Required Maintenance Call (RM)
Cause: FINRA minimum maintenance requirements exceed an account’s margin equity.
Due: Generally, Trade Date + 3 business days (T + 3), however, in the case of low margin equity or excessive risk the length of time given to meet the call can be reduced or the call can even be due immediately.
Meeting an RM Call: RM calls may be met by a deposit of funds in the amount of the call, market appreciation, liquidation of non-marginable securities in the amount of the call, liquidation of marginable securities that generate sufficient margin release, or by a deposit of fully paid for marginable securities. RM calls may be met by a combination of these methods.
Please be aware that RM calls are issued cumulatively.
Below is an example of how this policy affects RM calls:
As of Monday’s close an account’s margin equity was below maintenance requirements by $1,000. The call would be issued Tuesday morning which would be due Thursday (T+3) and go past due on Friday.
If the market moved against them further on Tuesday by an additional $2,000, this amount will be added to the amount of the original call, which changes the amount that is due on Thursday from $1,000 to $3,000. We will issue a call for $3,000 using the original trade date and due date.
If the market moved against them again on Wednesday by another $2,000, the amount of the call due on Thursday will change from $3,000 to $5,000 and will be considered to be past due on Friday if the client does not either liquidate positions to cover the call or make a deposit.
If the market moved against them again on Thursday by another $3,000, a call for $8,000 will be issued on Friday, with a due day of Thursday, meaning this amount will already be past due.
Friday morning we would liquidate to cover the $8,000 past due call, plus any further market depreciation that day.
This account will receive three calls, each with the original trade date – and all with the same due date.
|Day||Issue Date||Margin Equity||Maintenance Requirement||Call Amount||Due Date|
Once any maintenance call goes past due, all maintenance calls, regardless of due date, are past due as well.
This policy does not affect accounts with low margin equity (< 20%). Maintenance calls will still be due T+1.
Note: Please be aware that ACH and check deposits do not meet margin calls until the funds become available for trading. ACH deposits and check deposits become available for trading on the 3rd business day after being received.