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8-60 343 Reg. T-65 BOARD OF GOVERNORS ******* of the FEDERAL RESERVE SYSTEM washington ADDRESS January 4, 1938. OFFICIAL C O R R E S P O N D E N C E TO T H E B O A R D Dear Sir: You will recall that the Board's letter (X-9755, Reg. T-50) of December B, 1938, indicated that, notwithstanding the transfer of the nonstatutory duties of the Federal Reserve Agent to the Federal Reserve bank, the then existing provisions of section 11(c) of Regulation T contemplated that the Federal Reserve Agent would continue to execute and send the certificates and notices of the filing of F.R.B. Form T-2 agreements. It will be noted that the equivalent provisions have been changed in Regulation T, as revised effective January 1, 1938, and that this change is also reflected in the Forms T-l, T-2, and T-3, as revised effective that date. It is suggested that the duties in connection with these agreements be taken over by the Federal Reserve bank in accordance with these changes. Section 5(b) of the revised regulation states that: "Blank forms of such ing their filing or regarding the names such agreements are any Federal Reserve agreements, information regardtermination, and information of nonmember banks for which in force, may be obtained from bank." In connection with questions regarding the termination of such agreements, there is attached for your information a copy of a letter and inclosure which was addressed to the President of a Federal Reserve Bank. It is suggested that nonmember banks inquiring as to the procedure for terminating their agreements be advised as indicated in the inclosure and that your bank proceed as there indicated in connection with the termination of any such agreements. Very truly ypujrs, Assistant Secretary. Inclosures. TO PRESIDENTS OF ALL FEDERAL RESERVE BANKS S-GO-a Reg. T--65 December 20, _ 1937. Mr. , President, Federal Reserve Bank of , Dear Mr. : For your information there is attached a copy of a let, Treasurer, ter which is being addressed to Mr. The Trust Company, , , regarding the procedure for terminating the agreement which that bank executed to qualify as a bank from which it is lawful for members of national securities exchanges and certain brokers or dealers to borrow in certain circumstances. If The Trust Company should take the suggested steps for terminating its agreement, it will be appreciated if you will advise the Board of this fact and of any other relevant facts which you may already have available regarding the matter, and give the Board your recommendation as to whether the Board should grant its consent to the termination of the agreement . It will also be appreciated if you will forward to the Board the certificate evidencing the filing of the agreement which is returned by the bank, or the affidavit forwarded in lieu thereof, and one copy of the certified resolution forwarded by the bank. Very truly yours, (Signed) L. P. Bethea L. P. Bethea, Assistant Secretary. Attachment 344 S—60—b Reg. T-65 December 20, 1937. Mr. The , Treasurer, Trust Company, Dear Sir: Reference is made to your letter of October 22, 1937, in which you inquire as to the procedure for terminating the agreement which your bank executed to qualify as a bank from which it is lawful for members of national securities exchanges and certain brokers or dealers to borrow in certain circumstances. The Securities Exchange Act of 1934 does not specifically provide for termination of such agreements otherwise than for violation, and the original Act also contained no provision to prevent liability from arising as the result of an act done or omitted in reliance upon a rule or regulation which might be issued by the Board under the Act and subsequently held to be invalid. In view of the doubts arising from these facts, in 1934 the Board expressed the opinion, as indicated at page 687 of the inclosed copy of the October 1934 Federal Reserve Bulletin, that it could not safely sanction a voluntary termination of such an agreement. Since that time section 23(a) of the Securities Exchange Act has been amended by the Act of May 27, 1936, so that it now provides that: "No provision of this title imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule or regulation of the Commission or the Board of Governors of the Federal Reserve System, notwithstanding that such rule or regulation may, after such act or omission, be amended or rescinded or be determined by judicial or other authority to be invalid for any reason." Recently the question has been carefully reexamined and in the light of all the facts, including the amendment to the statute, it has been concluded that it would be appropriate for the Board to approve the voluntary termination of such agreements in certain circumstances. This view regarding such agreements is incorporated in section 5(b) of the revision of Regulation T which 346 S-60-b Reg. T-65 -2- becomes effective January 1, 1938, and of which a copy is inclosed. Accordingly, if your bank does not have outstanding any loan of the type covered by the agreement and would like to terminate the agreement pursuant to this provision, it is suggested that the board of directors of your bank adopt a resolution substantially in the form attached. In such event two certified copies of the resolution should be forwarded to the Federal Reserve Bank of , together with any certificate or certificates which were issued to your bank to evidence the filing of the agreement. In case such certificate has been lost or destroyed, an affidavit of an officer of your bank as to such loss or destruction should be forwarded to the Federal Reserve Bank of , in lieu of the certificate. When these steps have been taken, the Federal Reserve Bank of will communicate with the Board and the Board will then be in a position to give consideration to the termination of your agreement pursuant to this provision and advise you further. Very truly yours, (Signed) L. P. Bethea L. P. Bethea, Assistant Secretary. Inclosures. S-60-c Reg. T-65 RESOLVED, That the of (indicate officer by title) this institution be and hereby is authorized, in the name and on behalf of this institution, to certify to the Board of Governors of the Federal Reserve System pursuant to section 5(b) of that Board's Regulation T that this institution does not make nor have outstanding any loan of the type covered by the agreement which this institution filed with that Board pursuant to section 8(a) of the Securities Exchange Act of 1934, and to take such other steps as may be prescribed by that Board for the termination of such agreement.
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