Which statement accurately describes Regulation T?

Regulation T, which is established by the Federal Reserve Board (FRB), governs the extension of credit by brokers and dealers to customers for the purchase of securities. This regulation is crucial because it helps maintain stability in the financial markets by regulating how much credit may be extended to customers for buying securities.

The correct choice highlights the authority of the FRB in setting these rules, reflecting the intention of the regulation to control the amount of borrowing clients can undertake in the buying of securities. It plays a key role in determining the initial margin requirements that can be imposed in securities transactions.

While it is true that there are other entities like FINRA and the SEC that establish regulations affecting trading and market practices, they do not specifically set the parameters of Regulation T. Instead, they operate under or alongside the frameworks provided by the FRB.