  We discuss several physical constraints on the nature of the Active Regions
(AR) in Seyfert 1 Galaxies, and show that a plausible model consistent with
these constraints is one in which the ARs are magnetically confined and
``fed''. The unique X-ray index of these sources points to a large compactness
parameter ($l\gg 1$). This, together with the conditions required to account
for the observed optical depth being close to unity, suggests that the magnetic
energy density in the AR should be comparable to the equipartition value in the
accretion disk, and that it should be released in a flare-like event above the
surface of the cold accretion disk. We consider the various issues pertaining
to magnetic flares and attempt to construct a coherent picture, including a
reason for the optical depth in the AR being $\sim 1$, and an understanding of
the characteristics of the X-ray reflection component and the power density
spectra associated with this high-energy emission.
