The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
F ederal r e s e r v e Ba n k o f Dallas DALLAS. T E X A S 75222 Circular No. 69-197 August 1969 LIST OF OTC MARKET MAKERS To All Banks and Others Concerned in the Eleventh Federal Reserve District: Enclosed is a copy of a list of broker/dealer firms that have filed Form X-17A-12(l) with the Securities and Exchange Commission, in order to qualify as OTC market-makers under sec tion 221.3(w) of Regulation U, and the OTC margin stocks in respect of which each has qualified. Also enclosed is a copy of a letter of the Board of Governors of the Federal Reserve System which is being sent to interested persons explaining the exemption. Sample copies of Form F.R. U-2 were furnished to all banks in the District with our Circular No. 69-19^ dated July 31* 1969, for use in printing their supplies. Additional copies of these documents will be furnished upon request. Yours very truly, P. E. Coldwell President Enclosures (2) This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) LIST OF OTC M ARKET M AKERS as of July 18, 1969 (Prepared for vise by banks in connection with extensions of credit pursuant to section 221.3(w) of Regulation U) This list of "OTC market makers" comprises firms that have filed Form X-17A-12(1), the "Notification by OTC market makers in OTC margin securities", with the Securities and Exchange Commission, and the OTC margin stocks in respect of which each such firm had filed such form, as of the above date. In determining whether a broker/dealer has filed Form X-17A-12(1) in respect of OTC margin stock being pledged as collateral to secure credit extended pursuant to section 221.3(w) (but for this purpose only), a bank may rely on the most recent issue of this list, or a supplement thereto. A bank extending such credit must also obtain from the broker/ dealer a properly executed Form F.R. U-2, and must accept such form in good faith, as defined in sections 221.3(a) and 221.3(w) of Regulation U. Copies of supplements and of subsequent issues of the list may be obtained from the Federal Reserve Bank of the district in which the head office of the bank extending such credit is situated. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 2 L i s t o f OTC Market Makers - J u ly 18, 1969 Name of Broker-Dealer Name of Security Adams & Hinckley Fidelity Union Trust Company First Merchants National Bank, Asbury Park Monmouth County National Bank National Newark & Essex Bank New Jersey National Bank & Trust Co. Trust Company of New Jersey Advest Company Addison - Wesley Publishing Company Baird-Atomic Inc. Bolt, Beranek & Newman Inc. Epsco Inc. Jamesbury Corp. Kaman Corp. Class A Keyes Fibre Co. MPB Corp. Manufacturers & Traders Trust Co. Millipore Corp. Southern New England Telephone Co. Superior Electric Co. Trico Products Corp. Allen & Company American Express American Heritage Life Ins. Co. (Florida) American Re-Insurance Co. Atlanta Gas Light Company Cascade Natural Gas Corporation Central Vermont Public Service Corp. Commonwealth Telephone Company Connecticut General Insurance Corp. Cooper Laboratories, Inc. El Paso Electric Company Florida Telephone Corporation The Franklin Life Insurance Co. (Illinois) Franklin National Bank (New York) The Gas Service Company Georgia International Corporation Hartford Fire Insurance Co. Horizon Corporation Allen & Company (con't) Indiana Gas Co., Inc. Iowa Southern Utilities Company Kentucky Central Life Insurance Company King Resources Company Liberty Equities Corporation Life Insurance Company of Kentucky Lilly, Eli and Company Lincoln National Corporation Lomas and Nettleton Financial Corporation Monarch Capital Corporation National Semiconductor