SEC scraps $25k day‑trader rule

The Securities and Exchange Commission approved a rule change on April 14 that removes the $25,000 minimum-account threshold for frequent day traders in margin accounts. (sec.gov) The old setup came from Financial Industry Regulatory Authority Rule 4210 and treated a customer as a “pattern day trader” after repeated same-day stock trades in a five-business-day window. That label carried a $25,000 minimum equity requirement and special buying-power limits. (federalregister.gov) The new rule deletes the “pattern day trader” designation and replaces the old day-trading margin framework with what regulators call an intraday margin standard. In plain terms, brokers can tie margin requirements to the size and risk of a customer’s positions during the trading day instead of using one flat account minimum. (sec.gov) Financial Industry Regulatory Authority filed the overhaul with the Securities and Exchange Commission on December 29, 2025, and the proposal was published for comment on January 14, 2026. The Securities and Exchange Commission said the comment period closed on February 4, 2026, before the agency extended its decision deadline to April 14. (sec.gov) (federalregister.gov) (govinfo.gov) The change rewrites a rule built in the aftermath of the dot-com era. Financial Industry Regulatory Authority said the original day-trading restrictions were adopted “to address customer trading problems arising at the turn of the century.” (federalregister.gov) Retail brokers had pushed for the threshold to go. Bloomberg reported that the April 14 approval was cheered by retail brokerages, which have argued that the old rule blocked smaller customers from active trading in margin accounts. (bloomberg.com) Financial Industry Regulatory Authority framed the rewrite as part of its “FINRA Forward Rule Modernization” effort. In its January 7 summary, the regulator said the new approach would eliminate the $25,000 minimum while “reducing the risks of intraday trading exposures more broadly.” (finra.org) The practical effect is that brokers now have compliance work to do. Firms that built onboarding, alerts and account restrictions around the old four-trades-in-five-days trigger will have to shift to exposure-based monitoring under the revised margin rule. (sec.gov) (finra.org) The decision does not turn day trading into a no-rules activity. It swaps a blunt $25,000 gate for broker-run margin controls tied to actual intraday risk, leaving the next phase to implementation by firms and their customers. (sec.gov)