---
kind: "section"
citation: "15 U.S.C. § 78g"
title: "15"
title_heading: "Commerce and Trade"
number: "78g"
heading: "Margin requirements"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/78g"
units:
  - "Chapter 2B — Securities Exchanges"
---

# §78g. Margin requirements

- (a) **Rules and regulations for extension of credit; standard for initial extension; undermargined accounts—** For the purpose of preventing the excessive use of credit for the [purchase](/usc/15/78c.md?p=a-13) or carrying of [securities](/usc/15/78c.md?p=a-10), the [Board](/usc/15/78c.md?p=a-73) of Governors of the Federal Reserve System shall, prior to October 1, 1934, and from time to time thereafter, prescribe rules and regulations with respect to the amount of credit that may be initially extended and subsequently maintained on any [security](/usc/15/78c.md?p=a-10) (other than an [exempted security](/usc/15/78c.md?p=a-12-A) or a [security futures product](/usc/15/78c.md?p=a-56)). For the initial extension of credit, such rules and regulations shall be based upon the following standard: An amount not greater than whichever is the higher of—
  - (1) 55 per centum of the current market price of the [security](/usc/15/78c.md?p=a-10), or
  - (2) 100 per centum of the lowest market price of the [security](/usc/15/78c.md?p=a-10) during the preceding thirty-six calendar months, but not more than 75 per centum of the current market price.

  Such rules and regulations may make appropriate provision with respect to the carrying of undermargined accounts for limited periods and under specified conditions; the withdrawal of funds or [securities](/usc/15/78c.md?p=a-10); the substitution or additional [purchases](/usc/15/78c.md?p=a-13) of [securities](/usc/15/78c.md?p=a-10); the transfer of accounts from one lender to another; special or different [margin](/usc/15/78c.md?p=a-57-A) requirements for delayed deliveries, short sales, arbitrage transactions, and [securities](/usc/15/78c.md?p=a-10) to which paragraph (2) of this subsection does not apply; the bases and the methods to be used in calculating loans, and [margins](/usc/15/78c.md?p=a-57-A) and market prices; and similar administrative adjustments and details. For the purposes of paragraph (2) of this subsection, until July 1, 1936, the lowest price at which a [security](/usc/15/78c.md?p=a-10) has sold on or after July 1, 1933, shall be considered as the lowest price at which such [security](/usc/15/78c.md?p=a-10) has sold during the preceding thirty-six calendar months.

