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FEDERAL RESERVE BANK OF NEW YORK Circular No. 1 4 4 6 "I October 12, 1934 J INTERPRETATION OF REGULATION T To National Securities Exchanges in the Second Federal Reserve District: For your information I quote below the text of a telegram which I have received today from the Federal Reserve Board: Ruling No. 18 Interpreting Regulation T. In response to an inquiry the Federal Reserve Board has advised that, if the adjusted debit balance of an account which has been designated as an "old account" pursuant to section 7(a) of Regulation T, is reduced by reason of a sale of securities or otherwise, the creditor may not thereafter permit the customer to make any transaction which would result in an increase in the adjusted debit balance except a withdrawal of money made in conformity with the third proviso of section 7(a) of Regulation T. In this connection the Board called attention to the fact that a transaction which would result in an increase in the adjusted debit balance if standing alone is not prohibited by section 7(a) if it is part of a "combination of transactions" which results in no increase in the adjusted debit balance. Additional copies of this circular will be furnished upon request. J. H. CASE, Federal Reserve Agent.
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