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X-8071 FEDERAL RESERVE BOARD STATEMENT SDR THE PRESS For immediate r e l e a s e . ,October 13, 1934 MARGIN REQUIREMENTS - JOINT ACCOUNTS BETWEEN MEMBERS OF NA.1TOMAL SECURITIES EXCHANGES. RULIM3- NO. 22 INTERPRETING REGULATION T. The F e d e r a l Reserve Board has been asked t o r u l e on the q u e s t i o n whether t h e r e i s an e x t e n s i o n of c r e d i t by a c r e d i t o r to a customer w i t h i n t h e meaning of t h e Board's Regulation T i n t h e case p r e s e n t e d by t h e f o l l o w i n g f a c t s ; A f i r m having membership i n a n a t i o n a l s e c u r i t i e s exchange and an i n d i v i d u a l member of t h e exchange form a j o i n t a c count f o r t r a n s a c t i o n s i n s e c u r i t i e s . The i n d i v i d u a l p r o - vides no c a p i t a l but f u r n i s h e s to t h e j o i n t account s e r v i c e s i n purchasing and s e l l i n g t h e s e c u r i t i e s . The f i r m pays f o r the s e c u r i t i e s bought, f u r n i s h e s t h e s e c u r i t i e s sold and "clears the account". In t h e s e circumstances, t h e Board has r u l e d t h a t such r e l a t i o n s h i p does not c o n s t i t u t e a c r e d i t o r - c u s t o m e r r e l a t i o n s h i p , within the meaning of Regulation T, between the f i r m and the j o i n t account o r the f i r m and the i n d i v i d u a l , and t h a t , t h e r e f o r e , such t r a n s a c t i o n s a r e not s u b j e c t t o the p r o v i s i o n s of the r e g u l a t i o n governing e x t e n s i o n s of c r e d i t t o a customer.
@FedFRASER