Withdrawals and Tenders

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Chapters in this video

  1. 0:00 Withdrawals, tenders, and compliance rules
  2. 1:19 Free credit balances and notifications
  3. 2:20 Fully paid and unpledged securities
  4. 3:29 Margin withdrawal equity floor
  5. 4:23 Tender authorization and short tendering
  6. 5:57 Net long tendering capacity
  7. 7:02 Rapid-fire exam recap

What this video covers

  • Why free credit balances must be available for withdrawal at any time, with no firm delay, and why firms send a notification at least quarterly
  • The two requirements for withdrawing securities: they must be fully paid and unpledged, with hypothecation meaning the securities are pledged as collateral for a margin loan
  • Why a margin debit balance does not have to be paid down to zero before pledged securities can be released
  • How to apply the Regulation T (Reg T) and post-withdrawal equity test using the greater of $2,000 or the applicable maintenance-margin requirement
  • Why the firm must promptly notify the customer about a tender offer, while only the customer can decide whether to tender
  • Why short tendering is prohibited under Securities and Exchange Commission (SEC) rules
  • How to calculate tendering capacity as the customer's net long position across all accounts, including the 700 long minus 300 short example

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