The purpose of this post is to provide the reader with information relative to recently proposed or adopted rule changes issued by the Financial Industry Regulatory Authority (FINRA), in addition to Guidance Releases relating to the interruptation of these rules. This information is being provided for informational purposes only. Thus, it should not be relied upon as legal advice, Also, the information provided below is subject to withdrawal, revocation and modification by FINRA, which may or may not be reflected on this site. Consequently, the reader should contact a qualified professional concerning the current status of any of the information referenced below.

Recently Filed Proposed Rule Change Relating to FINRA Rule 4210 (Margin Requirements)

Financial Industry Regulatory Authority, Inc. (“FINRA”) has filed with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rule 4210 (Margin Requirements) to: (1) revise the definitions and margin treatment of option spread strategies; (2) clarify the maintenance margin requirement for non-margin eligible equity securities; (3) clarify the maintenance margin requirements for non-equity securities; (4) eliminate the current exemption from the free-riding prohibition for designated accounts; (5) conform the definition of “exempt account”; and (6) eliminate the requirement to stress test portfolio margin accounts in the aggregate. In addition, the proposed rule change would amend FINRA Rule 4210 to make non-substantive technical and stylistic changes.

For anyone that is contemplating trading or is trading on margin, it is important that you consider how, if at all, these proposed changes might effect you.

To review the complete proposal, please follow the highlighted link: