Reading and Understanding Your Margin Agreement – South and Central Florida FINRA Arbitration Attorney

Read Your Margin Agreement:

As with any type of business transaction that you are contemplating, it is important for you to read and understand fully all of the terms and conditions of any type of margin or, for that matter, loan agreement which you are considering. The explanation of the account executive of the terms, risks and rewards of what is contained in the margin agreement is superseded by the document itself. Moreover, the agreement will refer the reader to other rules and regulations that are incorporate, by reference, into the document. These rules and regulations are of equal force with the terms of the margin agreement.

It is for these reasons that a customer is required to sign the margin agreement to open a margin account. The agreement may be part of your account opening agreement or may be a separate agreement. The margin agreement states that you must abide by the rules of the Federal Reserve Board, the New York Stock Exchange, the National Association of Securities Dealers, Inc., and the firm where you have set up your margin account.

As with most loans, the margin agreement explains the terms and conditions of the margin account. The agreement describes how the interest on the loan is calculated, how you are responsible for repaying the loan, and how the securities you purchase serve as collateral for the loan. Carefully review the agreement to determine what notice, if any, your firm must give you before selling your securities to collect the money you have borrowed.

Please keep in mind that this information is being provided for educational purposes. It is not designed to be complete in all material respects. If you have any questions relative to the contents of this post you should contact a qualified professional.

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At the Boca Raton Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage, precious metal firms and other types of business activities.