An investor opening a new margin account executes an initial long purchase of 75 shares of… — FINRA SIE (Securities Industry Essentials)

An investor opening a new margin account executes an initial long purchase of $75$ shares of stock at $\$36$ per share. Under Federal Reserve Regulation T ( $50\%$ ) and FINRA initial margin rules, what is the total minimum dollar cash deposit required from the investor?

Cevap: 2000 $

Cevap

The total minimum dollar cash deposit required is $2,000.

To calculate the required deposit, determine the total trade value: 75 shares ×

36 =

2,700. Regulation T requires 50% of the purchase value (

1,350). However, FINRA Rule 4210 enforces a minimum initial deposit requirement of

2,000 for accounts making long purchases between

2,000 and

4,000. Because the broker-dealer must enforce the higher of the Federal Reserve and SRO requirements, the required deposit is $2,000.

Adım Adım Çözüm

Calculate the total market value of the purchase.

2,700 (75 shares ×

36 per share)

Initial margin rules are evaluated against the total purchase value.

Calculate the Federal Reserve Regulation T requirement.

1,350 (50% of

2,700)

Regulation T mandates a standard 50% margin requirement on eligible securities.

Apply FINRA Rule 4210 initial minimum equity requirements.

$2,000 minimum deposit requirement

FINRA requires an initial minimum equity deposit of

2,000, or 100% of the purchase price if the total transaction value is less than

2,000.

Determine the required deposit by selecting the stricter requirement.

$2,000

The investor must deposit whichever regulatory threshold is greater between Regulation T (

1,350) and FINRA minimum initial equity (

2,000).

Anahtar Kavram

Regulation T and FINRA Rule 4210 Initial Margin Deposit Requirements

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