Exchange-Traded Notes

Pursuant to FINRA Rule 4210(f)(8)(A), FINRA is establishing higher strategy based margin requirements for exchange-traded notes (ETNs) and options on ETNs in light of the complex nature of these products. The new requirements for initial and maintenance margin are detailed in the regulatory notice. In addition, FINRA is clarifying that ETNs and options on ETNs are not eligible for portfolio margining under FINRA Rule 4210(g). If these measures would result in undue hardship to a firm or its customers, the firm may submit a written request to FINRA for additional time to comply with this Notice.

FINRA Regulatory Notice 19-21 (July 1, 2019): Margin Requirements for Exchange-Traded Notes


Covered Agency Transactions

The SEC approved an amendment to FINRA Rule 4210 to establish margin requirements for Covered Agency Transactions. Covered Agency Transactions include (1) To Be Announced transactions, inclusive of adjustable rate mortgage transactions, (2) Specified Pool Transactions and (3) transactions in Collateralized Mortgage Obligations, issued in conformity with a program of an agency or Government-Sponsored Enterprise, with forward settlement dates, as discussed more fully in Regulatory Notice 16-31. To assist members in complying with the rule change, FINRA has made available a set of frequently asked questions and guidance. In addition, FINRA is extending, to March 25, 2020, the effective date of the requirements that otherwise would have become effective on June 25, 2018. Members should note that the risk limit determination requirements became effective on December 15, 2016, and are not affected by this Notice.

FINRA Regulatory Notice 19-05 (February 12, 2019): FINRA Extends Effective Date of Margin Requirements for Covered Agency Transactions

• FINRA Regulatory Notice 17-28 (September, 2017):  FINRA Makes Available Frequently Asked Questions and Guidance and Extends Effective Date of Margin Requirements for Covered Agency Transactions

• Responses to Frequently Asked Questions Regarding Covered Agency Transactions Under FINRA Rule 4210 (Updated September 26, 2017) 

FINRA Regulatory Notice 16-31 (August 2016):  SEC Approves Amendments to FINRA Rule 4210 (Margin Requirements) to Establish Margin Requirements for Covered Agency Transactions


FINRA Topic Page:  Margin Accounts and Requirements