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Federal R eserve Bank
OF DALLAS
ROBERT

D. M C T E E H , J R .

P R E S ID E N T

D ALLAS, TE XAS

A N p C H IE F E X E C U T IV E O F F IC E R

March 31, 1995

75265-5906

Notice 95-32

TO:

The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District

SUBJECT
Slipsheet Amendments for Regulation DD
(Truth in Savings), the Official Staff Commentary
on Regulation DD, Regulation K (International
Banking Operations), Regulations G, T, and U
(Securities Credit Transactions)
DETAILS
The Board of Governors of the Federal Reserve
System has published slipsheet amendments for Regulation
DD, effective March 21, 1993, and September 23, 1994; the
Official Staff Commentary on Regulation DD, effective Sep­
tember 23, 1994; Regulation K, effective January 1, 1995; and
Regulations G, T, and U, effective October 11, 1991, and
November 25, 1994.
The slip sheets should be inserted in the appropriate
section of your regulations binder.

F or additional copies, bankers and others are encouraged to use one of the following toll-free
num bers in contacting the Federal Reserve Bank of Dallas: Dallas Office (800) 333-4460;
El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; H ouston Branch Intrastate
(800) 392-4162, Interstate (800) 221-0363; San A ntonio Branch Intrastate (800) 292-5810.

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

ENCLOSURES
The revised slip sheets and a revised index for your
regulations binder are enclosed.
MORE INFORMATION
For more information regarding Regulation DD or
Regulations G, T, and U, please contact Eugene Coy (214)
922-6201. For more information regarding Regulation K, please
contact Rick Neal, (214) 922-6272, at the Dallas Office, or Randy
Steinley, (713) 652-9117, at the Houston Office.
For additional copies of this Bank’s notice, the revised
slip sheets, or the revised index, please contact the Public Affairs
Department at (214) 922-5254.
Sincerely yours,
£>■

■

Board of Governors of the Federal Reserve System

A m endm ents to Regulation DD
Truth in Savings
January 1995*

1. E ffe c tiv e S e p te m b e r 23, 1994, se c tio n
230.2(a) is am en d ed by deleting the last
sentence.

2. E ffe c tiv e S e p te m b e r 23, 1994, se c tio n
230.2(h) is a m en d ed by deleting the se c ­
o n d sentence.

3 . E ffe c tiv e M a r c h 21, 1 9 9 3 , s e c tio n
230.4(c)(1) is am en d ed by extending both
the m andatory com pliance date a n d ;-<?
notice requirem ent date fro m M arch 21,
1993, to June 21, 1993.

4. E ffe c tiv e M a r c h 21, 1 9 9 3 , s e c tio n
230.5(a)(2)(ii) is a m ended by deleting the
words “b y third p a r tie s ”.

(2) Indoor signs.
(i) Signs inside the prem ises o f a de­
pository institution (or the prem ises
o f a deposit broker) are not subject
to paragraphs (b), (c), (d), or (e)(1)
o f th is s e c tio n u n le s s th e y face
outside the prem ises and can reason­
ably be view ed by a consum er only
from outside the prem ises. '
(ii) If a sign exem pt by this para­
g ra p h s ta te s a ra te o f re tu rn , it
shall—
(A ) State the rate as an “ annual
percentage yield ,” using that term
or the term “ A P Y .” T he sign shall
not state any other rate, except that
the interest rate m ay be stated in
conjunction w ith the annual per­
centage yield to w hich it relates.
(B ) C ontain a statem ent advising
consum ers to contact an em ployee
for further inform ation about appli­
cable fees and term s.

