Broker Dealer | FINRA Rules

* Time Sensitive Announcement * FINRA Increases Margin Requirements for ETNs

FINRA announced on July 1st that Exchange-Traded Notes (“ETNs”) will be excluded from the reduced margin requirements set forth under Rule 4210(e)(2)(C) available to positions in ordinary investment-grade debt securities, non-equity securities, and “other margin eligible non-equity securities,” as defined by Rule 4210(a)(16).   FINRA has also established higher initial and maintenance margin requirements for ETNs, listed options on ETNs, and leveraged ETNs and their associated uncovered options, given the complex nature and increased risk exposure of these products.

Additionally, FINRA clarified to members that ETNs and options on ETNs are not eligible for Portfolio Margin Treatment provided under Rule 4210(g)(6).  The Options Clearing Corporation will be removing all ETNs (approximately 40) and related options from the Customer Portfolio Margin (“CPM”) theoretical Output File.  See OCC Information Memo #45304.

*  While the changes are not effective until August 16, 2019, member requests for “hardship extensions” must be submitted in writing to FINRA no later than July 26, 2019.   Hardship requests “must include an explanation of the specific circumstances leading to the request” and should be directed to Adam Rodriguez (, or Joe David (

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