FINRA Replaces Day-Trader Rules with Intraday Margin System

The US Financial Industry Regulatory Authority (FINRA) has adopted significant amendments to Rule 4210, its margin requirements for day trading. The new rules eliminate the long-standing 'pattern day trader' designation and its associated requirements, such as the $25,000 minimum account equity. Instead, the framework now requires broker-dealers to monitor each customer account’s 'intraday margin level' and any 'intraday margin deficit' that occurs. Sophisticated counsel and their broker-dealer clients care because this represents a fundamental shift to a risk-calibrated approach that requires updated compliance systems and procedures. Firms can comply by monitoring accounts in real time or by performing end-of-day calculations. If a customer fails to meet a margin deficit within five business days, the broker-dealer must enforce a 90-day trading restriction. While FINRA says the change modernizes the rules and offers more flexibility, it imposes new operational burdens on firms. Members have an 18-month phase-in period, until October 2027, to implement the necessary system and policy changes.