Question about Reg T, but explanation about 3210?

Hi! On 123 | 3Q2WF -

Question is asking what a BD can do if a customer doesn’t pay for a purchase by settlement date, but the explanation is about BDs monitoring their employees’ accounts at other firms. I wasn’t sure if these are actually related and I just haven’t gotten there yet or if maybe it’s a bug.


1 Like

Hi @ohheyley!

Thanks for pointing this out! The explanation definitely doesn’t match the question. We’ll get this fixed ASAP.

1 Like

Here’s the appropriate explanation for that question:

When a security is purchased through a broker-dealer and not paid for by Regulation T settlement (the fourth business day after the trade - T+4), the broker-dealer reserves the right to liquidate (sell) the position to pay for the purchase. Any leftover debit balance (e.g. if the security was sold at a loss) must be resolved by the customer. Additionally, the account would be frozen for 90 days, which prevents buying new securities without the required cash to make the purchase in the account.

1 Like