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Reg U on Brokerage Accounts

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Is it necessary to have a Reg U form executed on brokerage accounts and also for loans that are secured with closely held stock?

Reg U requires that whenever a bank extends credit secured directly or indirectly by any margin stock, in an amount exceeding $100,000, the bank shall require its customer to execute Form FR U-1. Security in a brokerage account that contains marginable securities would qualify. Closely held stock is not marginable and therefore a Form FR U-1 would not be required.

First published on 1/16/06

First published on 01/16/2006

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