SIE practice questionhardMargin Requirements
A margin account falls below the maintenance margin. Which of the following is the broker-dealer’s obligation?
- AClose the account immediately
- BSell securities without notification
- CIssue a margin call for the additional required amount✓ Correct answer
- DIncrease the interest rate on the account
Explanation
Why C — Issue a margin call for the additional required amount
The broker-dealer must issue a margin call, allowing the client to bring the account back to maintenance. Automatic liquidation may follow if not met, but immediate sale or closing is not required, nor is raising rates.
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