Regulation T (Reg T)

A Federal Reserve Board regulation that governs the extension of credit by brokers and dealers to customers for the purchase of securities. Reg T currently sets the initial margin requirement at 50%, meaning an investor must deposit at least half the purchase price when buying securities on margin. Established in 1934 as part of the Securities Exchange Act, the regulation was a direct response to the excessive margin lending that contributed to the 1929 stock market crash.