5. E ffective M arch 21, 1993, section 230.8(e)
is revised to read as fo llo w s:
(e) E xem ption f o r certain advertisem ents.
(1) C ertain m edia. If an advertisem ent
is m ade through one o f the follow ing
m edia, it need not contain the inform a­
tion in paragraphs (c)(1), (c)(2), (c)(4),
(c)(5), (c)(6)(ii), (d)(4), and (d)(5) o f
this section:
(i) b ro a d c a st o r e le c tro n ic m ed ia,
such as television or radio;
(ii) o u td o o r m e d ia , su c h a s b ill­
boards; or
(iii) telephone response m achines.
*
A c o m p le te R e g u la tio n D D , as a m e n d e d e ffe c tiv e S e p ­
te m b e r 2 3 , 1994, c o n s is ts o f —
• th e p a m p h le t d a te d N o v e m b e r 1992 (se e in sid e c o v e r)
and
• th is slip sheet.
Ite m s 1, 2 , a n d 19 a re new . T h e o th e r ite m s w e re in c lu d e d
in th e J u ly 1993 s lip sheet.

6. E ffective M arch 21, 1993, a p p e n d ix A,
p a rt II is am ended by adding a new p a ra ­
graph A heading after the seco n d p a ra ­
graph; by corrrecting a ll fo u r fo rm u la s
under paragraph A to a d d an open paren­
thesis a fte r the fir s t bracket; a n d by a d ­
ding a new p a rt B a fte r exam ple (3), as
fo llo w s:

Part II. Annual Percentage Yield
Earned for Periodic Statements
*

*

*

*

*

T h e a n n u a l p e rc e n ta g e y ield earn e d
shall be calculated by using the follow ing
form ulas ( “ A PY earn ed ” is used for con­
venience in the form ulas):
1

R egulation DD

“ C o m pounding” is the num ber o f days in
each com pounding period.

A. G eneral F orm ula
APY earned = 100
[(1 + Interest earned/
B alance )(365/D in!>r'od, ays e
*

*

*

*

1]

*

Exam ples:

(i)* * *
APY earned = 100
[(1 + 5.25/1,000),36™>
- 1]
APY earned = 6.58%

A ssum e an institution calculates interest
for the statem ent period using the dailybalance m ethod, pays a 5.00 percent inter­
est rate, com pounded annually, and pro­
v id e s p e r io d ic s ta te m e n ts fo r e a c h
m onthly cycle. T he account has a daily
balance o f $1,000 for a 30-day statem ent
period. T he interest earned is $4.11 for
the p e rio d , and the an n u al p e rce n ta g e
y ield earned (using the special form ula
above) is 5.00 percent:
A PY E arned = 100

(2 ) * * *

([1

APY earned = 100
[(1 + 6.50/1,500)'-16M
01
-

1]

APY earned = 5.40%
-

(3) * * *

1}

A PY E arned = 5.00%

APY earned = 100
[(1 + 21/2,000)<365/9n
-

1]

TRUTH IN SAVINGS ACT

APY earned = 4.28%

B. Special Formula f o r Use Where
Periodic Statem ent Is Sent More
Often Than the P eriod f o r Which In­
terest Is Com pounded
In stitu tio n s th a t use the d a ily -b a la n c e
m ethod to accrue interest and that issue
periodic statem ents m ore often than the
period for w hich interest is com pounded
shall use the follow ing special form ula:

The fo llo w in g sections were am en d ed by the
H ousing a n d C om m unity D evelopm ent A ct o f
1992 (Pub. L. No. 102-550):

7. The fir s t sentence in section 263(a) is re­
vised to read as fo llo w s:
(a) In general. E xcept as provided in sub­
sections (b) and (c), each advertisem ent,

APY Earned = 100

*

([(1

*

*

/ Interest earned \ \

(
\

B alance

/ I

D ays in period /

(C om pounding I

\ 1 365/C om pounding

- 1!
T he follow ing definition applies for use in
this form ula (all o ther term s are defined
under part II):

8. Section 263 is am en d ed by adding a new
p a ragraph (c), as fo llo w s, a n d redesignat­
ing the old paragraphs (c) a n d (d) as (d)
a n d (e), respectively:
(c) D isclosure required f o r on-prem ises
displays.
(1) T he d isclo su re req u irem en ts c o n ­
tained in this section shall not apply to

