Rule 4.07(b) Got Silver?

**Rule 4.07(b)** refers to a specific provision in **FINRA Rule 4210** (Margin Requirements), particularly in the context of Covered Agency Transactions (such as TBA transactions, Specified Pool Transactions, and certain CMOs).

Under **Rule 4210(e)(2)(H)(ii)**, members (broker-dealers) must promptly collect margin for a counterparty's excess net mark-to-market loss on these transactions. If the excess loss is not margined or eliminated within **five business days** from when it arises, the member is generally required to **promptly liquidate** the counterparty's positions, unless FINRA grants additional time.

An "**enhanced margin liquidation call**" describes this escalated requirement: it is a stricter, mandatory liquidation obligation triggered after the five-day period for unmargined mark-to-market losses in Covered Agency Transactions (as opposed to standard customer margin accounts, where brokers have discretion to liquidate earlier but no strict timeline mandate).

This provision applies mainly to non-excepted counterparties and includes additional triggers, such as when a member's net capital deductions from unmargined losses exceed certain thresholds (e.g., the lesser of $30 million or 25% of tentative net capital for five consecutive days), leading to business limitations and enforced collections/liquidations.

The rule aims to mitigate counterparty credit risk in the agency MBS market by ensuring timely margining or position close-out. For full details, refer to FINRA Rule 4210 on the FINRA website.