MARGIN

General

Covered Agency Transactions

In June 2016 the SEC approved FINRA’s rule change amending FINRA Rule 4210 to establish margin requirements for Covered Agency Transactions. To assist members in complying with the rule change, FINRA has made available a set of frequently asked questions and guidance. In addition, FINRA is extending, to June 25, 2018, the effective date of the requirements pursuant to the rule change that otherwise would have become effective on December 15, 2017.

• FINRA Regulatory Notice 17-28 (September, 2017):  FINRA Makes Available Frequently Asked Questions and Guidance and Extends Effective Date of Margin Requirements for Covered Agency Transactions

• Responses to Frequently Asked Questions Regarding Covered Agency Transactions Under FINRA Rule 4210 (Updated September 26, 2017) 

 

Covered Agency Transactions

The SEC has approved FINRA’s rule change amending FINRA Rule 4210 to establish margin requirements for Covered Agency Transactions. Covered Agency Transactions include (1) To Be Announced (TBA) transactions, inclusive of adjustable rate mortgage (ARM) transactions, (2) Specified Pool Transactions and (3) transactions in Collateralized Mortgage Obligations (CMOs), issued in conformity with a program of an agency or Government-Sponsored Enterprise (GSE), with forward settlement dates, as discussed more fully in Regulatory Notice 16-31. The rule change becomes effective in two phases: (1) the amendments relating to the risk limit determination requirements became effective on December 15, 2016; and (2) all other amendments pursuant to the rule change go into effect on December 15, 2017.

FINRA Regulatory Notice 16-31 (August 2016):  SEC Approves Amendments to FINRA Rule 4210 (Margin Requirements) to Establish Margin Requirements for Covered Agency Transactions

 

FINRA Topic Page:  Margin Accounts and Requirements