Source: https://www.ecfr.gov/cgi-bin/text-idx?mc=true&node=sg17.4.242_1304.sg3&rgn=div7
Timestamp: 2020-02-28 10:12:11
Document Index: 232534880

Matched Legal Cases: ['§242', '§242', '§242', '§242', 'art 220', '§242', '§242', '§242', '§242', '§242', '§242', '§242', '§242', '§240', '§242', '§242', '§242']

Source: 67 FR 53176, Aug. 14, 2002, unless otherwise noted.
§242.400 Customer margin requirements for security futures—authority, purpose, interpretation, and scope.
(a) Authority and purpose. Sections 242.400 through 242.406 and 17 CFR 41.42 through 41.49 (“this Regulation, §§242.400 through 242.406”) are issued by the Securities and Exchange Commission (“Commission”) jointly with the Commodity Futures Trading Commission (“CFTC”), pursuant to authority delegated by the Board of Governors of the Federal Reserve System under section 7(c)(2)(A) of the Securities Exchange Act of 1934 (“Act”) (15 U.S.C. 78g(c)(2)(A)). The principal purpose of this Regulation (§§242.400 through 242.406) is to regulate customer margin collected by brokers, dealers, and members of national securities exchanges, including futures commission merchants required to register as brokers or dealers under section 15(b)(11) of the Act (15 U.S.C. 78o(b)(11)), relating to security futures.
(b) Interpretation. This Regulation (§§242.400 through 242.406) shall be jointly interpreted by the Commission and the CFTC, consistent with the criteria set forth in clauses (i) through (iv) of section 7(c)(2)(B) of the Act (15 U.S.C. 78g(c)(2)(B)) and the provisions of Regulation T (12 CFR part 220).
(c) Scope. (1) This Regulation (§§242.400 through 242.406) does not preclude a self-regulatory authority, under rules that are effective in accordance with section 19(b)(2) of the Act (15 U.S.C. 78s(b)(2)) or section 19(b)(7) of the Act (15 U.S.C. 78s(b)(7)) and, as applicable, section 5c(c) of the Commodity Exchange Act (“CEA”) (7 U.S.C. 7a-2(c)), or a security futures intermediary from imposing additional margin requirements on security futures, including higher initial or maintenance margin levels, consistent with this Regulation (§§242.400 through 242.406), or from taking appropriate action to preserve its financial integrity.
(2) This Regulation (§§242.400 through 242.406) does not apply to:
(4) Provide for disciplinary action, including revocation of such member's registration as a security futures dealer, for such member's failure to comply with this Regulation (§§242.400 through 242.406) or the rules of the exchange or association.
(d) Exemption. The Commission may exempt, either unconditionally or on specified terms and conditions, financial relations involving any security futures intermediary, customer, position, or transaction, or any class of security futures intermediaries, customers, positions, or transactions, from one or more requirements of this Regulation (§§242.400 through 242.406), if the Commission determines that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors. An exemption granted pursuant to this paragraph shall not operate as an exemption from any CFTC rules. Any exemption that may be required from such rules must be obtained separately from the CFTC.
§242.403 Required margin.
(b) Required margin—(1) General rule. The required margin for each long or short position n a security future shall be twenty (20) percent of the current market value of such security future.
§242.404 Type, form and use of margin.
(2) Shares of a money market mutual fund may be accepted as a margin deposit for purposes of this Regulation (§§242.400 through 242.406), provided that:
(iv) Each other security shall be valued at an amount no greater than its current market value reduced by the percentage specified for such security in §240.15c3-1(c)(2)(vi) of this chapter;
(d) Satisfaction restriction. Any transaction, position or deposit that is used to satisfy the required margin for security futures or related positions under this Regulation (§§242.400 through 242.406), including a related position, shall be unavailable to satisfy the required margin for any other position or transaction or any other requirement.
(i) An account that is transferred from one security futures intermediary to another may be treated as if it had been maintained by the transferee from the date of its origin, if the transferee accepts, in good faith, a signed statement of the transferor (or, if that is not practicable, of the customer), that any margin call issued under this Regulation (§§242.400 through 242.406) has been satisfied; and
(ii) An account that is transferred from one customer to another as part of a transaction, not undertaken to avoid the requirements of this Regulation (§§242.400 through 242.406), may be treated as if it had been maintained for the transferee from the date of its origin, if the security futures intermediary accepts in good faith and keeps with the transferee account a signed statement of the transferor describing the circumstances for the transfer.