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X-8043 T E L E ORAM FEDERAL EESERVE BOARD WASHINGTON CURTISS - BOSTON CASE - NSW YORK AUSTIN - PHILADELPHIA WILLIAMS - CLEVELAND TRANS. NO. 2105. HOXTON - RICHMOND NEWTON - ATLANTA. STEVENS - CHICAGO WOOD - ST. LOUIS October 4 , 1934. PEYTON - MINNEAPOLIS MC CLURE - KANSAS CITY WALSH - DALLAS SARGENT - SAN FRANCISCO In reply to an inquiry as to the e f f e c t under sections 4(c) and 4(e) of Regulation T of a creditor allowing a customer to e f f e c t a transaction i n an unrestricted account which would make the account a r e s t r i c t e d account and then f a i l i n g to obtain, within three f u l l business days as s p e c i f i e d in section 4(e) of the regulation, the margin required for the transac4 t i o n , the Board has advised that such f a i l u r e to obtain margin w i l l not merely cause the account to become a r e s t r i c t e d account but w i l l constitute a v i o l a t i o n of the regulation, unless within said three day period the account i s otherwise brought into conformity with the regulation or within said three day period an extension of time i s obtained as provided i n the f i r s t proviso « of section 4 ( e ) . Such an account may be brought into conformity with the regulation by such increase i n the maximum loan value of the s e c u r i t i e s i n the account and/or such decrease i n the adjusted debit balance of the account as would r e s u l t in the account being an unrestricted account a f t e r eliminating from the computation of the adjusted debit balance any temporary credit given pursuant to clause 8 of s e c t i o n 3 ( f ) for margin required on the transaction and demanded but which has not been obtained. The inquiry as submitted pointed out that i n the case of a s a l e made on the third business day for the purpose of bringing the account into conformity with the regulation the proceeds would not ordinarily be obtained u n t i l a f t e r the three day l i m i t bad expired. It ii06 X-8043 — 2 — should be noted, however, that under clause 7 of s e c t i o n 3 ( f ) of the regulat i o n the adjusted debit balance of the account r e f l e c t s the s a l e as soon as i t i s made even though proceeds of the s a l e are not yet credited to the account . (Signed) L. P. Bethea BETHEA.
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