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FEDERAL R E S E R V E BANK O F DALLAS
Station K, Dallas, Texas 75222

C i r c u l a r No. 84-22
February 3, 1984

TO:

All member banks and o t h e r s concerned in t h e El eventh
Fe dera l Reserve D i s t r i c t

ATTENTION:

Chief Execu ti ve O f f i c e r

SUBJECT:

Proposed amendments
Brokers and Dealers

SUMMARY:

The Board o f Governors o f t h e Fed eral Reserve System
is propos in g t o amend i t s R eg ul at i o n T t o permi t an
o p ti on s c l e a r i n g agency t o accep t margin s e c u r i t i e s t o
meet i t s d e p o s i t r e q u i r e m e n t s . I n t e r e s t e d p a r t i e s a r e
i n v i t e d t o submit comments t o Mr. 17i 11iam W Wile s,
.
S e c r e t a r y , Board o f Governors o f t h e F ed eral Reserve
System, Washington, D.C., 20551.
Comments should
r e f e r to Docket No. R-0500 and must be r e c e i v e d by
Fe bruary 15, 1984.

ATTACHMENTS:

B oard' s p re s s r e l e a s e and m a t e r i a l as s ubmi tt ed f o r
p u b l i c a t i o n in t h e Fed eral R e g i s t e r

MORE INFORMATION:

Legal Department, Ext ens ion 6171

ADDITIONAL COPIES:

Pub li c A f f a i r s Department, E xt ens i on 6289

to

Regulation

T

—

Credit

Banks and others are encouraged to use the following incoming WATS numbers in contacting this Bank: 1-800-442-7140
(intrastate) and 1-800-527-9200 (interstate). For calls placed locally, please use 651 plus the extension referred to above.

By

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

FEDERAL RESERVE press release

For immediate r e l e a s e

J anu ary 12, 1984

The Federal Reserve Board today p u b l i s h e d , fo r p u b l i c comment, a
proposal to amend R egul a tion T, C re d i t by Brokers and D e a l e rs .
The Board r e qu e st e d comment by February 15, 1984.
The proposed r u l e would p ermi t an o p t i o n s c l e a r i n g agency re g u l a t e d
by th e S e c u r i t i e s and Exchange Commission (SEC) t o accep t any margin s e c u r i t i e s
t o meet i t s d e p o s i t re quire me nts provided t h e c l e a r i n y ayency r u l e s reg ardi ng
th e d e p o s i t have been approved by t h e SEC.

An o p t i o n s c l e a r i n g c o r p o r a t i o n

i s s u e s o p ti o n s c o n t r a c t s and gua ra n t e es t h e i r performance.
The B oard' s c u r r e n t r u l e permits t h e use o f a more l i m i t e d c l a s s of
securities.

The Board' s a c t i o n i s i n t en ded t o c o i n c i d e wit h r e l a t e d a ct i o n

by t h e SEC on r u l e s t h a t have been f i l e d with t h e Commission by t h e Options
C le ar in g C o rp o ra ti o n .

The proposed a ct i o n w i l l g e n e r a l l y p ermi t b ro k ers and

d e a l e r s t o use th e same s e c u r i t i e s fo r t h e c l e a r i n g d e p o s i t as t hey now use
a t banks in c onne ction with loa ns secured by customer s e c u r i t i e s .
The B oa rd' s n o t i c e i s a t t a c h e d .

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Attachment

0

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Federal Reserve System
R eg u l at i o n T
(12 CFR 220)
[Docket No. R-0500]
C r e d it By Brokers and Deal ers

AGENCY:

Board of Governors of t h e Federal Reserve System.

ACTION:

Proposed Rule.

SUM ARY:
M

The Board i s proposing t o amend R eg u l at i o n T (12 CFR 220, C r e d i t By

Brokers and De ale rs ) t o permit an o p t i o n s c l e a r i n g agency

t o acc ep t margin

s e c u r i t i e s to meet i t s d e p o s i t re q u i r e m e n t s .

i s being t ak en

This a c t i o n

in

or de r t o f a c i l i t a t e t h e SEC's approval of a proposed Options C l ear i n g Co rpor a ti on
program whereby th e c l a s s o f s e c u r i t i e s e l i g i b l e f o r t h e o p t i o n s c l e a r i n g
ag en cy 's d e p o s i t re q u ire m e n ts wi l l be expanded.
DATE:

Comments should be re ce i ve d on o r b efo re February 15, 1984.