- (b) **Lower and higher margin requirements—** Notwithstanding the provisions of [subsection (a)](#a) of this section, the [Board](/usc/15/78c.md?p=a-73) of Governors of the Federal Reserve System, may, from time to time, with respect to all or specified [securities](/usc/15/78c.md?p=a-10) or transactions, or classes of [securities](/usc/15/78c.md?p=a-10), or classes of transactions, by such rules and regulations (1) prescribe such lower [margin](/usc/15/78c.md?p=a-57-A) requirements for the initial extension or maintenance of credit as it deems necessary or appropriate for the accommodation of commerce and industry, having due regard to the general credit situation of the country, and (2) prescribe such higher [margin](/usc/15/78c.md?p=a-57-A) requirements for the initial extension or maintenance of credit as it may deem necessary or appropriate to prevent the excessive use of credit to finance transactions in [securities](/usc/15/78c.md?p=a-10).
- (c) **Unlawful credit extension to customers—**
  - (1) **Prohibition—** It shall be unlawful for any [member](/usc/15/78c.md?p=a-3-A) of a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or any [broker or dealer](/usc/15/78c.md?p=h-2), directly or indirectly, to extend or maintain credit or arrange for the extension or maintenance of credit to or for any customer—
    - (A) on any [security](/usc/15/78c.md?p=a-10) (other than an [exempted security](/usc/15/78c.md?p=a-12-A)), except as provided in [paragraph (2)](#c-2), in contravention of the rules and regulations which the [Board](/usc/15/78c.md?p=a-73) of Governors of the Federal Reserve System (hereafter in this section referred to as the “[Board](/usc/15/78c.md?p=a-73)”) shall prescribe under subsections [(a)](#a) and [(b)](#b); or
    - (B) without collateral or on any collateral other than [securities](/usc/15/78c.md?p=a-10), except in accordance with such rules and regulations as the [Board](/usc/15/78c.md?p=a-73) may prescribe—
      - (i) to permit under specified conditions and for a limited period any such [member](/usc/15/78c.md?p=a-3-A), [broker](/usc/15/78c.md?p=a-4-A), or [dealer](/usc/15/78c.md?p=a-5-A) to maintain a credit initially extended in conformity with the rules and regulations of the [Board](/usc/15/78c.md?p=a-73); and
      - (ii) to permit the extension or maintenance of credit in cases where the extension or maintenance of credit is not for the purpose of purchasing or carrying [securities](/usc/15/78c.md?p=a-10) or of evading or circumventing the provisions of [subparagraph (A)](#c-1-A).
  - (2) **Margin regulations—**
    - (A) **Compliance with margin rules required—** It shall be unlawful for any [broker](/usc/15/78c.md?p=a-4-A), [dealer](/usc/15/78c.md?p=a-5-A), or [member](/usc/15/78c.md?p=a-3-A) of a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) to, directly or indirectly, extend or maintain credit to or for, or collect [margin](/usc/15/78c.md?p=a-57-A) from any customer on, any [security futures product](/usc/15/78c.md?p=a-56) unless such activities comply with the regulations—
      - (i) which the [Board](/usc/15/78c.md?p=a-73) shall prescribe pursuant to [subparagraph (B)](#c-2-B); or
      - (ii) if the [Board](/usc/15/78c.md?p=a-73) determines to delegate the authority to prescribe such regulations, which the [Commission](/usc/15/78c.md?p=a-15) and the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) shall jointly prescribe pursuant to [subparagraph (B)](#c-2-B).

      If the [Board](/usc/15/78c.md?p=a-73) delegates the authority to prescribe such regulations under [clause (ii)](#c-2-A-ii) and the [Commission](/usc/15/78c.md?p=a-15) and the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) have not jointly prescribed such regulations within a reasonable period of time after the date of such delegation, the [Board](/usc/15/78c.md?p=a-73) shall prescribe such regulations pursuant to [subparagraph (B)](#c-2-B).

    - (B) **Criteria for issuance of rules—** The [Board](/usc/15/78c.md?p=a-73) shall prescribe, or, if the authority is delegated pursuant to [subparagraph (A)(ii)](#c-2-A-ii), the [Commission](/usc/15/78c.md?p=a-15) and the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) shall jointly prescribe, such regulations to establish [margin](/usc/15/78c.md?p=a-57-A) requirements, including the establishment of levels of [margin](/usc/15/78c.md?p=a-57-A) (initial and maintenance) for [security futures products](/usc/15/78c.md?p=a-56) under such terms, and at such levels, as the [Board](/usc/15/78c.md?p=a-73) deems appropriate, or as the [Commission](/usc/15/78c.md?p=a-15) and the Commodity Futures Trading [Commission](/usc/15/78c.md?p=a-15) jointly deem appropriate—
      - (i) to preserve the financial integrity of markets trading [security futures products](/usc/15/78c.md?p=a-56);
      - (ii) to prevent systemic risk;
      - (iii) to require that—
        - (I) the [margin](/usc/15/78c.md?p=a-57-A) requirements for a [security future](/usc/15/78c.md?p=a-55-A) product be consistent with the [margin](/usc/15/78c.md?p=a-57-A) requirements for comparable option contracts traded on any [exchange](/usc/15/78c.md?p=a-1) registered pursuant to [section 78f(a) of this title](/usc/15/78f.md?p=a); and
        - (II) initial and maintenance [margin levels](/usc/15/78c.md?p=a-57-B) for a [security future](/usc/15/78c.md?p=a-55-A) product not be lower than the lowest [level of margin](/usc/15/78c.md?p=a-57-B), exclusive of premium, required for any comparable option contract traded on any [exchange](/usc/15/78c.md?p=a-1) registered pursuant to [section 78f(a) of this title](/usc/15/78f.md?p=a), other than an option on a [security future](/usc/15/78c.md?p=a-55-A);

      except that nothing in this subparagraph shall be construed to prevent a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or national [securities](/usc/15/78c.md?p=a-10) association from requiring [higher margin levels](/usc/15/78c.md?p=a-57-C) for a [security future](/usc/15/78c.md?p=a-55-A) product when it deems such action to be necessary or appropriate; and

