An investor opening a new margin account with a broker-dealer purchases 100 shares of XYZ … — FINRA SIE (Securities Industry Essentials)

An investor opening a new margin account with a broker-dealer purchases 100 shares of XYZ stock at $30 per share as their first transaction. Assuming Federal Reserve Board Regulation T is 50%, what is the minimum initial margin deposit required from the investor?

A
$1,500
$2,000Cevap
C
$3,000
D
$750

Cevap

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

Under Federal Reserve Regulation T, the initial margin requirement is 50% of the purchase amount, which equals

1,500 (

3,000 × 50%). However, FINRA Rule 4210 imposes a minimum initial equity requirement of

2,000 for a margin account (or 100% of the purchase amount if the total transaction is less than

2,000). Because

2,000 is greater than the

1,500 Reg T calculation, the customer must deposit $2,000.

Adım Adım Çözüm

Calculate total purchase value

100 \text{ shares} \times \$30 = \$3,000

Determining the total transaction amount is necessary to evaluate margin requirements.

Calculate Regulation T requirement (50%)

0.50 \times \$3,000 = \$1,500

Federal Reserve Regulation T specifies an initial deposit of 50% of the purchase value.

Apply FINRA initial minimum equity requirement

FINRA Rule 4210 requires a minimum deposit of

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

2,000).

Industry rules require whichever amount is greater between Regulation T (50%) and FINRA's $2,000 minimum equity requirement.

Compare requirements to determine final deposit

Since

2,000 exceeds

1,500, the required initial deposit is $2,000.

The investor must satisfy the stricter of the two requirements.

Anahtar Kavram

FINRA Minimum Initial Equity vs. Regulation T Margin Requirements

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