Regulation T - Reg T

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What is 'Regulation T - Reg T'

The Federal Reserve Board regulation that governs customer cash accounts and the amount of credit that brokerage firms and dealers may extend to customers for the purchase of securities.

BREAKING DOWN 'Regulation T - Reg T'

According to Regulation T, you may borrow up to 50% of the purchase price of securities that can be purchased on margin. This is known as the initial margin.

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RELATED FAQS
  1. How is buying on margin regulated by the Securities and Exchange Commission (SEC)?

    Learn how FINRA and the Federal Reserve regulate margin account trading, and understand how pattern day trading can impact ... Read Answer >>
  2. How are margin calls regulated by the SEC?

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  3. How does a broker decide which customers are eligible to open a margin account?

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