Regulation T Calls

Regulation T Calls

Federal Reserve Board Regulation T margin calls are issued when a customer makes a transaction in a margin account and does not meet the minimum initial requirement of 50% cash or loan available. This margin call is referred to as a Fed Call. The customer must increase the equity in the account by depositing additional funds and/or marginable securities. If the necessary amount of cash or securities is not deposited into the account within the specified time period, securities may be sold to meet the call, and the account may become restricted.

Regulation T Call

On an initial transaction on a margin account, an order by a brokerage for an account holder to deposit more cash or securities into the account because the value of the cash and securities currently in it is below 50% of the value of the securities purchased on margin. The name comes from Regulation T, a Federal Reserve regulation requiring the initial margin requirement to be at least 50% of the amount borrowed for the account. If the account holder is not able to make the necessary deposit, he/she must close out enough positions in order to make the deposit or risk the account becoming blocked.
Full browser ?