ADDRESS:

Comments, which should be r e f e r t o Docket No. R-0500, may be maile d

t o Mr. William W Wiles, S e c r e t a r y , Board o f Governors o f t h e Federal Reserve
.
System, 20th S t r e e t and C o n s t i t u t i o n Avenue* N.W., Washington, D.C. 20551 o r
d e l i v e r e d t o th e C S t r e e t Entran ce between 8:45 a.m. and 5:15 p.m.
FOR FURTHER INFORMATION CONTACT:

Laura Homer, S e c u r i t i e s C r e d i t O f f i c e r , o r

Robert Lord, Attorney, D ivi si on of Banking S u p erv i s i o n and R eg ul ati o n (202)
452-2781.

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SUPPLEMENTARY INFORMATION:
The Options C le aring C o rpo rat i on ("OCC") has a program (" valued
s e c u r i t i e s program") in which i t ac c e p t s c e r t a i n margin s e c u r i t i e s from i t s
c l e a r i n g members in s a t i s f a c t i o n of t h e i r OCC d e p o s i t re q u i r e m e n t s .

OCC's

a c t i v i t i e s a re s u b j e c t t o Regulat i on T, which c u r r e n t l y p erm i t s t h e d e p o s i t
only of any unde rlying s e c u r i t i e s f o r c l a s s e s of o p t i o n c o n t r a c t s o u t s t a n d i n g
a t th e time of the d e p o s i t .

OCC r e c e n t l y f i l e d a proposed r u l e change ( F i l e

No. SR-0CC-83-17) with th e SEC to expand i t s valued s e c u r i t i e s program by
e l i m i n a t i n g the requirement t h a t only s t o ck s u nd erl y i n g l i s t e d o p t i o n s can be
de po s it ed with OCC, and p e r m i t t i n g t h e d e p o s i t of any common s t o c k s which ( i )
ar e tr a de d on a n a ti o n a l s e c u r i t i e s exchange, or a re NASDAQ s e c u r i t i e s t h a t a r e
de s i gna te d as National Market System s e c u r i t i e s p u rs u an t t o SEC Rule llAa 2-1
(17 CFR 240.11Aa-2), ( i i ) have l a s t s a l e r e p o r t s d i s s em i n a t e d on t h e c o n s o l i ­
dated tape and ( i i i ) have a market value g r e a t e r t han $10 per s h a r e ; provided
t h a t s t ocks which are suspended from t r a d i n g or which are s u b j e c t t o s p ec i a l
requir ements under exchange margin r u l e s may not be d e p o s i t ed with OCC.

The

Board b e l i e v e s th e ru l e change proposed by OCC i s a p p r o p r i a t e and, t h e r e f o r e ,
i s proposing an amendment to R egu l at i on T t h a t , in c o n j u n c t i o n with t h e SEC
r u le a ppr ova l, will permit t h e expanded d e p o s i t program t o t a k e p l ace wi th ou t
unneces sary d e la y .

The amendment t o Regu l at i on T would permi t t h e d e p o s i t of

any margin s e c u r i t y which a l s o meets SEC-approved c r i t e r i a fo r c l e a r i n g d e p o s i t s .
INITIAL REGULATORY FLEXIBILITY ANALYSIS:
The change proposed pu rs u an t t o t h i s a c t i o n reduce s p e c i f i c a d m i n i s ­
t r a t i v e and r e g u l a t o r y burde ns.

The Board c e r t i f i e s f o r purposes of 5 U.S.C.

605( b) , t h e r e f o r e , t h a t th e proposed amendment t o R egu lat i on T i s not expec te d
to have any adverse impact on a s u b s t a n t i a l number of small b u s i n e s s e s .

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L i s t of Subjec ts in 12 CFR Pa rt 220
Banks, Banking, Borrowers, B rok ers , C r e d i t , Federal Reserve System,
Margin, Margin Requirements.
Accordingly, purs ua nt t o s e c t i o n s 7, 8, and 23 o f t h e S e c u r i t i e s
Exchange Act of 1934, as amended (15 U.S.C. §§ 78g, 78h, and 78w) t h e Board
proposes to amend R egulation T (12 CFR 220) as fo l l o ws :
In s e c t i o n 2 2 0 .1 4 (b ) , s u bparag raphs (3) and (4) would be d e l e t e d
in t h e i r e n t i r e t y , and repla ce d with a s i n g l e new s ubparagraph ( 3 ) , which
would read as foll ows :
"(3) the d e p o s i t c o n s i s t s of any margin s e c u r i t y and complies with
the r u le s of th e c l e a r i n g agency which have been approved by t h e SEC."

By o r d e r of the Board of Governors of t h e Federal Reserve System,
J anuary 11, 1984.

(signed) William W. Wiles

Willi am W Wiles
.
S e c r e t a r y o f t h e Board


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102