An investor opens a new margin account and executes an initial transaction purchasing 100 … — FINRA SIE (Securities Industry Essentials)

An investor opens a new margin account and executes an initial transaction purchasing 100 shares of XYZ Corporation stock at $30 per share. Assuming Federal Reserve Board Regulation T is set at 50%, what is the minimum required initial margin deposit the customer must make?

A
$1,500
$2,000Cevap
C
$3,000
D
$1,000

Cevap

The minimum required initial margin deposit is $2,000.

For an initial margin purchase totaling

3,000, Regulation T requires 50% (

1,500). However, FINRA rules mandate a minimum initial equity deposit of

2,000 for opening margin positions when the trade value is between

2,000 and

4,000. Because

2,000 is greater than

1,500, the investor must deposit

2,000.

Adım Adım Çözüm

Calculate total purchase value

100 shares ×

30/share =

3,000

Margin requirements are calculated based on the total market value of the trade.

Calculate Regulation T 50% requirement

50% of

3,000 =

1,500

Federal Reserve Board Regulation T requires customers to deposit at least 50% of the transaction value.

Apply FINRA initial minimum equity requirement

FINRA minimum initial equity is

2,000 for transactions between

2,000 and $4,000.

FINRA Rule 4210 dictates an absolute minimum initial equity requirement of

2,000 (or 100% of the purchase price if the purchase value is under

2,000).

Compare Regulation T and FINRA minimum requirements

The investor must deposit

2,000, which is the greater of the two requirements (

1,500 vs. $2,000).

The customer must satisfy the stricter of Federal Reserve Regulation T or FINRA SRO rules.

Anahtar Kavram

Initial Margin Requirements under Regulation T and FINRA Minimum Initial Equity Rules

Tahmini Süre:1m 30s

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