SIE practice questionhardMargin Requirements
A trading firm routinely allows customers to exceed margin limits established in Regulation T for initial purchases and does not issue margin calls. This is likely to result in:
- AOnly customer profits being restricted
- BRegulatory action by the SEC and/or FINRA for violating margin requirements✓ Correct answer
- CNo consequences if clients consent
- DPermitted practice for institutional accounts
Explanation
Why B — Regulatory action by the SEC and/or FINRA for violating margin requirements
Ignoring Regulation T margin requirements is a serious violation subject to regulatory action. Client consent and account type do not exempt firms from these rules.
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