Federal Reserve Bank of Dallas. "Amendments to Regulations G and U, Circular No. 69-218," District Notices (Federal Reserve Bank of Dallas) (August 22, 1969). https://fraser.stlouisfed.org/title/5569/item/544214, accessed on May 7, 2025.

Title: Amendments to Regulations G and U, Circular No. 69-218

Date: August 22, 1969
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image-container-0 FEDER AL RESERVE BANK OF DALLAS DALLAS, TEXAS 7 5 2 2 2 Circular Wo. 69-218 August 22, 1969 AMENDMENTS TO REGULATIONS G AND U To All Banks, Nonbank Lenders and Others Concerned in the Eleventh Federal Reserve District The Board of Governors of the Federal Reserve System amended, effective August 13, 19^9, Section 207. M f ) of Regulation G and Section 221.3(x) of Regulation U. Copies of the amendments and explanatory material are enclosed. Yours very truly, P. E. Coldwell President Enclosures (2) publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
image-container-1 TITLE 12 — BANKS AND BANKING CHAPTER II — FEDERAL RESERVE SYSTEM SUBCHAPTER A — BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM [Regulation G] PART 207 — SECURITIES CREDIT BY PERSONS OTHER THAN BANKS, BROKERS, OR DEALERS 1. Effective August 13, 1969, § 207.4(f) is amended to read as follows: Section 207.4 Miscel laneous provisions. (f) Combined purchase of mutual funds and insurance. (1) An extension of purpose credit pro vided for in a plan, program, or investment con tract that is registered with the Securities and Exchange Commission under the Securities Act of 1933 (15 U.S.C. 77) and provides for the acquisi tion of both of a security issued by an investment company described in § 207.2(d)(5) and of an in surance policy or contract shall be subject to all the provisions of this part, except that, where the credit is secured by the security and does not exceed the premium on such policy (plus any ap plicable interest), the maximum loan value of such security shall be 40 per cent of its current market value, as determined by any reasonable method. (2 ) Sections 207.1(c), (d), (f), (g), (h), (i), and (j) of this part shall not apply to any credit extended to a person registered pursuant to § 207.1(a) who extends credit pursuant to subparagraph (1) of this paragraph, Provided, That: (i) the credit extended pursuant to this sub paragraph is secured by securities that are issued by an investment company described in § 207.2(d)(5), and are carried for the ac count of one or more customers under a plan, program, or investment contract de scribed in subparagraph (1) of this para graph (and the person extending such credit receives written notice from the recipient of the credit to this effect); and (ii) the provisions of such plan, program, or investment contract conform to the provi sions of Rule 15c2-l of the Securities and Exchange Commission concerning hypothe cation of customers’ securities (17 CFR 240.15c2-l). 2a. Section 207.4(f) has been amended to add a new subparagraph (2) to permit a person to extend exempt credit, in connection with the wholesale financing of equity funding plans or programs, to persons registered pursuant to § 207.1(a) who ex tend credit in accordance with § 207.4(f)(1). To qualify for the exemption the credit must be secured by customers’ securities which are issued by an investment company described in § 207.2(d)(5), i.e., certain mutual fund shares, pledged in con formity with the provisions of a rule of the Secu rities and Exchange Commission regarding hypo thecation of customers’ securities, and accompanied by a statement received by the person extending the credit that such securities are carried for the account of one or more customers under an equity funding plan, program, or investment contract. b. The provisions of section 553 of Title 5, United States Code, relating to notice, public par ticipation, and deferred effective dates, were not followed in connection with this amendment. The effect of the amendment is to avoid duplication of margin requirements. In the circumstances, the Board found that following such procedures would result in delays that would be contrary to the pub lic interest and serve no useful purpose. Adopted August 13, 1969. By order of the Board of Governors. (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Deputy Secretary. ( S E A L )
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Date: August 22, 1969
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Amendments to Regulations G and U Effective 8-13-69
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