Corporation National Western Life Insurance Company Nationwide Corporation New England Gas and Electric Association North Carolina Natural Gas Corporation Northwest Natural Gas Company (Oregon) Pennsylvania Gas & Water Company Piedmont Natural Gas Company, Incorporated Public Service Company of North Carolina, Incorporated Public Service Company of New Hampshire Public Service Company of New Mexico The Saint Paul Companies, Inc. Southern Union Gas Company Southwest Gas Corporation Transcontinental Gas Pipe Line Corporation Trico Products Corporation United States Fidelity and Guaranty Company (Maryland) University Computing Company Washington Natural Gas Company 3 L i s t o f OTC Market Makers - J u ly 1 8, 1969 American Securities Corporation American Express Bankamerica Corporation The Bank of New York Capital Holding Corporation The Cleveland Trust Company The Franklin Life Insurance Company ( 1 1 1 .) Gulf Life Holding Company Hartford Fire Insurance Company Kentucky Central Life Insurance Company Lilly, Eli and Company Manufacturers and Traders Trust Co. Monarch Capital Corp. State Street Bank & Trust Co. Arthurs, Lestrange & Co. Pennsylvania Engineering Corp. Western Pennsylvania National Bank Baird & Co. Inc., Robert W. Advance Ross Corp. Kearney & Trecker Corp. Management Assistance, Inc. Midas International Corporation Class A North Central Airlines Old Line Life Insurance Co. of America Western Publishing Company Wisconsin Power & Light Co. Baker, Watts & Co. Monumental Corporation United States Fidelity & Guaranty Co. Bear, Stearns & Co. American Express Anheuser-Busch Inc. Bankamerica Corp. Bank of New York Bolt, Beranek & Newman Citizens and Southern National Bank of Georgia Combined Insurance Company of America Connecticut General Ins. Crocker Citizens National Bank Bear, Stearns & Co. (con't) Eli Lilly & Co. First Bank System Inc. (Minn.) First National Bank of Boston First National Bank of Chicago Franklin Life Insurance Government Employees Insurance Hanover Insurance Co. Hartford Fire Insurance Co. Lincoln National Corporation Manufacturers National Bank of Detroit Mellon National Bank & Trust Monarch Capital Corporation National Bank of Detroit Pabst Brewing Company St. Paul Companies Security Pacific National Bank U.S. Fildelity and Guaranty University Computing Co. Variable Annuity Life Insurance Corp. Wells Fargo Bank Bishop & Co. Inc., M. H. North Central Airlines The Cornelius Company Blalack/Wells/Associates Inc. Anadite Inc. Management Assistance Inc. Titan Group Inc. Boettcher & Company Fidelity Corporation (Virginia) King Resources Company Unicoa Corporation Brown & Sons, Alex. American Fidelity Life Ins. Co. (Fla.) American Security and Trust Co. First Virginia Bankshares Corp. Gino's Inc. ISI Corporation Millipore Corporation Monumental Corporation 4 L i s t o f OTC Market Makers - J u ly 18, 1969 Brown & Sons, Alex, (con't) Philadelphia Life Insurance Co. Ransburg Electro-Coating Corp. United States Fidelity and Guaranty Co. Brown, Allen & Company, Inc. Contran (Formerly Texas Consumer Finance Corporation) Landa Industries Southland Corporation Burns, Stix, Friedman & Co., Inc. Associated Coca-Cola Bottling Co., Inc. Kaman Corporation Class A Parkview-Gem, Inc. Carolina Securities Corporation North Carolina Natural Gas Corp. Piedmont Aviation, Inc. Cartwright, Valleau & Co. American Re-Insurance Company California-Western States Life I Company Nationwide Corporation Class A Clark, Dodge & Co. , Inc. Millipore Corp. Collins Securities Corp. American Nuclear Corporation Energy Resources Corp. Oil Shale Corp. Texas American Oil Corp. Webb Resources Corp. Conlon and Company, Inc., B.J. Anchor Corp. Dalto Electronics