SIE practice questionmediumMargin Requirements
If the equity in a margin account falls below the maintenance requirement, the broker-dealer must:
- AAutomatically liquidate all securities.
- BIssue a margin call to the customer.✓ Correct answer
- CAllow trading to continue without action.
- DReport the account to the SEC.
Explanation
Why B — Issue a margin call to the customer.
If equity in a margin account falls below the maintenance requirement, the broker-dealer issues a margin call to the customer. The firm may liquidate securities if the call is not met, but automatic full liquidation and SEC reporting are not the immediate required action.
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