Regulation T (Reg T)

What Is Regulation T?

Federal Reserve Regulation T governs credit extended by broker-dealers. For a standard margin-eligible equity purchase, initial margin is generally 50%; firms and particular securities can require more.

Margin Example

A $10,000 eligible stock purchase with 50% initial margin requires $5,000 customer equity and permits a $5,000 broker loan, before costs. Equity equals market value minus the debit balance.

Reg T initial margin differs from FINRA maintenance margin. The general long-equity maintenance minimum is 25%; short positions and other products have different requirements. House requirements may be higher.

Cash Accounts and Freeriding

Standard settlement for most covered securities is T+1, but settlement and Regulation T's payment period are distinct concepts. Brokers may require funds earlier than the regulatory outside deadline. Follow the broker's payment deadline.

A customer must pay for a purchase independently of selling that same unpaid security. Buying and selling on the same day is not inherently freeriding if the purchase was fully funded. A Regulation T 90-day freeze removes the privilege of delayed payment and requires qualifying funds before purchases; it does not automatically close the account or ban all trading.

Intraday Margin

FINRA's new intraday margin standards took effect June 4, 2026. Firms may retain the older PDT regime during the transition ending October 20, 2027. The former $25,000 minimum must not be presented as universally current after firm adoption.

Margin Eligibility

Exchange-traded status does not make every product marginable. New distributions, many low-priced or OTC securities and ordinary short-dated option purchases may require full payment. Long-dated listed options have specific margin rules; check the product and firm requirements.

Sources: Reg T cash accounts and FINRA intraday notice.