FINRA board approves changes to day trading margin rules

The Financial Industry Regulatory Authority's Board of Governors approved amendments to replace current day trading and pattern day trading rules with new intraday margin requirements during its September 17-18 meeting in New York.

The approved changes will eliminate the existing $25,000 minimum equity requirement for pattern day traders and instead apply maintenance margin rules to intraday exposure. FINRA initiated a retrospective review of the rules last fall to assess whether they needed updating for current technological and trading environments.

The amendments incorporate feedback from member firms, industry groups, and investors collected through a regulatory notice. The proposal must receive Securities and Exchange Commission approval before implementation.

The meeting marked the first session for two newly elected industry governors: J. Bradford Eichler, chief operating officer at Stephens Inc., serving as Large Firm Governor, and Erin Baskett, chief executive officer of Sine Qua Non Capital LLC, serving as Small Firm Governor.

The board received updates on FINRA Forward initiatives designed to improve the organization's effectiveness and efficiency. Directors also discussed a forthcoming regulatory notice addressing the use of negative consent for bulk transfer or assignment of customer accounts.

Additional agenda items included updates on the Consolidated Audit Trail, FINRA's cybersecurity program, and reaffirmation of the organization's Financial Guiding Principles.

FINRA CEO Robert Cook reminded member firms that the nomination deadline for Small Firm Advisory Committee and Regional Committee elections is October 6. The next board meeting is scheduled for December.

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