      - (iv) to ensure that the [margin](/usc/15/78c.md?p=a-57-A) requirements (other than levels of [margin](/usc/15/78c.md?p=a-57-A)), including the type, form, and use of collateral for [security futures products](/usc/15/78c.md?p=a-56), are and remain consistent with the requirements established by the [Board](/usc/15/78c.md?p=a-73), pursuant to subparagraphs [(A)](#c-1-A) and [(B)](#c-1-B) of paragraph (1).
  - (3) **Exception—** This subsection and the rules and regulations issued under this subsection shall not apply to any credit extended, maintained, or arranged by a [member](/usc/15/78c.md?p=a-3-A) of a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or a [broker or dealer](/usc/15/78c.md?p=h-2) to or for a [member](/usc/15/78c.md?p=a-3-A) of a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or a [registered broker or dealer](/usc/15/78c.md?p=a-48)—
    - (A) a substantial portion of whose business consists of transactions with [persons](/usc/15/78c.md?p=a-9) other than [brokers](/usc/15/78c.md?p=a-4-A) or [dealers](/usc/15/78c.md?p=a-5-A); or
    - (B) to finance its activities as a [market maker](/usc/15/78c.md?p=a-38) or an [underwriter](/usc/15/78c.md?p=a-20);

    except that the [Board](/usc/15/78c.md?p=a-73) may impose such rules and regulations, in whole or in part, on any credit otherwise exempted by this paragraph if the [Board](/usc/15/78c.md?p=a-73) determines that such action is necessary or appropriate in the public interest or for the protection of investors.

