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Event

NSCC margin calls of January 2021

Higher clearing-fund deposits that NSCC required of member firms during the late-January 2021 volatility, including $6.9 billion in intraday calls on 27 January.

3 links, 3 backed by primary records

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Dates
27–28 Jan 2021

Connections 3

involved

  • National Securities Clearing Corporation clearing agency that made the margin calls Primary record 1
  • Robinhood Markets clearing member (Robinhood Securities); told of a deposit deficit of about $3 billion on 28 January Primary record 2

    Robinhood's figures: a deposit requirement of about $3.7 billion, with about $696 million already on deposit; NSCC later waived part of the charge for that day.

caused

Timeline 1 date
  1. 27–28 Jan 2021 NSCC margin calls of January 2021
Proof 4 sources
  1. Staff Report on Equity and Options Market Structure Conditions in Early 2021, U.S. Securities and Exchange Commission (staff), 14 Oct 2021. Primary record
    On January 27, 2021, in response to market activity during the trading session, NSCC made intraday margin calls from 36 clearing members totaling $6.9 billion, bringing the total required margin across all members to $25.5 billion.
    Instead, some of the impacted broker-dealers maintained that the trading restrictions were a reaction to margin calls and capital charges imposed by NSCC in response to the extraordinary volatility in GME and other stocks.
  2. Testimony of Vladimir Tenev, Robinhood Markets, Inc., before the House Committee on Financial Services, 18 February 2021, House Committee on Financial Services, 18 Feb 2021. Primary record
    At approximately 5:11 a.m. EST on January 28, the NSCC sent Robinhood Securities an automated notice stating that Robinhood Securities had a deposit deficit of approximately $3 billion.
    the trading limits we put in place on GameStop and other stocks were necessary to allow us to continue to meet the clearinghouse deposit requirements that we pay to support customer trading on our platform.
  3. Robinhood Markets, Inc. registration statement (Form S-1), 1 July 2021, Robinhood Markets, 1 Jul 2021. Primary record
    Beginning on January 28, 2021, due to increased deposit requirements imposed on RHS by the NSCC in response to unprecedented market volatility, particularly in certain securities, RHS temporarily restricted or limited its customers’ purchase of certain securities
  4. What happened this week, Robinhood Markets, 29 Jan 2021. Primary record
    this week alone, our clearinghouse-mandated deposit requirements related to equities increased ten-fold. And that’s what led us to put temporary buying restrictions in place on a small number of securities that the clearinghouses had raised their deposit requirements on
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