Full text of Federal Reserve Bank of New York Circulars : 5878. Amendment to Regulation H

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F E D E R A L R E S E R V E BA N K
O F NEW YORK

r Circular No. 5 8 7 8 ~1
U September 30, 1966 J

AMENDM ENT TO REGULATION H
Effective August 31, 1966

To the M em ber Banks o f the
Second Federal Reserve D istrict:

Enclosed is a copy of an amendment, effective August 31, 1966,
to Regulation H of the Board of Governors of the Federal Reserve
System. The amendment incorporates into the Regulation the long­
standing rules of the Board with respect to waiving reports of affiliates
of State member banks.
Additional copies of the amendment w ill be furnished upon
request.




A lfred

H ayes,

President.

)

MEMBERSHIP OF STATE BANKING INSTITUTIONS
IN TH E FED ERAL RESERVE SYSTEM
A M E N D M E N T TO R E G U L A T IO N H
(12 CFR P A R T 208)
I ssued b y t h e B oard of G o ver n o r s of t h e F ed er a l R e ser ve S y s t e m

Effective August 31,1966, § 208.9 is amended by adding the follow ­
ing paragrap h :
SE C TIO N 208.9— P U B L IC A T IO N OF R E P O R T S OF
M E M B E R B A N K S A N D T H E IR A F F IL IA T E S
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( c)
W aiver of reports of affiliates.— (1 ) Pursuant to section 21 of
the Federal Reserve A ct (12 U.S.C. 486), the Board o f Governors o f
the Federal Reserve System waives the requirement for the submission
of reports of affiliates of State bank members o f the Federal Reserve
System, except:
(i) W hen indebtedness, if any, of the affiliate to the member
bank has been carried for more than 6 months in the 12 months
preceding the report date as an asset on the bank’s books at a value
in excess of $5,000 or 1 per cent o f the bank’s capital and surplus,
whichever is the greater, regardless of whether the affiliate is so
indebted on the report d a te : Provided, that any indebtedness of
the affiliate to the member bank fu lly secured by direct obligations
of the United States Government or by obligations fu lly guaran­
teed by the United States Government may be disregarded in deter­
mining whether or not the indebtedness o f the affiliate is in excess
of the limitations prescribed herein.
(ii) W hen, on the report date, the affiliate is indebted to the
member bank, or the member bank owns obligations of, or stock
or other evidences of ownership in, the affiliate, and the aggregate
amount o f such indebtedness, obligations, stock, or other evidences
of ownership is carried as an asset on the bank’s books at a value
in excess of $5,000 or 1 per cent of the member bank’s capital and




(o

ver

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surplus, whichever is the greater: Provided, that any indebtedness
o f the affiliate to the member bank fu lly secured by direct obliga­
tions o f the United States Government or b y obligations fu lly
guaranteed by the United States Government may be disregarded
in determining whether or not the indebtedness of the affiliate is
in excess o f the limitations prescribed herein.
(2 ) The B oard of Governors o f the Federal Reserve System also
waives the requirement fo r the submission of reports of affiliates in
all cases (i) where the affiliate relationship is based solely on owner­
ship or control o f any voting shares o f the affiliate b y a member bank
as executor, administrator, trustee, receiver, agent, depositary, or in
any other fiduciary capacity, except where such shares are held fo r
the benefit of all or a m ajority of the stockholders o f such member
bank, and (ii) where the affiliate relationship is based solely on the
fact that a m ajority o f the affiliate’s directors, trustees, or other p er­
sons exercising similar functions are directors o f any one member
bank, except where they constitute more than one-fourth o f the direc­
tors o f the member bank.
(3 ) The above provisions with respect to the waiving o f the require­
ment fo r submission o f reports o f affiliates are subject to change when­
ever deemed advisable by the B oard of Governors of the Federal
Reserve System in order to require the submission of reports which
are necessary to disclose fu lly relations between member banks and
their affiliates and the effect thereof upon the affairs o f member banks.