Corp. Energy Resources Corp. Farrington Manufacturing Co. International Book Corp. Keystone Custodian Funds, Inc. King Resources Company Nationwide Corp. The Oil Shale Corp. Courts & Co. Atlanta Gas Light Co. Citizens & Southern National Bank of Georgia Colonial Stores, Inc. Dalto Electronics Corp. Interfinancial, Inc. Interstate Life & Accident Insur ance Co. (Tennessee) Craigie Incorporated Brenco Inc. Fidelity Corp. First & Merchants Corp. First Virginia Bankshares Corp. United Virginia Bankshares Virginia Commonwealth Bankshares Virginia National Bank Cutler, Yantis & Co. American Re-Insurance Co. Gas Service Co. North Central Airlines, Inc. Pennsylvania Engineering Corp. Titan Group, Inc. Wisconsin Power & Light Co. Dain, Kalman & Quail, Inc. Applebaums Food Markets, Inc. Buckbee-Mears Co. The Cornelius Co. Dayton Corp. First Bank System, Inc. Northwestern National Life Insurance Company Otter Tail Power Co. The Saint Paul Companies, Inc. Dempsey-Tegeler & Co., Inc. Combined Insurance Co. of America Continental Computer Assoc., Inc. Erie Technological Products, Inc. The Franklin Life Insurance Co. ( 1 1 1 .) Liberty Equities Corp. North Central Airlines, Inc. Titan Group, Inc. Dryfoos & Co., J.M. Continental Computer Federal Company L i s t o f OTC Market Makers - J u ly 18, 1969 Dryfoos & Co., J.M. (con't) First Mortgage Investors Ginofs Incorporated Perini Corp. Ransburg Electro Coating Corp. Edwards and Sons Inc., A.G. Associated Coca-Cola Bottling Co., Inc. Browning Arms Company Clinton Oil Company D.P.A. Inc. Farrington Manufacturing Company Kentucky Central Life Insurance Co. Liberty Equities Corp. The Oil Shale Corp. Edwards & Hanley Oil Shale Corp. Ormont Drug Elkins, Morris, Stroud & Co. The Fidelity Corporation of Penna. The First Pennsylvania Corporation Girard Company The Philadelphia National Bank Philadelphia Suburban Water Co. Provident National Bank Faulkner, Dawkins & Sullivan Photon, Inc. Recognition Equipment Inc. Tiffany & Co. First California Company Bankamerica Corp. Northwest Natural Gas Corporation First Southeastern Company The Downtowner Corp. Great Commonwealth Life Insurance Co. Interfinaneial, Inc. Scripto, Inc. First Southwest Company American Greetings Corp. Class A American National Insurance Co. (Texas) Dallas Airmotive, Inc. El Paso Electric Company Fidelity Union Life Insurance Co. (Texas) 5 First Southwest Company (con't) First National Bank in Dallas The Franklin Life Insurance Co. (1 1 1 .) Great Commonwealth Life Insurance Co. Gulf Life Holding Company Lomas and Nettleton Financial Corp. Public Service Co. of New Mexico Recognition Equipment Inc. Republic National Bank of Dallas Republic National Life Insurance Co. (Texas) Scientific Control Corporation Shop Rite Foods, Inc. Southern Union Gas Company The Southland Corporation Taylor Wine Company, Inc. Tracor, Inc. Transcontinental Gas Pipe Line Corp. University Computing Company Variable Annuity Life Insurance Co. of America Fox & Co., Inc., P.F. Addison-Wesley Publishing Co., Inc. Class B Allegheny Beverage Corp. American Maize-Products Company American Welding & Manufacturing Co. Anchor Corporation Class B Arkansas Western Gas Company Arvida Corporation Associated Coca-Cola Bottling Co. , Inc. Delhi Australian Petroleum Ltd. Diamond Crystal Salt Company Farrington Manufacturing Company Florida Telephone Corporation Class A Gleason Works Graphic Controls Corporation Keystone Custodian Funds, Inc. Class A Management Assistance, Inc. North Carolina Natural Gas Corp. Pennsylvania Gas & Water Company Piedmont Natural Gas Company, Inc. The Seven-Up Company Simon & Schuster, Inc. Southern Union Gas Company L i s t o f OTC Market Makers - J u ly 18, 1969 6 Fox & Co., Inc., P.F. (con't) Southwest Gas Corporation The Standard Register Company Taylor Wine Company, Inc. Tiffany & Company Trico Products Corporation Wallace Business Forms Inc. Western Publishing Co. Inc. Hay, Fales & Co., Inc. Great Commonwealth Life Insurance Co. National Western Life Insurance Co. Ginberg & Co. Inc., Frank First National Life Ins. Co. of Ala. Keefe, Bruyette & Woods, Inc. Bankamerica Corporation The Bank of California, N. A. Bank of New York Co., Inc. Baystate Corporation The Citizens and Southern National Bank of Georgia The Cleveland Trust Company Crocker National Corporation The Detroit Bank and Trust Co. First and Merchants Corp. First Bank System Inc. The First National Bank of Boston The First National Bank of Chicago First National Bank in Dallas First National Holding Corp. (Memphis) First Pennsylvania Corp. Manufacturers National Bank of Detroit Mellon National Bank and Trust Co. National Bank of Detroit The National City Bank of Cleveland Pittsburgh National Corp. Republic National Bank of Dallas Seattle-First National Bank United Virginia Bankshares, Inc. The Valley National Bank of Arizona Virginia Commonwealth Bankshares Virginia National Bank Wachovia Corp. Wells Fargo and Company Frankel & Co. Inc., Wm V. Horizon Corp. Frumin, Murray & Company Diamond Crystal Salt Co. Funk, Hobbs & Hart, Inc. Texas International Airlines, Inc. Goelzer & Co., Inc. Herff Jones Co. Goldman, Sachs & Co. American District Telegraph Company American Express Co. American Greetings Corporation Class A Anheuser-Busch, Incorporated Bankamerica Corporation Baystate Corporation The Brush Beryllium Company Combined Insurance Co. of America Connecticut General Insurance Corp. The Franklin Life Insurance Co. (111.) Gulf Life Holding Co. Hartford Fire Insurance Co. The Hoover Company Horizon Corporation Eli Lilly and Co. Lincoln National Corporation Monarch Capital Corporation A. C. Nielsen and Co. Pabst Brewing Company The Saint Paul Companies, Inc. Tampax, Incorporated United States Fidelity and Guaranty Co. (Md.) Hartzmark & Co., Inc. King Resources Hayden, Stone Incorporated Anadite Incorporated 1ST Corp. King Resources Kelly & Morey, Inc. Webb Resources Kirkpatrick, Pettis, Smith Polian Inc. Washington Natural Gas Company Lehman Brothers American District Telegraph Co. American Express Company American Greetings Corp. Class A 7 L i s t o f OTC Market Makers - J u ly 18, 1969 Lehman Brothers (con't) Anheuser Busch, Inc. Brush Beryllium Company De Luxe Check Printers, Inc. Lilly (Eli) & Company, Inc. Nielsen (A.C.) and Company Class A Pabst Brewing Company Southland Corporation Standard Register Company Ling & Company, Inc. Empire Life Ins. Co. of America (Tex.) First National Life Ins. Co. (Ala.) Class A Great Commonwealth Life Ins. Co. Republic National Life Ins. Co. (Tex.) Scientific Control Corp. Loeb, Rhoades 6c Co. The Cross Company First National Bank in Dallas Grinnell Corporation The National Life Insurance Company of Florida Ransburg Electro-Coating Corp. O.M. Scott and Sons Madoff, Bernard Lawrence Allegheny Beverage Corp. Energy Resources Corp. Louisiana 6c Southern Life Ins. Co. Pennsylvania Engineering Corp. Roberts Co. Marks 6c Co. Inc. , Carl Alexander and Baldwin, Inc. Delhi Australian Petroleum Ltd. First Mortgage Investors (Mass.) Food Fair Properties, Inc. Hawaiian Airlines, Inc. Honolulu Gas Company, Ltd. Horizon Corporation ISI Corp. Kaman Corp. Narragansett Capital Corporation Ocean Drilling 6c Exploration Co. Southwest Gas Producing Co. Inc. Tidewater Marine Service Inc. Webb Resources, Inc. Martin J. Joel 6c Co. Drew National Corp. May 6c Co. , Inc. Heath-Tecna Mayer and Schweitzer, Inc. Allegheny Beverage Corp. Clinton