Amendment to FINRA Margin Requirements and Introduction of Intraday Margin Standards
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The new rule replaces outdated day trading margin provisions with modern intraday margin standards, removing the $25,000 minimum equity requirement for pattern day traders. It aims to reduce compliance costs for financial firms and make market participation easier for investors by allowing flexibility in monitoring and computing margin deficits.
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Key Changes
- Replaces day trading margin provisions with intraday margin standards
- Removes the $25,000 minimum equity requirement for pattern day traders
- Allows firms flexibility in monitoring and computing intraday margin deficits
Obligations
What this law requires
Members must determine the intraday margin deficit for each margin account daily, considering any IML-reducing transactions.
FINRA members must determine the intraday margin deficit for each margin account of a customer on a daily basis.
If a margin account has an intraday margin deficit, members must satisfy the deficit as promptly as possible, either through customer deposits or liquidation of positions.
If an intraday margin deficit occurs, members must require the deficit to be satisfied as promptly as possible through account deposits or position liquidations.
If an intraday margin deficit is not satisfied within five business days, the member must deduct the deficit from its net capital computations for up to ten business days.