SIE Customer Accounts: Cash vs Margin, Account Registrations, IRAs and RMDs

Account questions on the SIE read like paperwork, but they test a few decisions: what the firm must collect before a customer trades, who is allowed to make the trading decisions, when the customer has to pay, and what a retirement account allows. FINRA's outline lists all of this under 3.2.1 (account types) and 3.2.2 (account registrations), inside the section worth 23 of 75 scored questions.

What FINRA Rule 4512 requires when an account opens

Rule 4512 lists the customer information a firm must maintain. For every account:

• The customer's name and residence, and whether the customer is of legal age
• The associated person or persons responsible for the account (not required for institutional accounts)
• The signature of the partner, officer or manager who accepted the account under the firm's policies
• For a corporation, partnership or other entity, the names of the people authorized to act for it
• For accounts other than institutional accounts, the name and contact information of a trusted contact person age 18 or older. The firm must make reasonable efforts to get one, but Supplementary Material .06 says a missing trusted contact doesn't stop the firm from opening the account

For accounts other than institutional accounts (and other than accounts limited to mutual fund shares the firm didn't recommend), the firm must also make reasonable efforts, before the first transaction settles, to obtain the customer's tax identification or Social Security number, occupation and employer, and whether the customer is associated with another FINRA member firm.

The rule defines an institutional account as one belonging to a bank, savings and loan association, insurance company or registered investment company, a registered investment adviser, or any other person with total assets of at least $50 million.

Two conduct rules sit on top of the paperwork. Rule 2090 (know your customer) requires reasonable diligence to know and retain the essential facts about every customer and about the authority of anyone acting for the customer. Rule 2111 lists the investment profile a firm must gather to make a suitable recommendation: age, other investments, financial situation and needs, tax status, investment objectives, experience, time horizon, liquidity needs and risk tolerance. The identity checks under the customer identification program are a separate anti-money laundering requirement, covered in the SIE anti-money laundering guide.

Cash accounts vs margin accounts

FINRA's brokerage accounts page draws the basic line. In a cash account, you pay for purchases in full. In a margin account, you borrow part of the price from the firm, using the securities as collateral. A margin account is also the only type in which you can sell short.

The margin disclosure statement in Rule 2264 spells out risks the exam likes to test: you can lose more than you deposit, the firm can sell your securities without contacting you, you can't choose which securities are sold to meet a call, and you aren't entitled to an extension of time on a margin call.

Worked example (Passy's numbers). A customer buys $20,000 of stock in a new margin account. Regulation T requires $10,000, so the firm lends $10,000. The stock falls to $12,000. Equity is now $12,000 − $10,000 = $2,000. The 25% maintenance requirement is 25% × $12,000 = $3,000, so the customer faces a maintenance call for $1,000.

Margin questions are mostly this arithmetic in different orders, and step-by-step margin math is planned for full SIE prep. The FINRA brokerage page works through a larger version of the same example if you want a second set of numbers.

The pattern day trader rule is gone: check your study materials

Older SIE study materials teach the "pattern day trader" designation and its $25,000 minimum equity. FINRA's Regulatory Notice 26-10 says those day trading margin requirements have been replaced in their entirety by new intraday margin standards in Rule 4210, effective June 4, 2026. Firms that need more time may phase the change in until October 20, 2027. Under the new standards, firms determine an "intraday margin deficit" for margin accounts and require it to be met promptly. The regular 25% maintenance requirement doesn't change.

Which rule to expect on the exam. FINRA doesn't publish a date on which a rule change enters the SIE question bank. Its Qualification Exam FAQ says it tracks rule changes so that candidates don't receive exam items with outdated information, by writing new items, editing existing ones and removing ones that no longer apply. The 2025 outline lists Rule 4210 but doesn't mention day trading. So for an SIE taken after June 4, 2026, don't learn the $25,000 minimum as a current requirement: it's the old rule. October 20, 2027 is only the end of the phase-in FINRA allows firms for putting the new standards in place, and Notice 26-10 doesn't link it to the exam.