Oil Co. Food Fair Properties, Inc. Major Realty Corp. McKee 6c Company, Inc. , C. S. The Duriron Company, Inc. WPNB Corp. McMaster, Hutchinson 6c Co. The Federal Company United Services Life Insurance Co. Will Ross, Inc. Meyers 6c Company, John J. American District Telegraph Grinnell Corp. Morgan, Kennedy 6c Co. , Inc. Allegheny Beverage Drew National Ormont Drug Morrissey 6c Co. , F. J. Continental Bank (Norristown, Pa.) The Fidelity Corporation of Penna. Girard Company The Philadelphia National Bank Philadelphia Suburban Water Corp. Provident National Bank Paine, Webber, Jackson 6c Curtis Acushnet Co. American Pipe 6c Construction Co. Associated Coca-Cola Bottl. Co. BMA Corp. Buckbee-Mears Co. Central Vermont Public Service Corp. First Mortgage Investors Hardee's Food System Inc. Nationwide Corp. North American Life 6c Casualty Co. L i s t o f OTC Market Makers - J u ly 18, 1969 Paine, Webber, Jackson & Curtis (con't) Parkview-Gem Inc. Public Service Co. of New Hampshire Parker & Weissenborn, Inc. American Presidents Life Insurance Co. Fidelity Union Trust Company Monmouth County National Bank National Newark & Essex Bank Trust Company of New Jersey Peet & Co., H.O. Parkview Gem Richter & Co., Henry J. Alpine Geophysical Associates, Inc. American National Ins. Co. (Tex.) Anheuser-Busch, Inc. California-Western States Life Ins. C , o, Clinton Oil Co. Farrington Manufacturing Co. The Gas Service Co. ISI Corporation Liberty Equities Corporation Nationwide Corp. Parkview-Gem, Inc. The Travelodge Corporation The Robinson-Humphrey Company, Inc. Atlanta Gas Light Co. Bibb Manufacturing Co. Citizens & Southern National Bank of Georgia Coastal States Life Insurance Co. Colonial Stores Federal Co. Scripto, Inc. Class A Rotan, Mosle-Dallas Union, Inc. American National Ins. Co. (Texas) D.P.A., Inc. First National Bank in Dallas The Franklin Life Insurance Co. (111.) Recognition Equipment Incorporated Republic National Life Ins. Co. (Tex.) Texas International Airlines Inc. Tracor, Inc. Samuel & Co., John E. Clinton Oil Co. Oil Shale Corp. 8 Sanders & Company, Inc. Contran Corporation Landa Industries, Inc. Lomas and Nettleton Financial Corp. Republic National Life Ins. Co. (Tex. Tracor, Inc. Saxton & Co. Iiic., G.A. Addison-Wesley Publishing Co. Class Allegheny Beverage Corp. Alpine Geophysical Associates Inc. American Express American Greetings Corp. Class A American National Ins. Co. Anchor Corp. Class B Anheuser-Busch Inc. Arkansas Western Gas Arvida Corp. Baird Atomic Inc. Betz Laboratories Inc. Browning Arms Co. Brush Beryllium Co. Capital International Airways Carson Pirie Scott 6 Co. e Cascade Natural Gas Corp. Citizens Utilities Co. Class A Citizens Utilities Co. Class B Clinton Oil Co. Coastal States Life Insurance Co. Continental Computer Assoc. Inc. Diamond Crystal Salt Co. Drew National Corp. El Paso Electric Co. Energy Resources Corp. First Mortgage Investors Food Fair Properties Inc. Gleason Works Gyrodyne Co. of America Inc. Hardee's Food System Inc. Hartford Fire Insurance Co. Heath Tecna Corp. Herff Jones Co. Hoover Co. Horizon Corp. Indiana Gas Company Intext Inc. ISI Corp. Jamesbury Corp. Kaiser Steel Corp. Kentucky Central Life Insurance Co. Keystone Custodian Funds Inc. Class 9 L i s t o f OTC Market Makers - J u ly 18, 1969 Schapiro & Co. Inc., M.A. (con't) The Citizens and Southern National Bank of Georgia The Cleveland Trust Company Crocker-Citizens National Bank The Detroit Bank & Trust Company The fidelity Corporation of Penna. Fidelity Union Trust Company (N. J.) First Bank System, Inc. First Merchants National Bank, Asbury Park The First National BankofBoston The First National BankofChicago The First National BankinDallas The