- (d) **Unlawful credit extension in violation of rules and regulations; exceptions to application of rules, etc.**
  - (1) **Prohibition—** It shall be unlawful for any [person](/usc/15/78c.md?p=a-9) not subject to [subsection (c)](#c) to extend or maintain credit or to arrange for the extension or maintenance of credit for the purpose of purchasing or carrying any [security](/usc/15/78c.md?p=a-10), in contravention of such rules and regulations as the [Board](/usc/15/78c.md?p=a-73) shall prescribe to prevent the excessive use of credit for the purchasing or carrying of or trading in [securities](/usc/15/78c.md?p=a-10) in circumvention of the other provisions of this section. Such rules and regulations may impose upon all loans made for the purpose of purchasing or carrying [securities](/usc/15/78c.md?p=a-10) limitations similar to those imposed upon [members](/usc/15/78c.md?p=a-3-A), [brokers](/usc/15/78c.md?p=a-4-A), or [dealers](/usc/15/78c.md?p=a-5-A) by [subsection (c)](#c) and the rules and regulations thereunder.
  - (2) **Exceptions—** This subsection and the rules and regulations issued under this subsection shall not apply to any credit extended, maintained, or arranged—
    - (A) by a [person](/usc/15/78c.md?p=a-9) not in the ordinary course of business;
    - (B) on an [exempted security](/usc/15/78c.md?p=a-12-A);
    - (C) to or for a [member](/usc/15/78c.md?p=a-3-A) of a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or a [registered broker or dealer](/usc/15/78c.md?p=a-48)—
      - (i) a substantial portion of whose business consists of transactions with [persons](/usc/15/78c.md?p=a-9) other than [brokers](/usc/15/78c.md?p=a-4-A) or [dealers](/usc/15/78c.md?p=a-5-A); or
      - (ii) to finance its activities as a [market maker](/usc/15/78c.md?p=a-38) or an [underwriter](/usc/15/78c.md?p=a-20);
    - (D) by a [bank](/usc/15/78c.md?p=a-6) on a [security](/usc/15/78c.md?p=a-10) other than an [equity security](/usc/15/78c.md?p=a-11); or
    - (E) as the [Board](/usc/15/78c.md?p=a-73) shall, by such rules, regulations, or orders as it may deem necessary or appropriate in the public interest or for the protection of investors, exempt, either unconditionally or upon specified terms and conditions or for stated periods, from the operation of this subsection and the rules and regulations thereunder.
  - (3) **Board authority—** The [Board](/usc/15/78c.md?p=a-73) may impose such rules and regulations, in whole or in part, on any credit otherwise exempted by subparagraph (C) if it determines that such action is necessary or appropriate in the public interest or for the protection of investors.
- (e) **Effective date of this section and rules and regulations—** The provisions of this section or the rules and regulations thereunder shall not apply on or before July 1, 1937, to any loan or extension of credit made prior to June 6, 1934, or to the maintenance, renewal, or extension of any such loan or credit, except to the extent that the [Board](/usc/15/78c.md?p=a-73) of Governors of the Federal Reserve System may by rules and regulations prescribe as necessary to prevent the circumvention of the provisions of this section or the rules and regulations thereunder by means of withdrawals of funds or [securities](/usc/15/78c.md?p=a-10), substitutions of [securities](/usc/15/78c.md?p=a-10), or additional [purchases](/usc/15/78c.md?p=a-13) or by any other [device](/usc/15/55.md?p=d).
- (f) **Unlawful receipt of credit; exemptions—**
  - (1) It is unlawful for any United States [person](/usc/15/78c.md?p=a-9), or any foreign [person](/usc/15/78c.md?p=a-9) controlled by a United States [person](/usc/15/78c.md?p=a-9) or acting on behalf of or in conjunction with such [person](/usc/15/78c.md?p=a-9), to obtain, receive, or enjoy the beneficial use of a loan or other extension of credit from any lender (without regard to whether the lender’s office or place of business is in a [State](/usc/15/78c.md?p=a-16) or the transaction occurred in whole or in part within a [State](/usc/15/78c.md?p=a-16)) for the purpose of (A) purchasing or carrying United States [securities](/usc/15/78c.md?p=a-10), or (B) purchasing or carrying within the United States of any other [securities](/usc/15/78c.md?p=a-10), if, under this section or rules and regulations prescribed thereunder, the loan or other credit transaction is prohibited or would be prohibited if it had been made or the transaction had otherwise occurred in a lender’s office or other place of business in a [State](/usc/15/78c.md?p=a-16).
  - (2) For the purposes of this subsection—
    - (A) The term “United States [person](/usc/15/78c.md?p=a-9)” includes a [person](/usc/15/78c.md?p=a-9) which is organized or exists under the laws of any [State](/usc/15/78c.md?p=a-16) or, in the case of a natural [person](/usc/15/78c.md?p=a-9), a citizen or resident of the United States; a domestic estate; or a trust in which one or more of the foregoing [persons](/usc/15/78c.md?p=a-9) has a cumulative direct or indirect beneficial interest in excess of 50 per centum of the value of the trust.
    - (B) The term “United States [security](/usc/15/78c.md?p=a-10)” means a [security](/usc/15/78c.md?p=a-10) (other than an [exempted security](/usc/15/78c.md?p=a-12-A)) issued by a [person](/usc/15/78c.md?p=a-9) incorporated under the laws of any [State](/usc/15/78c.md?p=a-16), or whose principal place of business is within a [State](/usc/15/78c.md?p=a-16).
    - (C) The term “foreign [person](/usc/15/78c.md?p=a-9) controlled by a United States [person](/usc/15/78c.md?p=a-9)” includes any noncorporate entity in which United States [persons](/usc/15/78c.md?p=a-9) directly or indirectly have more than a 50 per centum beneficial interest, and any corporation in which one or more United States [persons](/usc/15/78c.md?p=a-9), directly or indirectly, own stock possessing more than 50 per centum of the total combined voting power of all classes of stock entitled to vote, or more than 50 per centum of the total value of shares of all classes of stock.
  - (3) The [Board](/usc/15/78c.md?p=a-73) of Governors of the Federal Reserve System may, in its discretion and with due regard for the purposes of this section, by rule or regulation exempt any class of United States [persons](/usc/15/78c.md?p=a-9) or foreign [persons](/usc/15/78c.md?p=a-9) controlled by a United States [person](/usc/15/78c.md?p=a-9) from the application of this subsection.
- (g) **Effect of bona fide agreement for delayed delivery of mortgage related security—** Subject to such rules and regulations as the [Board](/usc/15/78c.md?p=a-73) of Governors of the Federal Reserve System may adopt in the public interest and for the protection of investors, no [member](/usc/15/78c.md?p=a-3-A) of a national [securities](/usc/15/78c.md?p=a-10) [exchange](/usc/15/78c.md?p=a-1) or [broker or dealer](/usc/15/78c.md?p=h-2) shall be deemed to have extended or maintained credit or arranged for the extension or maintenance of credit for the purpose of purchasing a [security](/usc/15/78c.md?p=a-10), within the meaning of this section, by reason of a bona fide [agreement](/usc/15/7a.md?p=2) for delayed delivery of a [mortgage related security](/usc/15/78c.md?p=a-41) or a [small business related security](/usc/15/78c.md?p=a-53-A) against full payment of the [purchase](/usc/15/78c.md?p=a-13) price thereof upon such delivery within one hundred and eighty days after the [purchase](/usc/15/78c.md?p=a-13), or within such shorter period as the [Board](/usc/15/78c.md?p=a-73) of Governors of the Federal Reserve System may prescribe by rule or regulation.

