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Federal R eserve Bank OF DALLAS WILLIAM H. WALLACE DALLAS, TEXAS 7 5 2 2 2 F IR S T V ICE P R E S ID E N T February 14, 1985 Circular 85-24 TO: The Chief Executive Officer of all depository institutions in the Eleventh Federal Reserve District SUBJECT Clarification of Rules G-12 and G-15 of the Municipal Securities Rule-making Board, effective February 1, 1985. DETAILS The provisions of rule G-12 apply to transactions between municipal securities brokers and dealers and the provisions of rule G-15 apply to transactions effected on a delivery vs. payment or receipt vs. payment basis between municipal securities brokers or dealers and customers. Rule G-12 requires dealers to settle via book-entry through a securities depository and Rule G-15 requires that a dealer settle transactions for their customers against payment through a securities depository if under the following conditions: 1. The securities must be eligible for book-entry settlement through a depository (or through interfaced or otherwise linked depositories, if two depositories are to be used on the transaction); and 2. Both of the parties to the transaction must be participants (whether directly themselves or indirectly through a clearing agent used on the transaction) in the depository (or in the interfaced or otherwise linked depositories). Since the Federal Reserve Bank is not a depository participant, the book-entry settlement requirements of the rules would not apply and transactions could be settled by physical delivery of securities. Further, neither rule requires that you join a depository or establish a clearing arrangement with a depository participant. For additional copies of any circular please contact the Public Affairs Department at (214) 651-6289. Banks and others are encouraged to use the following incoming WATS numbers in contacting this Bank (800) 442-7140 (intrastate) and (800) 527-9200 (interstate). This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - MORE INFORMATION For further information, please contact Lynn Vick, (214) 651-6263 at the Head Office; Robert W. Schultz, (915) 544-4730 at the El Paso Branch; Luke E. Richards (713) 659-4433 at the Houston Branch; or Tony Valencia, (512) 224-2141 at the San Antonio Branch. Sincerely yours,
@FedFRASER