First Pennsylvania Corp. First Virginia Bankshares Corp. Franklin National Bank (New York) Girard Company Manufacturers and Traders Trust Co. Manufacturers National Bank of Detroit Mellon National Bank & Trust Co. Monmouth County National Bank National Bank Detroit The National City Bank of Cleveland National Newark & Essex Bank New Jersey National Bank & Trust Co. The Philadelphia National Bank Pittsburgh National Corp. Provident National Bank State Street Bank & Trust Company. Seattle First National Bank Republic National Bank of Dallas The Trust Company of New Jersey United Virginia Bankshares, Inc. The Valley National Bank of Arizona Virginia Commonwealth Bankshares Virginia National Bank Wachovia Corp. Wells Fargo Bank, N. A. Saxton & Co. Inc., G.A. (con't) King Resources Landa Industries MPB Corp. Maine Sugar Industries Inc. Major Realty Corp. Management Assistance Inc. Midas International Corp. Class A Nationwide Corp. Class A Nielsen, A.C. & Co. Class A North American Life & Casualty Co. North Carolina Natural Gas Corp. Northwest Natural Gas Co. Oil Shale Corp. Pabst Brewing Co. Perini Corp. Photon Inc. Piedmont Aviation Piedmont Natural Gas Co. Public Service Co. of New Mexico Publishers Co. Ransburg Electro-Coa Corp. Recognition Equipment Inc. Roberts Co. Scott O.M. & Sons Co. Class A Scripto Inc. Class A Seven-Up Co. Simon & Schuster Inc. Southern Union Gas Co. Southland Corp. Southwest Gas Corp. Sovereign Industries Inc. Standard Register Co. State Street Bank & Trust Co. Tiffany & Co. Tidewater Marine Service Inc. Titan Group Inc. Transcontinental Gas Pipe Line Corp. Travelodge Corp. United Convalescent Hospitals Inc. United Life & Accident Ins. Co. U.S. Banknote Corp. U.S. Fidelity & Guaranty Co. University Computing Co. Siegel & Co. Inc., Sidney A. Cognitronics Corp. Midas Intl. Corp. Class A Schapiro & Co. Inc. , M.A. American Security and Trust Company Bankamerica Corp. The Bank of California, N.A. The Bank of New York Company Baystate Corporation Singer & Mackie, Inc. Alpine Geophysical Associates, Inc. Allegheny Beverage Corp. American Nuclear Corp. Arvida Corp. Baird-Atomic, Inc. L i s t o f OTC Market Makers - J u ly 18, 1969 Singer & Mackie, Inc. (con't) Clinton Oil Company Cognitronics Corp. Delhi Australian Petroleum, Ltd. Farrington Manufacturing Company Food Fair Properties, Inc. Gyrodyne Company of America, Inc. Horizon Corp. Interfinancial Inc. Jamesbury Corporation Jet Avion Corp. King Resources Co. Lin Broadcasting Corp. Major Realty Corp. Management Assistance Inc. National Semiconductor Corp. North Central Airlines, Inc. The Oil Shale Corp. Pennsylvania Engineering Corp. Perini Corp. Photon, Inc. Recognition Equipment Incorporated Scripto, Inc. Simon & Schuster Inc. Sovereign Industries, Inc. Texas American Oil Corp. Titan Group, Inc. United States Banknote Corp. Webb Resources Smith, Burris & Co. Barber-Green Company Carson Pirie Scott & Co. Life Insurance Co. of Kentucky Stern Brothers & Co. The Gas Service Company Sterne, Agee & Leech, Inc. Liberty National Life Insurance Company Swift, Henke & Co., Inc. Barber-Greene Company Carson Pirie Scott & Co. Coastal States Life Insurance Co. Erie Technological Products Inc. North Central Airlines Inc. The Old Line Life Insurance Company of America Ozite Corporation Pettibone Corp. 10 Swift, Henke & Co., Inc. (con't) The Standard Register Company Unicoa Corp. United Life & Accident Ins. Co. Will Ross, Inc. Tatro Co., Edwin L. The Bank of New York Co. Capital Holding Co. Fidelity Union Life Ins. Co. (Tex.) The Franklin Life Insurance Co. (1 1 1 .) Franklin National Bank (New York) Integon Corp. Monumental Corp. Philadelphia Life Insurance Co. Republic National Life