## Source credit

(June 6, 1934, ch. 404, title I, § 7, 48 Stat. 886; Aug. 23, 1935, ch. 614, § 203(a), 49 Stat. 704; Pub. L. 90–437, July 29, 1968, 82 Stat. 452; Pub. L. 91–508, title III, § 301(a), Oct. 26, 1970, 84 Stat. 1124; Pub. L. 98–440, title I, § 102, Oct. 3, 1984, 98 Stat. 1690; Pub. L. 103–325, title II, § 203, Sept. 23, 1994, 108 Stat. 2199; Pub. L. 104–290, title I, § 104(a), Oct. 11, 1996, 110 Stat. 3422; Pub. L. 105–353, title III, § 301(b)(5), (6), Nov. 3, 1998, 112 Stat. 3236; Pub. L. 106–554, § 1(a)(5) [title II, § 206(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–429; Pub. L. 111–203, title IX, § 929, July 21, 2010, 124 Stat. 1852.)

## Notes

### Editorial Notes

### Amendments

2010—Subsec. (c)(1)(A). Pub. L. 111–203 substituted “; or” for “; and” at end.

2000—Subsec. (a). Pub. L. 106–554, § 1(a)(5) [title II, § 206(b)(1)], inserted “or a security futures product” after “exempted security” in introductory provisions.

Subsec. (c)(1)(A). Pub. L. 106–554, § 1(a)(5) [title II, § 206(b)(2)], inserted “except as provided in paragraph (2),” after “security),”.

Subsec. (c)(2), (3). Pub. L. 106–554, § 1(a)(5) [title II, § 206(b)(3), (4)], added par. (2) and redesignated former par. (2) as (3).

1998—Subsecs. (a), (b). Pub. L. 105–353, § 301(b)(5), substituted “Board of Governors of the Federal Reserve System” for “Federal Reserve Board”.

Subsec. (d). Pub. L. 105–353, § 301(b)(6), substituted “exceptions” for “exception” in heading.

1996—Subsec. (c). Pub. L. 104–290, § 104(a)(1), amended heading and text of subsec. (c) generally. Prior to amendment, text read as follows: “It shall be unlawful for any member of a national securities exchange or any broker or dealer, directly or indirectly, to extend or maintain credit or arrange for the extension or maintenance of credit to or for any customer—

“(1) on any security (other than an exempted security), in contravention of the rules and regulations which the Board of Governors of the Federal Reserve System shall prescribe under subsections (a) and (b) of this section;

“(2) without collateral or on any collateral other than securities, except in accordance with such rules and regulations as the Board of Governors of the Federal Reserve System may prescribe (A) to permit under specified conditions and for a limited period any such member, broker, or dealer to maintain a credit initially extended in conformity with the rules and regulations of the Board of Governors of the Federal Reserve System, and (B) to permit the extension or maintenance of credit in cases where the extension or maintenance of credit is not for the purpose of purchasing or carrying securities or of evading or circumventing the provisions of paragraph (1) of this subsection.”

