Series 27: Special Purpose Credit

Taken from our Series 27 Online Guide

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Special Purpose Credit

A creditor may also extend the following types of credit with good faith margin:

• Credit to finance the purchase or sale of securities for prompt delivery if the credit is to be repaid upon completion of the transaction
• Credit to finance securities in transit or surrendered for transfer if the credit is to be repaid upon completion of the transaction
• Credit to enable a broker-dealer to pay for securities if the credit is to be repaid on the same day it is extended
• Credit to an exempted borrower (see Exempted Borrowers section)
• Credit to a member of a national securities exchange or registered broker-dealer to finance its activities as a market maker or specialist
• Credit to a member of a national securities exchange or registered broker-dealer to finance its activities as an underwriter

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Last August 2020 I passed the Series 28 on the first try using your materials. I just wanted to drop in and let you know I passed the Series 27 exam today!! I am so happy today as I took the test in Jan of this year and missed it by 3 points. I switched up my focus and really zoned in the most heavily weighted chapters. This is by far the hardest exam I have taken. Thank you Solomon for your excellent study materials. I'll be back when I pass the next one ;)

Nikita Brown, BMI. Atlanta, GA

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Arthur Priddy, Farmers Insurance. Jackson, Tennessee

Regulation T Credit Accounts
Type of Account	Characteristics
Margin Account	• Initial margin requirement is 50% equity for long equity securities and convertible debt • Initial margin is 150% for short sales of equity securities
Special Memorandum Account (SMA)	• Defines a customer’s buying power with a margin account • Customer can purchase two times amount in SMA
Cash Account	• Transactions must be paid in full within five business days of trade date • Freeriding violations occur in this kind of account • Covered calls and puts can be placed in thi