The U.S. Securities and Exchange Commission on Wednesday approved a major revision to the pattern day-trading (PDT) rule, removing the decades-old requirement that investors hold at least $25,000 in a margin account to engage in frequent intraday trades. The move is designed to replace the fixed minimum-equity threshold with a framework that requires customers to carry sufficient equity to meet the real-time risk of their positions, irrespective of account size.
Market reaction was immediate. Shares of retail broker Webull rose by more than 9% following the announcement, while rival Robinhood Markets saw its stock climb about 5.7%.
The SEC's decision follows a proposal advanced by the Financial Industry Regulatory Authority to eliminate the restrictions that prevented investors with less than $25,000 in assets from executing more than four day trades within any five-business-day period. Under the new approach, the formal definition of a pattern day trader and the $25,000 floor are removed and replaced by a requirement to maintain adequate equity tied to the real-time risk posed by open positions.
SEC’s Assistant Secretary Sherry Haywood said public feedback "overwhelmingly supported" the shift, which removes both the minimum-equity threshold and the formal definition of a pattern day trader.
Retail brokers responded promptly to the regulatory change. Anthony Denier, Group President and U.S. CEO of Webull, said the reform was overdue and framed it as an alignment of regulation with current market realities. He emphasized the role of better-informed and better-equipped retail investors and underscored Webull's preparations for the transition.
Denier said "PDT reform is long overdue," adding that "today’s retail investors are more informed, more engaged, and equipped with better tools than ever before."
Denier further characterized the update as a correction to regulation, stating it "is about aligning regulation with how markets actually function, and ensuring access isn’t arbitrarily limited." He noted that Webull had been preparing for the change as part of a broader emphasis on access, transparency, and investor controls.
"We’ve been preparing for this shift because we believe the future of retail investing is rooted in access, transparency, and control," Denier said. "As the landscape evolves, our focus remains on giving investors the tools and insights they need to trade responsibly."
The approved framework requires customers to hold sufficient equity to cover the real-time risk of their positions, a standard that applies regardless of account size. How individual brokers operationalize these real-time risk requirements and how customers adapt to the new funding expectations will determine the practical effects of the change.
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