Subsec. (d). Pub. L. 104–290, § 104(a)(2), amended heading and text of subsec. (d) generally. Prior to amendment, text read as follows: “It shall be unlawful for any person not subject to subsection (c) of this section to extend or maintain credit or to arrange for the extension or maintenance of credit for the purpose of purchasing or carrying any security, in contravention of such rules and regulations as the Board of Governors of the Federal Reserve System shall prescribe to prevent the excessive use of credit for the purchasing or carrying of or trading in securities in circumvention of the other provisions of this section. Such rules and regulations may impose upon all loans made for the purpose of purchasing or carrying securities limitations similar to those imposed upon members, brokers, or dealers by subsection (c) of this section and the rules and regulations thereunder. This subsection and the rules and regulations thereunder shall not apply (A) to a loan made by a person not in the ordinary course of his business, (B) to a loan on an exempted security, (C) to a loan to a dealer to aid in the financing of the distribution of securities to customers not through the medium of a national securities exchange, (D) to a loan by a bank on a security other than an equity security, or (E) to such other loans as the Board of Governors of the Federal Reserve System shall, by such rules and regulations as it may deem necessary or appropriate in the public interest or for the protection of investors, exempt, either unconditionally or upon specified terms and conditions or for stated periods, from the operation of this subsection and the rules and regulations thereunder.”

1994—Subsec. (g). Pub. L. 103–325 inserted “or a small business related security” after “mortgage related security”.

1984—Subsec. (g). Pub. L. 98–440 added subsec. (g).

1970—Subsec. (f). Pub. L. 91–508 added subsec. (f).

1968—Subsec. (a). Pub. L. 90–437, § 1(1), struck out “registered on a national securities exchange” after “(other than an exempted security)”.

Subsec. (c). Pub. L. 90–437, § 1(2), struck out “who transacts a business in securities through the medium of any such member” after “any broker or dealer”, in par. (1) struck out “registered on a national securities exchange” after “(other than an exempted security)”, and in par. (2) substituted “other than securities” for “other than exempted securities and/or securities registered upon a national securities exchange”.

Subsec. (d). Pub. L. 90–437, § 1(3), struck out “registered on a national securities exchange” after “the purpose of purchasing or carrying any security”, and “registered on national securities exchanges” after “the purpose of purchasing or carrying securities”.

### Statutory Notes and Related Subsidiaries

### Change of Name

Act Aug. 23, 1935, in subsec. (e), substituted “Board of Governors of the Federal Reserve System” for “Federal Reserve Board”.

### Effective Date of 2010 Amendment

Amendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking.

### Effective Date of 1970 Amendment

Amendment by Pub. L. 91–508 effective on first day of seventh calendar month which begins after Oct. 26, 1970, except as otherwise provided in section 401(c) of Pub. L. 91–508, see section 401(a) of Pub. L. 91–508, set out as a note under section 1951 of Title 12, Banks and Banking.

Pub. L. 91–508, title IV, § 401(c), Oct. 26, 1970, 84 Stat. 1125, provided that: “The Board of Governors of the Federal Reserve System may by regulation provide that the amendment made by title III [amending this section] shall be effective on any date not earlier than the publication of the regulation in the Federal Register and not later than the first day of the thirteenth calendar month which begins after the date of enactment [Oct. 26, 1970].”

### Validity of Rules and Regulations

Pub. L. 91–508, title III, § 301(b), Oct. 26, 1970, 84 Stat. 1125, provided that: “The amendment made by subsection (a) of this section [amending this section] does not affect the continuing validity of any rule or regulation under section 7 of the Securities Exchange Act of 1934 [this section] in effect prior to the effective date of the amendment.”