Regulation DD

any sign (including a rate board) dis­
closing a rate or rates o f interest which
is displayed on the prem ises o f the de­
p o s ito ry in s titu tio n i f s u c h sig n
contains—
(A ) the acco m p an y in g annual p e r­
centage yield; and
(B ) a statem ent that the co n su m er
sh o u ld re q u est fu rth e r in fo rm atio n
from an em ployee o f the depository
in stitution concerning the fees and
term s a p p lic ab le to the a d v ertised
account.
(2) For purposes o f paragraph (1), a
sign shall only be considered to be dis­
played on the prem ises o f a depository
institution if the sign is designed to be
view ed only from the interior o f the
prem ises o f the depository institution.

9.

The f ir s t se n te n c e o f se c tio n 2 6 5 is
a m ended by changing the w ord "A c t" to
‘‘subtitle ”,

10. S e ctio n 266(e) is a m e n d ed to read as
fo llo w s:
(e) N otice to account holders as o f the
effective date o f regulations. For any ac­
count for w hich the depository institution
delivers an account statem ent on a quar­
terly or m ore frequent basis, the deposi­
tory institution shall include on or w ith
the first regularly scheduled m ailing sent
after the end o f the 6-m onth period begin­
ning o f the date o f publication o f regula­
tions issued by the B oard in final form , a
statem ent that the account holder has the
right to request an account schedule con­
taining the term s, charges, and interest
rates o f the account, and that the account
holder m ay w ish to request such an ac­
count schedule.

11. Section 267(a) a n d (c) are am ended by
changing the w ord “A c t ” to “su b title ”.

12. Section 269(a)(1), (3), a n d (4), a n d se c ­

tion 269(b)(1) a n d (2) are am en d ed by
changing the w ord “A c t ” to “su b title ”.

13. Section 269(a)(2) is am ended by changing
the effective date o f the regulations fro m
6 m onths to 9 m onths a fte r publication o f
the fin a l regulations.

14. Section 270(a), (b), a n d (c) are am ended
by changing the w ord “A c t ” to “subtitle".

15. Section 271(a), (c)(1), (c)(2), (d), (g),
(h)(1), (i)(l), a n d (i)(2) are am ended by
changing the w ord “A c t" to “subtitle".

16. Section 272(a) a n d (b) are am ended by
changing the w ord “A c t" to “su b title ”.

17. Section 273 is am ended by changing the
w ord “A c t" to “su b title ”.

18. Section 274 is am ended by changing the
w ord “A c t" to “subtitle".

The fo llo w in g section was am ended by the
R iegle C om m unity D evelopm ent a n d R egula­
tory Im provem ent A ct o f 1994 (Pub. L. No.
103-325):

19. Section 27 4 (1 ) is a m e n d ed to read as
fo llo w s:
(1) T he term “ a cco u n t” m eans any ac­
count intended for use by and generally
used by consum ers prim arily for personal,
fam ily, or household purposes that is of­
fe re d by a d e p o sito ry in stitu tio n into
w hich a custom er deposits funds, includ­
ing dem and accounts, tim e accounts, ne­
g o tia b le o rd e r o f w ith d raw al accounts,
and share draft accounts.
3

Board of Governors of the Federal Reserve System

Amendments to the Official Staff Commentary
on Regulation DD, Truth in Savings
January 1995*

1. E ffective S e p te m b e r 23, 1994, c o m m en t
2(h)(5) is deleted.
*
T h e c o m p le te c o m m e n ta ry , a s a m e n d e d e ffe c tiv e S e p ­
te m b e r 2 3 , 1994, c o n s is ts o f —
• th e p a m p h le t d a te d O c to b e r 1 9 9 4 (se e in sid e c o v e r) a n d
• th is s lip sh eet.

Board of Governors of the Federal Reserve System

Amendments to Regulation K
International Banking Operations
January 1995*

1. E ffe c tiv e J a n u a r y I. 1995, s e c tio n
2 1 1.21(e) is am ended to read as fo llo w s:
(e) C hange the status o f an office m eans
c o n v e rt a re p re se n ta tiv e office in to a
branch or agency, or an agency into a
branch, but does not include renew al o f
the license o f an existing office.

