A margin account is a specific type of brokerage account that allows an investor to borrow money from the broker-dealer to purchase securities. The securities in the account serve as collateral for the loan. This practice, known as buying on margin, allows investors to leverage their purchasing power. The extension of credit in these accounts is governed by the Federal Reserve Board's Regulation T and FINRA rules. This arrangement increases both potential gains and potential losses for the investor.

A. Cash: A cash account requires the investor to pay for all securities in full by the settlement date and does not permit borrowing.

C. An individual retirement account (IRA): IRAs are tax-advantaged retirement accounts, and FINRA and IRS regulations generally prohibit borrowing money or trading on margin within them.

D. Delivery versus payment (DVP) / receive versus payment (RVP): This is a settlement procedure for institutional accounts, not an account type for individuals that permits borrowing from a broker.

1. U.S. Securities and Exchange Commission (SEC). "Investor Bulletin: Investing With Borrowed Funds: No Margin for Error." SEC.gov, August 1, 2013. In the section "What is a Margin Account?", the document states, "A margin account is a brokerage account in which your brokerage firm lends you cash, using the account as collateral, to purchase securities."

2. Financial Industry Regulatory Authority (FINRA). "FINRA Rule 4210. Margin Requirements." FINRA Manual. This rule establishes the margin requirements for broker-dealers, fundamentally defining the operational nature of accounts where credit is extended to customers for securities transactions.

3. Board of Governors of the Federal Reserve System. "Regulation T, 12 C.F.R. Part 220, Credit by Brokers and Dealers." This regulation governs the extension of credit by securities brokers and dealers to customers for the initial purchase of securities. Section 220.1(a) outlines its authority over "every securities credit transaction."

4. Bodie, Z., Kane, A., & Marcus, A. J. (2018). Investments (11th ed.). McGraw-Hill Education. In Chapter 3, "How Securities Are Traded," the section on "Buying on Margin" explains: "When purchasing securities, investors have easy access to a source of debt financing called broker's call loans. The act of taking advantage of broker's call loans is called buying on margin." (Specific content found in Section 3.5).