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X-8090 *' TELEGRAM FEDERAL RESERVE BOARD WASHINGTON October 17, 1934. CURTISS Boston Regarding Gettemy' s telegram October 13 with respect to whether, i n case referred to i n telegram, there i s an "extension of credit" withi n meaning of Board's RULING NO. 16 INTERPRETING REGULATION T. Board advises that existence of "extension of credit" i n any case w i l l depend upon f a c t s of that particular case and applicable provisions of State law. For t h i s reason Board i s unable to answer question i n general form submitted but c a l l s attention to RULING NUMBER 20 INTERPRETING REGULATION T which deals with cash transactions but which indicates factors which Board considers important i n determining when extension of credit occurs. Furthermore, as question in telegram r e - f e r s to u n l i s t e d s e c u r i t i e s i t should be borne i n mind that s e c t i o n 7 ( c ) ( 2 ) of Securities Exchange Act makes i t unlawful for a creditor as defined in section 2(b) of Regulation T to extend credit t o or for a customer without c o l l a t e r a l or on c o l l a t e r a l other than exempted and/or registered s e c u r i t i e s except i n accordance with rules which Federal Reserve Board may prescribe and that Board i s not empowered t o prescribe rules authorizing such extensions of credit i n cases where extension of credit i s for purpose of purchasing or carrying s e c u r i t i e s * (Signed) L. P. Bethea BETHEA
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