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F ederal

Ba n k o f Da lla s

Circular No. 70-62
March 16, 1970


To All Member Banks in the
Eleventh Federal Reserve District:
Quoted below is a press release of the Board of Governors of
the Federal Reserve System announcing the modification of the Board’s
proposal to amend Regulations D and Q with respect to subordinated notes
and debentures:
"On March 2, 1970, the Board announced a proposal to
amend its Regulations D and Q, relating to member bank re­
serve requirements and interest rate ceilings, in order to
bring certain subordinated obligations of member banks within
the definition of deposits for purposes of those regulations.
(Federal Register for March 10, 1970, 35 F.R. 1+307). It was
indicated that the proposed amendments would not affect 'any
instrument issued before March 9? 1970, that has an original
maturity of more than two years, is unsecured, and states
expressly that it is subordinated to the claims of depositors.
"In order to alleviate hardships, if any, that might be
imposed upon some member banks that had made public offerings
of subordinated notes before March 9> 1970, and have not com­
pleted the sale of such notes, the Board has concluded that,
if the proposed amendments should be adopted, the language
above quoted would be changed so that notes of the kind de­
scribed would not be subject to the regulations if they are
issued before the effective date of such amendments and pur­
suant to a public offering made before March 9> 1970.
"This modification in the proposed amendment will not
extend the time for comments beyond the original deadline of
April 2, 1970."
The March 2 proposal to amend Regulations D and Q was forwarded
to you earlier under our circular No. 70-55*
Yours very truly,
P. E. Coldwell

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