2. E ffective January /, 1995, section 211.29
is added as follow s:

SECTION 211.29— Applications by
State-Licensed Branches and
Agencies to Conduct Activities Not
Permissible for Federal Branches
(a) Sco p e. A s ta te -lic e n s e d b ra n c h or
agency shall file w ith the Board a prior
w ritten application for perm ission to en­
gage in or continue to engage in any type
o f activity that—
(1) is not p e rm issib le for a federal
branch, pursuant to statute, regulation,
official bulletin or circular, or order or
interpretation issued in w riting by the
Office o f the C om ptroller o f the C ur­
rency; or
(2) is rendered im perm issible due to a
subsequent change in statute, regula­
tion, official bulletin or circular, w ritten
order or interpretation, or decision o f a
court o f com petent jurisdiction.
(b) E xceptions. N o application shall be
re q u ire d by a sta te -lic en sed bran ch or
agency to conduct any activity that is oth­
erw ise perm issible under applicable state
and federal law or regulation and that—
*
A c o m p le te R e g u la tio n K, as a m e n d e d e ffe c tiv e Ja n u ­
a ry 1, 1995, c o n s is ts o f —
• the re g u la tio n p a m p h le t d a te d Ja n u a ry 1994 (se e in sid e
co v e r) and
• th is s lip sheet.

(1) has been determ ined by the FDIC
pursuant to 12 C FR 3 6 2 .4 (c )(iH ii)(A )
not to present a significant risk to the
affected deposit insurance fund;
(2) is p erm issible for a federally li­
censed branch but the O C C im poses a
quantitative lim itation on the conduct o f
such activity by the federal branch;
(3) is conducted as agent rather than as
principal, provided that the activity is
one that could be conducted by a statec h artere d bank h e ad q u a rte red in the
sam e state in w hich the b ra n ch or
agency is licensed; or
(4) any o ther activity that the B oard
has determ ined m ay be conducted by
any state-licensed branch or agency of
a foreign bank w ithout further applica­
tion to the Board.
(c) C ontents o f application. An applica­
tion subm itted pursuant to paragraph (a)
o f this section shall be in letter form and
shall contain the follow ing inform ation:
(1) a brief description o f the activity,
including the m anner in w hich it will
be conducted and an estim ate o f the ex­
pected d o lla r volum e associated w ith
the activity;
(2) an analysis o f the im pact o f the
proposed activity on the condition o f
the U.S. operations o f the foreign bank
in general and o f the branch or agency
in particular, including a copy, if avail­
able, o f any feasibility study, m anage­
m ent plan, financial projections, busi­
n e ss p la n , o r s im ila r d o c u m e n t
concerning the conduct o f the activity;
(3) a re s o lu tio n by the a p p lic a n t’s
board o f directors or, if a resolution is
not required pursuant to the applicant’s
organizational docum ents, evidence o f
approval by sen io r m anagem ent, au­
thorizing the conduct o f such activity
and the filing o f this application;
1

Regulation K

(4) if the activity is to be conducted by
a state-licensed insured branch, a state­
m ent by the applicant o f w hether or not
it is in com pliance with 12 CFR 346.19
and 346.20. Pledge o f A ssets, and A s­
set M aintenance, respectively;
(5) if the activity is to be conducted by
a state-licensed insured branch, state­
m ents by the applicant—
(i) that it has com plied w ith all re­
quirem ents o f the Federal D eposit In­
surance C o rp o ratio n con cern in g an
ap p licatio n to co n d u ct the activity
and the status o f the application, in­
cluding a copy o f the F D IC ’s dispo­
sition o f such application, if avail­
able. and
(iiy explaining w hy the activity will
pose no significant risk to the deposit
insurance fund; and
(6) any o ther inform ation that the R e­
serve B ank deem s appropriate.
(d) F actors considered in determ ination.
(1) T he B oard shall consider the fol­
low ing factors in determ ining w hether a
p ro p o se d a c tiv ity is c o n siste n t w ith
sound banking practice:
(A ) the types o f risks, if any, the ac­
tivity poses to the U.S. operations o f
the foreign banking organization in
general and the branch or agency in
particular;
(B ) if the activ ity poses any such
risks, the m agnitude o f each risk; and
(C ) if a risk is not de m inim is, the
actual or proposed procedures to con­
trol and m inim ize the risk.
(2) E ach o f the fa cto rs set forth in
paragraph (d)(1) o f this section shall be
e valuated in light o f the financial con­
dition o f the foreign bank in general
and the branch or agency in particular
and the volum e o f the activity.
(e) A pp lica tio n procedures. A pplications
pursuant to this section shall be filed with

