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Report on Margin
Establishing Margin Requirements
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A. Margin regulations (with respect to both equity and derivatives margin) may be established by statute, by regulators, or in the rules of exchanges and/or clearinghouses. Margin requirements also may be set by intermediaries (i.e., broker-dealers). While regulators may specify minimum margin requirements, it is important that brokers, exchanges, and clearinghouses retain the flexibility to require higher margin deposits than required by statute or rule in order to respond to unexpected volatility or to obtain additional credit guarantees.
B. The initial margin level for both equities and derivatives can act to establish or control the amount of leverage on the positions.
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Report on Margin
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