Federal Reserve Regulation T: Credit by Brokers and Dealers

What this video covers

• The Federal Reserve Board's authority under the Securities Exchange Act of 1934 to set initial margin, and why Reg T exists to balance market liquidity against systemic risk
• The 50% initial margin requirement for long equity purchases, and how the customer's equity and margin debt are structured immediately after the trade
• The strict separation between Reg T initial margin (one-time, at purchase) and the Financial Industry Regulatory Authority (FINRA) margin requirements maintenance margin (ongoing, 25% long / 30% short)
• How to calculate the Reg T payment date as settlement plus two business days, and why that equals trade date plus three under the T+1 settlement cycle
• The automatic 90-day cash account freeze, what "frozen" means for future purchases, and the FINRA margin extension procedure for extraordinary circumstances
• Why free riding is exclusively a cash account violation, and what happens when similar behavior occurs in a margin account instead
• The chronological supervisory workflow from account opening through ongoing maintenance, including the Securities and Exchange Commission (SEC) credit disclosure, Reg T, the FINRA margin requirements, daily margin records, and the FINRA margin extension procedure