Treatment of Non-Margin Eligible Equity Securities

FINRA RN 11-16

April 7, 2011

FINRA published a regulatory notice to clarify the margin treatment for non-margin eligible equities under Regulation T. Pursuant to authority under FINRA Rule 4210(f)(8)(A)(ii), FINRA stated that maintenance margin for such securities held long in a Reg. T margin account shall be 100% of current market value. For short positions the requirements of RN 09-53 continue to apply for Reg. T accounts, but portfolio margin accounts will be subject to new specified requirements. In addition, the notice clarifies the treatment of non-margin eligible equities with respect to (i) non-purpose loans in good faith accounts and (ii) day trading.

Please contact any of the following Cadwalader attorneys if you have any questions about this item:

Steven Lofchie; [email protected] Jeffrey Robins; [email protected] Maurine Bartlett; [email protected]

Cross References

FINRA Rule 4210

Regulation T

FINRA RN 09-53