Ins. Co. (Texas) United Services Life Insurance Co. (Washington, D.C.) Torpie & Saltzman, Inc. International Book Corp. Kaman Corp. Class A Major Realty Corp. Oil Shale Corp. Ormont Drug & Chemical Co. Troster, Singer & Company American Furniture Company, Inc. American District Telegraph Co. American Maize-Products Co. American Nuclear Corp. Atlanta Gas Light Co. Bio-Dynamics, Inc. Bolt, Beranek, and Newman, Inc. Brush Beryllium Co. Buckbee-Mears Co. Clinton Oil Co. Cognitronics Corp. Computer Usage Co., Inc. Contran Corp. Cooper Laboratories, Inc. The Cross Company Dalto Electronics Corp. Diamond Crystal Salt Company Eastern Shopping Center, Inc. Energy Resources Corporation Epsco Incorporated Erie Technological Products, Inc. Fabri-Tek Inc. L i s t o f OTC Market Makers - J u ly 18, 1969 Troster, Singer & Company (con't) Farrington Manufacturing Company First Mortgage Investors (Mass.) Florida Telephone Corp. Food Fair Properties, Inc. The Gas Service Company Gelman Instrument Co. Georgia International Corp. Green Mountain Power Corp. Grinnell Corp. Hardee's Food System, Inc. The Hoover Company Indiana Gas Co., Inc. Kearney & Trecker Corp. Kentucky Central Life Insurance Co. King Resources Company Landa Industries, Inc. Maine Sugar Industries, Inc. Major Realty Corp. Mallinckrodt Chemical Works The Mohawk Rubber Company Monmouth County National Bank Nationwide Corporation New England Gas & Electric Assoc. North Carolina Natural Gas Corp. The Oil Shale Corporation Ormont Drug & Chemical Co., Inc. Pauley Petroleum Inc. Pennsylvania Engineering Corp. Perini Corporation Photon, Incorporated Piedmont Aviation, Inc. Public Service Co. of North Carolina, Inc. Public Service Co. New Mexico Publishers Company, Incorporated Simon & Schuster, Inc. Southwest Gas Producing Co., Inc. Sovereign Industries, Inc. Tampax, Inc. United States Banknote Corporation Will Ross, Inc. Underwood, Neuhaus & Co., Inc. Contran Corp. Universal Securities Corporation The Downtowner Corp. First National Life Insurance Co. Great Commonwealth Life Ins. Co. Gulf Life Holding Co. 11 Universal Securities Corporation (con't) Kentucky Central Life Ins. Co. Liberty National Life Ins. Co. Southern Industries Corp. C.E. Unterberg, Towbin Co. United Convalescent Hospitals, Inc. Walker, Austin & Waggener, Inc. Republic National Bank of Dallas Walston & Company, Inc. Bankamerica Corp. Weber, Hall, Cobb 6c Caudle, Inc. Contran Corporation Empire Life Insurance Co. of America Landa Industries, Inc. Lomas 6c Nettle ton Financial Corp. Scientific Control Corp. Southland Corporation. A'ofCOV^-. BDARD DF GDVERNDRS □ F THE FEDERAL RESERVE SYSTEM W A S H IN G T O N , D. C . 20551 ADDRESS OFFICIAL TO THE CORRESPONDENCE BOARD In section 221.3(w) of Regulation U, effective August 8, 1969, the Board of Governors has adopted a provision permitting banks to extend credit without: regard to margin requirements to broker/dealer firms making a market in stocks that are on the Board's List- of OTC Margin Stocks ("the list"). Regulation U covers Credit by Banks for the Purpose of Purchasing or Carrying Margin Stocks. This letter discusses, for your information, some procedures to be followed by banks in extending credit pursuant to this provision. In order to qualify for credit pursuant to section 221.3(w), an "OTC market-maker" must comply with the Securities and Exchange Commission's Rule 17a-12, which was made public in its press release of July 3, 1969. Essentially, the market-maker must (A) have filed with the Commission a . statement that it is making a market in an OTC margin stock (and file required periodic reports thereafter), and (B) meet the other requirements set forth in the Rule and in section 221.3(w), including