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F ederal
reserve
Ba n k
DALLAS, TEXAS
of
Dallas
75222
Circular No. 73-135
June 7, 1973
AMENDMENT TO REGULATION M
To All Member Banks and Others Concerned
in the Eleventh Federal Reserve District:
On May 2 b , 1973? we forwarded to you under Circular Letter
No. 73-127 an amendment- to Section 213.7 of Regulation M, effective
June 21, 1973. On May 31? 1973? the Board amended Section 213.7("b)
to exclude from the computation of reserve requirements certain
types of credit extended to United States residents. This amendment
is also effective June 21, 1973Please remove the amendment forwarded on May 2 b , and
insert the enclosed amendment to Regulation M in the ring binder
of bulletins and regulations furnished by this Bank.
Yours very truly,
P. E. Coldwell,
President
Enclosure
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
FO R E IG N AC TIV IT IE S OF N A TIO N A L B A N K S
A M E N D M E N T TO REGULATION M f
Effective June 21, 1973, § 213.7 is amended to
read as follows:
beginning with the period ending on August 1,
1973, until such reserve-free base is exhausted.
(b) Credit extended to United States residents.
During each week of the four-week period be
ginning June 21, 1973, and during each week of
each successive four-week maintenance period, a
(a)
Transactions with parent bank. During each member bank having one or more foreign branches
week of the four-week period beginning June 21,
shall maintain with the Reserve Bank of its dis
1973, and during each week of each successive
trict, as a reserve against its foreign branch de
four-week ( “maintenance”) period, a member
posits, a daily average balance equal to 8 per cent
bank having one or more foreign branches shall
of the daily average credit outstanding from such
maintain with the Reserve Bank of its district, as
branches to United States residents8 (other than
a reserve against its foreign branch deposits, a
assets acquired and net balances due from its
daily average balance equal to 8 per cent of the
domestic offices) during the four-week computa
daily average total of
tion period ending on the Wednesday fifteen days
before the beginning of the maintenance period:
(1) net balances due from its domestic offices
Provided, That this paragraph does not apply to
to such branches, and
credit extended (1) in the aggregate amount of
(2 ) assets (including participations) held by
$100,000 or less to any United States resident, (2)
by a foreign branch which at no time during the
such branches which were acquired from its
computation period had credit outstanding to
domestic offices (other than assets representing
United States residents exceeding $1 million, (3 )
credit extended to persons not residents of the
to enable the borrower to comply with the require
United States), during the four-week computation
ments of the Office of Foreign Direct Investments,
period ending on the Wednesday fifteen days be
Department of Commerce9, or (4 ) under binding
fore the beginning of the maintenance period:
commitments entered into before May 17, 1973.
Provided, That any bank that, under the terms
of § 213.7(a) of Regulation M as in effect prior
to June 21, 19737, was deducting for the computa
7 36 Federal Register 1040; 6826.
tion period ending on May 9, 1973, an earlier
8 (a) Any individual residing (at the time the credit
period’s corresponding daily average total of such
is extended) in any State of the United States or the
“net balances due” or “assets held” (hereinafter
District of Columbia; (b) any corporation, partner
called “reserve-free base”) in calculating its re
ship, association or other entity organized therein
( “domestic corporation”); and (c) any branch or
serve requirements hereunder shall continue to be
office located therein of any other entity wherever
entitled to do so in accordance with the terms of
organized. Credit extended to a foreign branch, office,
such former section, but such reserve-free base
subsidiary, affiliate or other foreign establishment
shall not exceed progressively lower ceilings
(“foreign affiliate”) controlled by one or more such
domestic corporations will not be deemed to be credit
established hereunder by reducing the amount of
extended to a United States resident if the proceeds
its reserve-free base for the computation period
will be used in its foreign business or that of other
ending on May 9, 1973, in ten increments, each
foreign affiliates of the controlling domestic
equal to 10 per cent of its base in such computa
corporation (s).
tion period ending on May 9, 1973, applied con
8 The branch may in good faith rely on the bor
secutively in each succeeding computation period
rower’s certification that the funds will be so used.
SECTION 2 1 3 .7 — RESERVES AGA IN ST
FOREIGN BRANCH DEPOSITS
t For this Regulation to be complete as amended effective June 21, 1973,
retain
1) Printed Regulation pamphlet as amended effective January 7, 1971.
2) This slip sheet.
@FedFRASER