Series 24: 3.7.10.1. Regulation U

3.7.10.1.  Regulation U

Regulation U was adopted in 1936 “to impose credit restrictions upon persons other than brokers or dealers” that lend to buyers and sellers of margin securities, primarily banks. Banks and other lenders are forbidden from extending more credit than the “maximum loan value” for margin securities, which Regulation U identifies as 50% of the stock’s current market value.