Daily Record of Required Margin

The daily-margin record is the recordkeeping companion to the substantive FINRA margin requirements. The substantive rule sets the margin floors (initial margin, maintenance margin, day-trading margin, portfolio margin). The recordkeeping companion forces the firm to document that it computed and collected those margins on a daily basis. Without the record, an examiner cannot reconstruct whether the firm was actually meeting its margin obligations on any given day.

What the Daily Record Must Show

Every member firm must prepare and maintain a daily record of the required margin for each margin account. The record must include:

Each field serves a specific compliance purpose:

• Customer name / account number: The record must be account-specific so that an examiner can reconstruct compliance for any individual customer
• Required margin: Forces the firm to compute the obligation explicitly each day, not just monitor in aggregate
• Margin deficiency: Surfaces deficiencies on the record so they cannot be hidden or quietly reversed
• Action taken: Demonstrates that deficiencies were addressed, not just identified

The Daily Cadence

The record is daily, not weekly or monthly. Margin obligations move with market prices, so a position that meets margin today may not meet it tomorrow. The daily record captures the firm's compliance state on each business day.

Exam Tip: Gotchas

• The daily-margin record is a RECORDKEEPING requirement layered on top of the SUBSTANTIVE margin requirements. Failure to maintain the daily margin record is a recordkeeping violation independent of whether the firm actually under-collected margin. Two requirements, two possible violations from the same operational failure.
• The daily record must show ACTION TAKEN to satisfy any deficiency. Recording that a deficiency exists is not enough; the record must show what the firm did about it (call issued, liquidation, deposit). The exam may probe scenarios where the firm noted the deficiency but did not document any cure action.

Purpose: Audit Trail for Margin Compliance

The daily record creates an audit trail for examiners and supervisors to verify the firm computes and collects required margin daily. Without the record, an examiner cannot reconstruct whether the firm under-collected margin on any given day.

Think of it this way: The substantive margin requirements set how much margin is required. The daily-margin record is the procedural proof that the firm computed and collected the right amount. Both are required: a firm that computes margin perfectly but fails to keep the daily record has a recordkeeping violation independent of any substantive violation.

What a Compliant Record Looks Like

A compliant daily-margin record is typically generated automatically by the firm's margin system. It includes:

• An entry per customer margin account
• The day's calculated required margin
• The day's actual customer equity
• Any deficiency
• The firm's documented response to the deficiency (notice issued, liquidation executed, payment received)

The daily margin record falls under the firm's books-and-records retention obligations, with the specific retention period set by the SEC's recordkeeping framework. As a recordkeeping output of a substantive supervisory process, it is preserved per the standard supervisory-records framework.

Exam Tip: Gotchas

• The daily record covers EACH customer margin account, not just an aggregate firm-wide total. A firm that maintains a firm-wide margin summary but no per-account records has a recordkeeping violation. The exam may probe this around scenarios where the firm has aggregate compliance but no account-level documentation.

How the Daily Record Connects to the Margin Framework

The daily-margin record is one of three operational requirements that complete the margin regulatory infrastructure:

A firm with a robust margin operation hits all three: it computes compliant margin, maintains compliant daily records, and processes extensions when warranted. A failure in any of the three creates a separate violation.