According to Regulation T of the Federal Reserve Board, a margin security is (1) any stock, right, or warrant traded on one of the registered stock exchanges in the U.S.; (2) an OTC stock specifically declared eligible for credit by the Federal Reserve Board; (3) a debt security traded on one of the registered stock exchanges that either (a) is convertible into margin stock or (b) carries a right or warrant to subscribe to a margin stock. Investment company securities and any warrants to purchase a margin security are considered margin securities, whether traded on a registered stock exchange or not.