View PDF

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

F ederal

reserve bank of

DALLAS, TEXAS

Dallas

75222

Cir cular No. 6 9 -IT2
July 11, 1969

LIST OF OTC MARGIN STOCKS

To All Banks, Brokers/Dealers,
Nonbank Lenders and Others Concerned
in the Eleventh Federal Reserve District:

Attached is a copy of the press release of the Board
of Governors of the Federal Reserve System concerning the "overthe-counter" stocks that will be subject to margin regulations.
A copy of the list was sent to you on July J ,

1969, with our

Circular No. 6 9 -1 6 7 . Additional copies of the list will be
furnished upon request.
Yours very truly,

P. E. Coldwell
President
Enclosure (l)

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

k
ยง

F E D E R A L
press

R E S E R V E

release

July 7, 1969

For immediate release

The Board of Governors of the Federal Reserve System today
published the attached list of about 290 "over-the-counter" stocks
that will become subject to its margin regulations beginning at the
opening of business tomorrow (July 8).
Margin regulations generally limit the amount of credit a
person or firm may obtain to buy or carry securities.

Stocks on the

OTC list will be subject to the same 80 per cent margin requirements
as stocks listed on national exchanges. This means a person or firm
buying a stock on credit must make a down payment of 80 per cent of
the purchase price and can obtain credit for the remaining 20 per
cent.

The margin requirement to purchase or carry bonds convertible

into margin stocks is 60 per cent.
In the past, only stocks listed on national exchanges were
subject to margin requirements as were bonds convertible into listed
stocks.

Pursuant to an Act (P.L. 90-437) adopted by Congress last

year, the Board amended its margin Regulations G, T and U to include
"over-the-counter" stocks that have characteristics similar to stocks
registered on national exchanges.
Amendments to Regulations G, T and U, including the criteria
used to select the OTC margin stocks, were issued by the Board on
June 9 with an effective date of July 8.

Regulation G applies to

credit provided by persons other than banks, brokers or dealers to

purchase or carry equ ity securities; Reg u l a t i o n T concerns credit b y
b r o k e r s , dealers and memb ers of national securities exchanges for
the same purpose; R e g u lat ion U applies to credit b y banks.
M a r g i n requirements o n O T C stocks apply only to loans made
on J uly 8 and thereafter.

Lo ans m ade prior to that d ate are unaffected

by the new amendments.
Three changes must be m ade in the attached list to bring It
up to date:

Wadd ell & Reed,

Inc., Class A, common (non-voting) has

b e e n acquired by another firm and has b e e n deleted from the list;
Commonwealth Life Ins. Co.

(Ky.) $1.00 par conmon has b e e n changed to

Capital Ho lding Co. $1.00 par common; W e s t e r n Pennsylvania N ational
Bank,

$5.00 par value,

comm on capital, has b een changed to WPNB

Co rporation $5.00 par common.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102