Discretionary accounts and fee-based vs commission accounts

FINRA's brokerage accounts page explains discretion as letting a financial professional or firm make investment decisions for you without your consent for each trade. FINRA Rule 3260 sets the conditions for using it:

1. The customer gives prior written authorization naming the individual or individuals who may exercise discretion
2. The firm accepts the account in writing, through a designated partner, officer or manager
3. A designated person promptly approves each discretionary order in writing, and the firm reviews discretionary accounts at frequent intervals to catch trading that's excessive in size or frequency

The exception that shows up on exams: time and price discretion. If the customer has already chosen the security and a definite amount, Rule 3260's conditions don't apply to letting the representative pick the time or price. That authority lasts only until the end of the business day it was given, unless the customer signs and dates a written instruction saying otherwise. Rule 4512 adds that the firm must keep a dated signature record for each person authorized to exercise discretion in an account.

On costs, FINRA's brokerage page explains that brokerage accounts may charge commissions on transactions, while investment advisory accounts usually charge an ongoing fee, often a percentage of the assets under management. That's the "fee-based vs commission" item on the outline. Options accounts have their own approval steps, set out in the SIE options guide.

Account registrations on the SIE outline

The outline lists individual, joint, corporate and institutional, trust, custodial and partnership registrations, plus retirement accounts.

Educational accounts also appear on the outline. FINRA's college savings page describes Coverdell Education Savings Accounts as trust or custodial accounts with low contribution limits: contributions aren't deductible, earnings grow tax-deferred, and withdrawals for qualified education expenses, including eligible elementary and high school costs, are tax-free. The Products and Their Risks guide covers 529 plans and ABLE accounts as municipal fund securities.

Retirement accounts: types, contributions and RMDs

The IRS lists the main plan types, and FINRA's retirement accounts page says who they generally cover:

FINRA's page adds that a plan the employer both offers and contributes to follows the Employee Retirement Income Security Act (ERISA) and is regulated by the Department of Labor, while IRAs are regulated by the Treasury and the IRS.

Contributions (IRS, 2026). Total contributions to all of a person's traditional and Roth IRAs can't exceed $7,500, or $8,600 for someone age 50 or older, or the person's taxable compensation if that's less. Since 2020 there's no age limit on regular contributions. A traditional IRA deduction may be limited if the person or a spouse is covered by a workplace plan, and Roth contributions may be limited by income. These figures are indexed, so check the IRS page in the year you test.

Withdrawals. The IRS says withdrawals before age 59½ may be subject to an additional 10% tax unless an exception applies. Qualified distributions from a Roth IRA are tax-free.

Required minimum distributions (IRS). RMDs generally start at age 73 for traditional, SEP and SIMPLE IRAs and for retirement plan accounts. The first one can be delayed until April 1 of the following year. Plan participants who are still working can generally delay until they retire, unless they own 5% of the sponsoring business. Roth IRAs and designated Roth accounts have no RMDs while the owner is alive, though beneficiaries are subject to the rules. A missed RMD can trigger a 25% excise tax, reduced to 10% if it's corrected within two years.

Account rules share Section 3 with trading and prohibited activities, and you can practice them among the 194 Trading, Customer Accounts and Prohibited Activities questions planned for launch.

A Passy practice question on margin

This question was written by Passy for practice. It isn't a FINRA item.

A customer buys $40,000 of stock in a new margin account and deposits the Regulation T requirement. The stock falls to $24,000. Using FINRA's 25% maintenance minimum and no house requirement, what happens?

A. No call, because equity is still above $2,000 B. A maintenance call for $2,000 C. A maintenance call for $6,000 D. A Regulation T call for $12,000

Keyed answer: B. The customer deposited 50% ($20,000) and borrowed $20,000. At $24,000, equity is $24,000 − $20,000 = $4,000. The 25% requirement is $6,000, so the shortfall is $2,000. A confuses the $2,000 minimum equity with the maintenance level. C is the full requirement, not the shortfall. D applies Regulation T's 50% to the new value, but Regulation T sets the initial requirement for a purchase, not the ongoing one.

Your next step with SIE account rules

Write out the Rule 4512 list and the cash vs margin table from memory, then try the free SIE practice questions, which mix account questions with the other sections. Put the retirement numbers on cards with the year next to them, because they change each January. When the free SIE study planner lays out your Section 3 time, put these account rules in the first sessions, and use flashcards for limits such as Regulation T's 50%, planned for full SIE prep to keep the numbers fresh.