SIE Key Concepts Ch. 11

Customer Accounts

margin agreement

includes hypothecation (securities as collateral), credit (terms of the loan), and loan consent agreement (optional)

Reg T requirement

requires payment for securities 2 days after settlement aka 3 days after trade

Reg T payment deadline failure

account is frozen for 90 days, transactions are limited to sell orders and purchases that are fully funded before the trade

margin disclosure statement

provided at account opening and annually thereafter, includes warnings that broker dealers can sell assets without contacting you

LEAPS

options that have an expiration date greater than 9 months aka long term anticipation securities

new issues of stock marginability

after 30 days

temporary hold to protect vulnerable investors

up to 15 business days

SIPC

not for profit corporation that protects each separate customer account in the event of broker dealer bankruptcy, covering up to $500,000 total but not more than $250,000 in cash

SIPC valuation date

date of bankruptcy filing made with court