Day traders in the U.S. may no longer need to keep
$25,000 in their accounts after the Financial Industry Regulatory Authority’s
(FINRA) Board of Governors approved amendments to replace the equity
requirement with a margin-based system.
From Equity Minimum to Margin-Based Oversight
The decision marks one of the most significant shifts
in trading rules since the pattern day trading rule was first introduced in
2001.
Under the proposed change, traders would no longer be
bound by a fixed $25,000 balance. Instead, their ability to trade during the
day would depend on existing maintenance margin standards applied to intraday
exposure.
Join buy-side heads of FX in London at fmls25
FINRA said the move follows a retrospective review
that considered input from brokerage firms, industry groups, and investors.
The change aims to reflect what the regulator
described as modern trading practices, where technology and market access have
reshaped how individuals participate. The amendment now awaits review by the
Securities and Exchange Commission (SEC).
Rule Modernization Under FINRA Forward
The day trading change is part of FINRA Forward, an
initiative designed to streamline rules and reduce compliance burdens. At its
September meeting, the Board also advanced four other proposals.
It includes amendments to corporate financing rules to
support capital formation while keeping investor safeguards intact, a revised
framework for outside activities requirements, a higher limit for gifts, and an increase in the cap from $250 to $300.
Additionally, proposed changes to Capital Acquisition
Broker rules allow brokers to represent both buyers and sellers in certain
private placement and M&A deals. The Board is also considering a forthcoming Regulatory
Notice intended to simplify the use of negative consent for bulk transfers of
customer accounts.
Beyond rule changes, the Board reviewed FINRA’s
cybersecurity strategy and developments surrounding the Consolidated Audit
Trail, the national system built to capture all U.S. stock and options
transactions.
More news related to FINRA:
Expect ongoing updates as this story evolves.
Day traders in the U.S. may no longer need to keep
$25,000 in their accounts after the Financial Industry Regulatory Authority’s
(FINRA) Board of Governors approved amendments to replace the equity
requirement with a margin-based system.
From Equity Minimum to Margin-Based Oversight
The decision marks one of the most significant shifts
in trading rules since the pattern day trading rule was first introduced in
2001.
Under the proposed change, traders would no longer be
bound by a fixed $25,000 balance. Instead, their ability to trade during the
day would depend on existing maintenance margin standards applied to intraday
exposure.
Join buy-side heads of FX in London at fmls25
FINRA said the move follows a retrospective review
that considered input from brokerage firms, industry groups, and investors.
The change aims to reflect what the regulator
described as modern trading practices, where technology and market access have
reshaped how individuals participate. The amendment now awaits review by the
Securities and Exchange Commission (SEC).
Rule Modernization Under FINRA Forward
The day trading change is part of FINRA Forward, an
initiative designed to streamline rules and reduce compliance burdens. At its
September meeting, the Board also advanced four other proposals.
It includes amendments to corporate financing rules to
support capital formation while keeping investor safeguards intact, a revised
framework for outside activities requirements, a higher limit for gifts, and an increase in the cap from $250 to $300.
Additionally, proposed changes to Capital Acquisition
Broker rules allow brokers to represent both buyers and sellers in certain
private placement and M&A deals. The Board is also considering a forthcoming Regulatory
Notice intended to simplify the use of negative consent for bulk transfers of
customer accounts.
Beyond rule changes, the Board reviewed FINRA’s
cybersecurity strategy and developments surrounding the Consolidated Audit
Trail, the national system built to capture all U.S. stock and options
transactions.
More news related to FINRA:
Expect ongoing updates as this story evolves.