Margin requirements.
Section 18
Sec. 18. Margin requirements.— For the purpose of preventing the excessive use of credit for the purchase or carrying of securities, the Commission shall prescribe rules and regulations with respect to the amount of credit that may be initially extended and subsequently maintained on any security (other than an exempted security) registered on a securities exchange. For the initial extension of credit, such rules and regulations shall be based upon the following standard: An amount not greater than whichever is the higher of— Fifty per centum of the current market price of the security, or One hundred per centum of the lowest market price of the security during the preceding thirty-six calendar months, but not more than sixty-five per centum of the current market price. It shall be unlawful for any member of a securities exchange or any broker or dealer who transacts a business in securities through the medium of any such member, directly or indirectly to extend or maintain credit or arrange for the extension or maintenance of credit to or for any customer— On any security (other than an exempted security) registered on a securities exchange, in contravention of the rules and regulations which the Commission shall prescribe under the provisions of this section. This section and the rules and regulations thereunder shall not apply (A) to a loan made by a person not in the ordinary course of his business, (B) to a loan on an exempted security, (C) to a loan to a dealer to aid in the financing of the distribution of securities to customers not through the medium of a securities exchange, (D) to a loan by a bank on a security, or (E) to such other loans as the Commission shall, by such rules and regulations as it may deem necessary or appropriate in the public interest or for the protection of investors, exempt, either unconditionally or upon specified terms and conditions, or for stated periods, from the operation of this section and the rules and regulations thereunder. The provisions of this section or the rules and regulations thereunder shall not apply to any loan or extension of credit made prior to the effective date of this Act