the responsible Reserve Bank for the for­
eign bank. An application shall not be
deem ed com plete until it contains all the
in fo rm a tio n re q u este d by the R eserve
B ank and has been accepted. A pproval of
such an application m ay be conditioned
on the applicant’s agreem ent to conduct
the activity subject to specific conditions
or lim itations.
( 0 Divestiture o r cessation.
(1) In the event that an a p p lican t's ap­
plication for perm ission to continue to
conduct an activity is not approved by
the Board or, if applicable, the FDIC,
the applicant shall subm it a detailed
w ritten plan o f divestiture or cessation
o f the activity to the responsible Re­
serve Bank w ithin 60 days o f the disap­
proval. The divestiture or cessation plan
shall describe in detail the m anner in
w hich the applicant will divest itself o f
or cease the activity and shall include a
projected tim etable describing how long
the divestiture or cessation is expected
to take. D ivestitures or cessation shall
be com plete w ithin one year from the
date o f the disapproval, or w ithin such
sh o rter period o f tim e as the B oard
shall direct.
(2) In the event that a foreign bank op­
e r a tin g a s ta te b ra n c h o r a g e n c y
chooses not to apply to the B oard for
perm ission to continue to conduct an
activity that is not perm issible for a
federal branch or w hich is rendered im ­
perm issible due to a subsequent change
in statute, regulation, official bulletin or
circular, w ritten order or interpretation,
or decision o f a court o f com petent j u ­
risdiction. the foreign bank shall subm it
a w ritten plan o f divestiture o r cessa­
tio n , in c o n fo rm a n c e w ith se c tio n
211.29(f)(1), o f this p a n within 60 days
o f the effective date o f this part or of
such change or decision.

Board of Governors of the Federal Reserve Board

Amendments to Regulations G, T, and U
Securities Credit Transactions
January 1995*

REGULATION G

1. E ffective O ctober 11, 1991, section 207.1
is a m e n d ed b y d esig n a tin g the tex t o f
paragraph (b) as paragraph (b)(1) and
adding a new paragraph (b)(2) to read as
fo llo w s:
(2) T h :’, part does not apply to clearing
agencies regulated by the Securities and
Exchange C om m ission o r the C om m od"v
Futures T rading C om m ission that accept
deposits o f m argin stock in connection
w ith—
(i) the issuance of, or guarantee of, or
the clearance o f transactions in, any se­
curity (including options on any secur­
ity, certificate o f deposit, securities in­
dex or foreign currency); or
(ii) the guarantee o f contracts for the
purchase or sale o f a com m odity for fu­
tu re d e liv e ry o r o p tio n s o n s u c h
contracts.

