margin requirements for pattern day traders, the proposed rules would also require a pattern day trader that makes a deposit to satisfy a margin deficiency, to keep the deposit in the account for at least two business days. Further, a pattern day trader would be prohibited from using cross guarantees to satisfy a margin requirement. Together, these requirements are designed to provide greater financial stability to pattern day trader accounts and effectively require pattern day traders to utilize funds actually on deposit in their accounts. 2. Lending in Excess of Margin Requirements A broker-dealer violates Regulation T and SRO maintenance rules when the broker-dealer, directly or indirectly, extends credit in excess of the requirements set forth in the rules. Broker-dealers that extend credit beyond the 50% Regulation T or 25% SRO margin obligations are, in effect, meeting the margin obligations of the customer. For example, in a typical transaction, a customer who purchases securities in his/her margin account at a cost of $10,000 would be required to deposit 50%, or $5,000, of the transaction cost. The broker-dealer lends the customer the remaining 50%, or $5,000, using the securities as collateral. If the customer is unable to meet his/her 50% obligation, the broker-dealer is required to issue a Regulation T margin call. Contrary to the rule, examinations revealed that several day-trading broker-dealers loaned funds to customers to meet their margin obligations -- in addition to and separate from credit extended for initial margin. As a result, the customer was left with