Regulation U (12 CFR 221)
USA
Regulation U (12 CFR 221) (REG U)
Regulation U. Also known as margin regulations.
The Federal Reserve Board regulation that governs loans made by banks for the purpose of buying securities. The regulation is intended to protect investors and limit speculative bubbles in the securities markets by limiting the amount of credit available to purchase securities. The importance to lenders is that it provides that no more than 50% of the value of the loan can be secured by publicly traded stock; loans made in violation of the regulation are void (Securities Exchange Act of 1934, Section 7).
The former Regulation G (which applied to non-bank, non-broker-dealer lenders in the US before 1998) was rolled into Regulation U.
For further information see Regulation U:

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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