Most net asset value (NAV) loans to fund borrowers do not include publicly traded positions in the collateral package because borrowers usually use NAV loans to finance against illiquid positions (and publicly traded positions are inherently more liquid). There are, however, times when a public position is nonetheless included in the NAV collateral either as part of the initial deal or as an addition to the collateral following a restructuring or other transaction. The presence of a public position could be considered “margin stock,” which would implicate the margin rules (Regulations T, U and X issued by the Federal Reserve Board). Analysis of these regulations can be complex, but one part of these regulations is clear—that they can apply to any situation where securities traded on a national securities exchange are involved. Thus, borrowers and lenders should both be vigilant to ensure compliance. Lenders, and in particular non-bank or other NAV lenders that may not be used to financing against publicly traded stock, should be aware of the filing and other requirements of these regulations. Regulation U requires, among other things, the submission of a Form FR G-1 filing within 30 days of the end of the quarter whenever the credit was extended and an annual filing of a Form FR G-4 by each July 30 for certain lenders. Summertime is in full swing, but the margin rules don’t take a vacation!