A margin account without enough equity to meet the initial margin requirement that is restricted from any purchases until the requirement is fulfilled.
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A margin account in which the amount of equity is below SEC or brokerage requirements. Such an account is not allowed to buy any more stocks until the level of equity is raised; a portion each sale of stock must be used to pay down the account's debt. Regulation T sets the minimum equity standards, but individual brokerages may set higher standards. In general, however, an account becomes restricted when the market value of the stocks purchased on margin falls below the amount owed on the stocks. A restricted account is sometimes referred to as a blocked account.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
A margin account in which the customer cannot purchase any additional stock on margin without putting up more equity. An account is restricted when its debit balance is greater than the loan value of the securities within the account. Also called blocked account.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.