2. E ffe ctiv e O c to b er 11, 1991, p a ra g ra p h
(l)(l)(i) and (ii) a n d paragraph (3) o f se c ­
tion 207.3 are revised to read as fo llo w s:
(/) Transfers o f credit.
(1) A transfer o f a credit betw een cus­
tom ers or lenders or betw een a lender
and a bank shall not be considered a
new extension o f credit if—
(i) the original credit w as extended
by a lender in com pliance w ith this
part or w as extended by a bank in a
*
T h e c o m p le te set o f m arg in reg u la tio n s , as a m e n d e d
e ffe c tiv e N o v e m b e r 2 5 , 1994, c o n s is ts o f—
• th e re g u la tio n p a m p h le t d a te d M ay 1 9 9 0 ( se e in sid e
c o v e r) a nd
• th is s lip sheet.
Ite m s 3 - 1 2 a n d 14 are new . T h e o th e r ite m s w ere in clu d e d
in th e O c to b e r 1991 s lip sh eet.

m an n er th at w ould h ave co m p lied
w ith this part;
(ii)
the transfer is not m ade to evade
this part o r part 221 o f this chapter;
*

*

*

*

*

(3) W hen a tra n s fe r is m ade betw een
lenders o r betw een a lender and a bank,
the transferee shall obtain a copy o f the
Form FR G -3 or Form FR U -l originally
filed w ith the transferor lender and retain
the copy w ith its records o f the transferee
account. If no form w as originally filed
w ith the transferor, the transferee m ay ac­
cept in good faith a statem ent from the
transferor describing the purpose o f the
loan and the collateral securing it.

REGULATION T

3. E ffe c tiv e N o v e m b e r 25, 1994, se c tio n
2 2 0 .1 (b ) is a m e n d e d by c h a n g in g the
w ord “se v e n " to “e ig h t" in paragraph
(1), and a new paragraph (3) is a dded as
fo llo w s:
(3) T his part does not apply to transac­
tions betw een a custom er and a broker or
dealer registered only under section 15C
o f the act.

4. E ffe c tiv e N o v e m b e r 25, 1994, se c tio n
220.2(h) is am ended to read as fo llo w s:
(h) E xam ining authority m eans—
(1) the national securities exchange or
national securities association o f which
a creditor is a m em ber; or
(2) if a m em ber o f m ore than one selfregulatory organization, the organiza1

R egulations G, T, U

tion designated by the SEC as the e x ­
am ining authority for the creditor.

5. E ffective N ovem ber 25, 1994, a new se c ­
tion 220.2(w ) is a dded as fo llo w s, a n d the
existing paragraphs (w) through (aa) are
redesignated as (x) through (bb):
(w) P aym ent p e rio d m eans the num ber o f
business days in the standard securities
settlem ent cycle in the U nited States, as
defined in SE C Rule 15c6-l under the act,
plus tw o b u sin e ss days. U ntil Ju n e 1,
1995, paym ent period m eans seven busi­
ness days.

6. E ffe c tiv e N o v e m b e r 25, 1994, se c tio n
220.4(c)(3) is am en d ed to read as fo llo w s:
(3) Time limits.
(i) A m arg in c all shall be sa tisfie d
w ithin one pay m en t p eriod a fte r the
m a rg in d e fic ie n c y w a s c r e a te d o r
increased.
(ii) T he paym ent p eriod m ay be e x ­
tended for one or m ore lim ited periods
upon application by the creditor to its
exam ining authority unless the exam in­
ing authority believes that the creditor
is not acting in good faith or that the
c reditor has not sufficiently determ ined
that exceptional circum stances w arrant
such action. A pplications shall be filed
and acted upon prior to the end o f the
paym ent period or the expiration o f any
subsequent extension.

7. E ffe c tiv e N o v e m b e r 25, 1994, se c tio n
220.4(d) is am en d ed by changing $500 to

$ 1,000.

8. E ffe c tiv e N o v e m b e r 25, 1994, se c tio n
2 2 0 .8 (b )( 1 )(i) a n d (ii) is a m e n d e d by
c h a n g in g the p h r a s e “se v e n b u sin e ss
d a y s" to “one p a y m en t perio d ".
2

9.

E ffe c tiv e N o v e m b e r 25, 1994, se c tio n
2 2 0 .8 (b ) ( 3 ) is a m e n d e d to r e a d as
fo llo w s:
(3) Shipm ent o f securities, extension. If
any shipm ent o f securities is incidental to
consum m ation o f a transaction, a creditor
m ay extend the paym ent period by the
num ber o f days required for shipm ent, but
by not m ore than one additional paym ent
period.

