A customer opening a new margin account executes a first-time transaction by purchasing 80… — FINRA SIE (Securities Industry Essentials)

A customer opening a new margin account executes a first-time transaction by purchasing $80$ shares of a marginable stock at $\$40$ per share. Assuming there are no existing cash or security balances in the account, what is the minimum initial cash deposit required from the customer to satisfy Federal Reserve Regulation T and FINRA margin rules?

$2,000Cevap
B
$1,600
C
$3,200
D
$800

Cevap

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

The total trade value is

3,200 (80 shares ×

40). Regulation T requires 50% of the trade value (

1,600), but FINRA rules specify that a customer opening a margin account must deposit a minimum of

2,000 in equity (or 100% of the purchase price if the purchase is less than

2,000). Because

1,600 is below the

2,000 FINRA minimum threshold, the customer is required to deposit

2,000.

Adım Adım Çözüm

Calculate the total purchase value of the stock transaction.

Total purchase value = 80 shares ×

40 =

3,200.

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

Calculate the Regulation T initial requirement.

Regulation T requirement (50%) = 50% ×

3,200 =

1,600.

Federal Reserve Board Regulation T dictates a standard 50% initial margin for equity purchases.

Compare Regulation T requirement against FINRA minimum initial equity rules.

FINRA requires a minimum initial equity of

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

2,000). Since

1,600 is less than

2,000, the customer must deposit $2,000.

Broker-dealers must enforce whichever requirement is stricter between Reg T and FINRA minimum initial equity.

Anahtar Kavram

Initial Margin and FINRA Minimum Equity Rule

Soru

Cevap

Adım Adım Çözüm

Anahtar Kavram

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