SIE practice questionmediumMargin Requirements
If a customer's margin account falls below the maintenance margin level, what action is the broker-dealer required to take?
- AAutomatically liquidate all positions
- BIssue a margin call requiring additional funds✓ Correct answer
- CClose the account
- DReport the account to the SEC
Explanation
Why B — Issue a margin call requiring additional funds
If an account drops below the maintenance margin, the firm must issue a margin call. Automatic liquidation or closing the account only happens if the customer fails to meet the call. Reporting to the SEC is not required.
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