10. E ffe c tiv e N o v e m b e r 25, 1994, se c tio n
220.8(b)(4) is am en d ed by changing $500
to $1,000.

11. E ffe c tiv e N o v e m b e r 25, 1994, se c tio n
220.8(c)(2) is am en d ed to read as fo llo w s:
(2) T he 90-day freeze shall not apply if
(i) w ithin the p eriod specified in para­
graph (b)(1), full paym ent is received or
any check or draft in paym ent has cleared
* * *

12. E ffe c tiv e N o v e m b e r 25, 1994, se c tio n
220.8(d)(1) a n d (2) is am ended to read as
fo llo w s:
(1) U nless the c red ito r’s exam ining au­
thority believes that the c red ito r is not
acting in good faith * * *
(2) A pplications shall be filed and acted
upon prior to the end o f the paym ent p e ­
riod, o r in the case o f the purchase o f a
foreign security w ithin the period speci­
fied in paragraph (b )(l)(ii) o f this section,
o r th e e x p ira tio n o f any su b s e q u e n t
extension.

13. E ffective O ctober 11, 1991, the section
h e a d in g a n d p a ra g ra p h (b) o f sectio n
220.14 are revised to read as fo llo w s:

R egulations G, T, U

SECTION 220.14— Clearance of
Securities, Options, and Futures

(b) D eposit o f securities with a clearing
agency. The provisions o f this part shall
not apply to the deposit o f securities with
an options or futures clearing agency for
the purpose o f m eeting the deposit re­
quirem ents o f the agency if—
(1) the clearing agency—
(i) issu e s, g u a ra n te e s p e rfo rm a n ce
on, or clears transaction in. any se­
curity (including options on any se­
curity, certificate o f deposit, securi­
ties index or foreign currency); or
(ii) guarantees perform ance o f con­
tracts for the purchase or sale o f a
com m odity for future delivery or o p ­
tions on such contracts;
(2) the clearin g agency is registered
w ith the Securities and Exchange C om ­
m ission or is the clearing agency for a
contract m arket regulated by the C om ­
m odity Futures T rading C om m ission;
and
(3) the deposit consists o f any m argin
security and com plies w ith the rules of
the clearing agency that have been ap­
proved by the Securities and Exchange
C om m ission or the C om m odity Futures
T rading C om m ission.

14. E ffective N ovem ber 25, 1994, a new se c ­
tion 220.18 is added as follow s, a n d the
existing section 220.18 is redesignated as
section 220.19:

SECTION 220.18— Government
Securities Account

In a g o v e rn m e n t se c u rities acc o u n t, a
creditor may effect and finance transac­
tio n s in v o lv in g g o v e rn m e n t se c u ritie s,
provided the transaction is not prohibited
by section 15C o f the act or any rule
thereunder.

REGULATION U

15. E ffective O cto b er 11, 1991, p a ra g ra p h
(l)(I)(i) a n d (ii) a n d paragraph (3) o f sec­
tion 221.3 are revised to read as follow s:
(i) Transfers o f credit.
(1) A transfer o f a credit betw een cus­
tom ers or banks or betw een a bank and
a lender subject to part 207 o f this
chapter shall not be considered a new
extension o f credit if—
(i) the original credit w as extended
by a bank in com pliance w ith this
part or by a lender subject to part
207 o f this chapter in a m anner that
w ould have com plied w ith this part;
(ii) the transfer is not m ade to evade
this part o r part 207 o f this chapter;
*

*

*

*

*

(3) W hen a transfer is m ade betw een
banks or betw een a bank and a lender
subject to part 207 o f this chapter, the
transferee shall obtain a copy o f the
F orm FR U -l or Form FR G-3 origi­
nally filed w ith the transferor and retain
the copy w ith its records o f the trans­
feree account. If no form was originally
filed w ith the transferor, the transferee
m ay accept in good faith a statem ent
from the transferor describing the pur­
pose o f the loan and the collateral se­
curing it.

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