FINRA Advances Proposal to Replace $25K Minimum for Day Traders with Margin Standards
Day traders in the U.S. may no longer need to keep $25,000 in their accounts after the Financial Industry Regulatory Authority’s (FINRA) Board of Governors approved amendments to replace the equity requirement with a margin-based system.
From Equity Minimum to Margin-Based Oversight
The decision marks one of the most significant shifts in trading rules since the pattern day trading rule was first introduced in 2001.
Under the proposed change, traders would no longer be bound by a fixed $25,000 balance. Instead, their ability to trade during the day would depend on existing maintenance margin standards applied to intraday exposure.
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FINRA announced that the move follows a retrospective review that considered input from brokerage firms, industry groups, and investors.
The change aims to reflect what the regulator described as modern trading practices, where technology and market access have reshaped how individuals participate. The amendment now awaits review by the Securities and Exchange Commission (SEC).
Commenting on the move, Anthony Denier, the CEO of trading platform Webull Financial, said: “This rule was created at a time when retail investors' access to information, pricing, and news was greatly disadvantaged. Times have changed, and the rule needs to be changed as well by removing the minimum dollar amount requirement.”
Rule Modernization Under FINRA Forward
The day trading change is part of FINRA Forward, an initiative designed to streamline rules and reduce compliance burdens. At its September meeting, the Board also advanced four other proposals.
It includes amendments to corporate financing rules to support capital formation while keeping investor safeguards intact, a revised framework for outside activities requirements, a higher limit for gifts, and an increase in the cap from $250 to $300.
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Additionally, proposed changes to Capital Acquisition Broker rules allow brokers to represent both buyers and sellers in certain private placement and M&A deals. The Board is also considering a forthcoming Regulatory Notice intended to simplify the use of negative consent for bulk transfers of customer accounts.
Beyond rule changes, the Board reviewed FINRA’s cybersecurity strategy and developments surrounding the Consolidated Audit Trail, the national system built to capture all U.S. stock and options transactions.
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