having certain minimum net capital, publishing bona fide competitive bid and offer quota tions on the stock, being ready, willing and able to effect transactions in the stock, and having a reasonable average rate of inventory turnover. In order to extend credit pursuant to section 221.3(w), a bank must determine (A) that the borrower is a qualified OTC market-maker in the stock being pledged to secure the credit, (B) that the stock being pledged has not been identified as a security held for investment purposes, under Internal Revenue Regulations, and (C) that the credit is being used to conduct the market-making activity of the broker/dealer in the OTC mar gin stocks in which he is qualified with the Commission (although not necessarily the same stock that serves as collateral for the loan). A lending bank should be alert at all times for facts and circumstances that might be inconsistent with any of these determinations. However, in general, a bank would use primarily the following indications. - 2 - A list of qualified OTC market-makers and the stocks in which they are qualified, as of July 18, 1969, will be available through the Federal Reserve Bank of the district in which the bank's offices are situated. This list cannot, of course, be fully up-to-date on marketmakers as of the August 8 effective date. It is also anticipated that broker/dealers will have occasion subsequently to qualify or de-qualify in particular OTC margin stocks. For this reason, supplements to the list will be available through the Federal Reserve Bank. Completely revised lists will be issued from time to time as appropriate. When a broker/dealer notifies the Commission that it has ceased making a market in an OTC margin stock, it will include on the form of notification a list of banks from which it is currently borrow ing. Each such bank will be notified by the Reserve Bank, by certified mail, that pursuant to section 22.1.3(w) (3) of the regulation, credit on the stock in question should henceforth be treated as subject to sec tion 221.1. In determining that the OTC margin stock being pledged as collateral is,not being held for investment, and that the credit is being used to conduct the market-making activities of the broker/dealer in the OTC margin stocks in which he is qualified, the lending bank may rely on a statement furnished by the broker/dealer on Form F.R. U-2, if the statement is executed by the broker/dealer and executed and accepted by an officer of the bank in good faith, as defined in sections 221.3(a) and 221.3(w), prior to the extension of credit. As stated above, in accepting the form, the bank should be alert for any facts or circumstances tending to indicate either that the broker/dealer was not performing a market-making function in the stock, or that the pledged shares were being held for investment purposes, or both. Like the verification described above, a statement on Form F.R. U-2. need be obtained only once, when a line of credit is opened on the stock. No subsequent statement need be obtained in respect to the same broker/dealer and the same OTC margin stock unless the bank has, in the interim, been notified that the broker/dealer has ceased making a market in the stock or the bank otherwise has reason to believe that the broker/dealer is not in fact so acting. In such an event, if the brokerMealer requested a new line of exempt credit on the same stock, the bank should verify with the Reserve Bank that the firm has re-qualified, and a new Form F.R. U-2 should be obtained. If a commercial bank has any further questions, it should contact the Federal Reserve Bank of its district. Very truly yours, Kenneth A. Kenyon, Deputy Secretary.