Margin Lending Toolkit
Resources to assist bank and non-bank lenders and borrowers for complying with margin lending requirements.
Margin lending is the process of providing or arranging credit for the purpose of transacting in or holding securities. Different sets of margin rules apply depending on whether the party extending credit is a broker-dealer or a bank or other non-broker-dealer lender. In addition, another set of margin rules apply to US borrowers.
For a general introduction to US margin lending rules, see Practice Note, Margin Lending (Introduction) ( www.practicallaw.com/0-504-1694) .
Margin Rules for Banks and Other Non-bank Lenders (Excluding Broker-Dealers)
Non-bank lenders must be particularly aware of filing requirements they may trigger when making margin loans. See Practice Note, Margin Lending Filing Requirements for Non-bank Lenders ( www.practicallaw.com/1-541-6705) .
Margin Rules for Broker-Dealers
Broker-dealers are subject to:
Section 7(c) of the Exchange Act (15 U.S.C. § 78g(c)) (Section 7(c)).
Self-regulatory organization (SRO) Rules, as applicable, including:
NYSE Rule 431; and
Financial Industry Regulatory Authority (FINRA) Rule 4200 (formerly NASD Rule 2370).
Section 11(d) of the Exchange Act (15 U.S.C. § 78k(d)) (for new issues of securities).
If applicable, their own internally-formulated house margin rules, which may impose more stringent margin requirements.