FINRA Updates Margin Rule Interpretations

FINRA updated two sets of interpretations to Rule 4210 ("Margin Requirements"). The interpretations address (i) the margin rules applicable to control and restricted securities, and (ii) the consolidation of multiple margin accounts for a single customer.

The interpretations of Rule 4210(e)(8)(B)(i) and (e)(8)(D) generally clarify that specialized provisions relating to control and/or restricted securities are not applicable where such securities are saleable without restriction by the broker-dealer upon a default by the customer. The updates remind firms of the requirement, under Rule 4210(f)(1), to collect "substantial additional margin" for concentrated positions that may not be able to be liquidated promptly.