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Topical Terminology > Minimum Maintenance Requirement



1 Definition

Minimum Maintenance Requirement

For Minimum Maintenance Requirement we have a term and definition in Frauds and Scams.



Minimum Maintenance Requirement (Frauds and Scams)

As required by the NYSE, the NASD, and brokerage firms, the amount of equity that must be maintained in brokerage clients' margin accounts. Regulation T of the Federal Reserve Board requires $2,000 in cash or eligible securities to be deposited in margin accounts before brokers can extend credit. Additionally, upon a margin transaction, an initial margin requirement must be met, presently 50% of the market value of eligible securities long or short in customers' accounts. The NYSE and NASD require a margin account's equity to equal at least 25% of the market value of securities in margin accounts. Brokerage firm requirements are usually a more conservative 30%. When the market value of margined securities falls below these minimums, margin calls are issued to clients requesting additional equity to be delivered by a specified date. If customers fail to comply, brokers may sell margined securities or close out short positions (from short sales).




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