Cash account

a brokerage account that settles transactions on a cash basis. A customer with such an account is required by the Federal Reserve Board's Regulation T to pay for securities in cash in the required timeframe. Trading securities on margin is not allowed. Cash accounts may initiate a position with unsettled funds, but may not liquidate such a position until the funds used become settled. If liquidation occurs before funds are settled, the client will have committed a Reg-T violation (Free Riding) requiring the account to be put on a 90-day restriction.