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Margin Stock

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What is the difference between regular stock and margin stock? What documents are required with margin stock?

Margin stock is a defined term included in the definitions at 12 CFR 221.2. Basically, it is any stock registered on a national securities exchange (like NYSE or AMEX) or any over-the-counter (OTC) stock included in the National Markets System of NASDAQ. For any loan greater than $100,000 secured directly or indirectly by margin stock, the lender must obtain a purpose statement (Form FR U-1). If the form indicates that the purpose of the loan is to purchase or carry margin stock, specific margin requirements of Reg U apply to the loan. Otherwise, the bank's ordinary margin requirements for stock secured loans would apply.

First published on 1/22/07

First published on 01/22/2007

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Filed under lending as: 

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