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F ederal Reserve b a n k o f Dallas DALLAS, TE X A S 75222 Circular No. 72-258 November 13, 1972 INTERPRETATIONS OF REGULATION U (Computation of Time Periods for Acquiring and Holding Blocks of Stock by Block Positioners) To All Banks, Broker/Dealers, Regulation G-Registrants and Others Concerned, in the Eleventh Federal Reserve District: The Board of Governors of the Federal Reserve System issued, on November 3 , 1972, an interpretation concerning the com putation of time periods for acquiring and. holding blocks of stock by block positioners under the provisions of Regulation U. The interpretation is printed, on the reverse. Yours very truly, P. E. Coldwell, President This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM CREDIT BY BANKS FOR THE PURPOSE OF PURCHASING OR CARRYING MARGIN STOCKS INTERPRETATION OF REGULATION U SEC T IO N 221.121 C O M P U T A T IO N O F T IM E P E R IO D S F O R A C Q U IR IN G A N D H O L D IN G BLOCKS O F STO CK BY BLO CK PO SIT IO N E R S. (a) T he Board recently considered two ques tions in connection with section 221.3 (z) (2 ) and (3 ) of Regulation U providing for bank credit to block positioners w hich is exem pt from the norm al m argin requirem ents as prescribed from time to tim e in th a t regulation. (b) The first question pertained to the period of tim e in w hich a block positioner, in order to qualify for the exemption, m ust position a block of stock w hen such positioning results from several transactions at approxim ately the same tim e from a single source, as set forth in section 221.3 (z) (2 ) (ii). (c) T he Board is of the view that the aggregate of several transactions from a single source w ould ordinarily be carried out w ithin a tim e span of one half ho u r in order for such aggregate to be con sidered one block of stock eligible for exempt credit. In extraordinary circum stances, however, the block positioner could consult the Reserve Bank in whose district its office is situated as to w hether stock positioned over a slightly longer period constitutes a single block. In such a case the block positioner should, of course, disclose all relevant circum stances to the Reserve Bank. (d ) T he second question related to the com pu tation of the period of tw enty business days, speci fied in section 2 2 1 .3 (z )( 3 ), in w hich exempt credit may rem ain outstanding for positioning a block of stock. (e) The Board is of the view that the com puta tion of such 20-day period shall com m ence on the business day following the date of trade. 1 1 /1 3 /7 2 * * * * *
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