify Federal Reserve Board requirements

Regulation T establishes the 50% initial margin deposit requirement on marginable securities.

The Federal Reserve controls credit extension in securities trading under Reg T.

Identify FINRA initial trade deposit rules

FINRA requires an absolute minimum initial equity deposit of

2,000 or the full purchase price if under

2,000.

This prevents micro-equity margin accounts from borrowing on very small transactions.

Identify ongoing account maintenance thresholds

FINRA Rule 4210 sets ongoing maintenance at 25% for long positions and $25,000 for pattern day trading accounts.

Maintenance rules protect broker-dealers against adverse market movements in customer margin accounts.

Key Concept

Margin Account Rules and Borrowing Requirements

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Step-by-Step Solution

Key Concept

Common Mistakes

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