SEC scraps $25K PDT rule

The Securities and Exchange Commission approved a rule change on April 14 that removes the $25,000 minimum tied to pattern day trader accounts. (sec.gov) The old rule came from Financial Industry Regulatory Authority Rule 4210 and tagged customers as pattern day traders if they made four or more day trades in five business days and those trades were more than 6% of activity in a margin account. (finra.org) Under the April 14 order, Financial Industry Regulatory Authority will delete the pattern day trader provisions and replace the old fixed threshold with intraday margin standards tied to a customer’s exposure during the trading day. (sec.gov) That means the rule is moving from a single balance test to a live risk test: brokers will have to measure how much exposure a margin account is carrying instead of checking whether it sits above $25,000. (sec.gov) Financial Industry Regulatory Authority said in January that the filing was part of its rule modernization effort and would remove the longstanding pattern day trader designation while aiming to reduce risks from intraday trading exposures more broadly. (finra.org) The change lands after a comment process that began with Financial Industry Regulatory Authority’s filing on December 29, 2025, publication in the Federal Register on January 14, 2026, and final approval by the Securities and Exchange Commission on April 14, 2026. (sec.gov) (federalregister.gov) Retail brokerage stocks moved on the news. Yahoo Finance reported Robinhood shares jumped after the approval, and said Webull shares also climbed 6% in early coverage. (finance.yahoo.com) Investing.com reported Robinhood rose 6% on Wednesday after a 10% gain on Tuesday tied to the rule change. (investing.com) The Securities and Exchange Commission order does not erase margin risk. It replaces one bright-line gate with a framework that still lets brokers impose requirements based on how much a customer is borrowing and how quickly positions can move. (sec.gov) For traders who spent years working around the four-trades-in-five-days cap, the practical shift is simple: access will no longer hinge on crossing a $25,000 line, but on whether a broker judges the account’s intraday risk to be covered. (finra.org) (sec.gov)