---
kind: "section"
citation: "17 C.F.R. § 242.406"
title: "17"
number: "242.406"
heading: "Undermargined accounts."
url: "https://uscodex.org/cfr/17/242.406"
---

# §242.406. Undermargined accounts.

- (a) **Failure to satisfy margin call.** If any margin call required by this Regulation ([§§ 242.400 through 242.406](/cfr/17/242.400..242.406.md)) is not met in full, the security futures intermediary shall take the deduction required with respect to an undermargined account in computing its net capital under Commission or CFTC rules.
- (b) **Accounts that liquidate to a deficit.** If at any time there is a liquidating deficit in an account in which security futures are held, the security futures intermediary shall take steps to liquidate positions in the account promptly and in an orderly manner.
- (c) **Liquidation of undermargined accounts not required.** Notwithstanding [Section 402(a)](/cfr/17/402.md?p=a) of this Regulation ([§§ 242.400 through 242.406](/cfr/17/242.400..242.406.md)), [section 220.4(d)](/cfr/17/220.4.md?p=d) of Regulation T ([12 CFR 220.4(d)](/cfr/12/220.4.md?p=d)) respecting liquidation of positions in lieu of deposit shall not apply with respect to security futures carried in a securities account.

## Notes

### Source

Source: 67 FR 53176, Aug. 14, 2002, unless otherwise noted.

### Authority

Authority: 15 U.S.C. 77g, 77q(a), 77s(a), 78b, 78c, 78c-4, 78g(c)(2), 78i(a), 78j, 78k-1(c), 78 l, 78m, 78n, 78 o (b), 78 o (c), 78 o (g), 78q(a), 78q(b), 78q(h), 78w(a), 78dd-1, 78mm, 80a-23, 80a-29, 80a-37, and 8343.

### Source

Source: 62 FR 544, Jan. 3, 1997, unless otherwise noted.