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FED ER AL RESERVE BANK O F NEW YORK r Circular No. 6 1 2 4 ~ | L February 20, 1968 J NEW REGULATION G Effective March 11,1968 To Nonbank Lenders, and Others Concerned, in the Second Federal Reserve District : The Board of Governors of the Federal Reserve System has issued, pursuant to the Securities Exchange Act of 1934, a new Regulation G, “ Credit by Persons other than Banks, Brokers, or Dealers for Purpose of Purchasing or Carrying Registered Equity Securities.” The regulation is effective March 11,1968, but certain of its requirements apply to loans made on or after February 1, 1968. A copy is enclosed. The regulation applies to credit (loans) secured in any way by stocks registered on a national securities exchange, or debt securities convertible into such stocks (“ registered equity securities,” as defined in the regulation). Persons who have extended or arranged for credit so secured in a total amount of $50,000 or more during the last calendar quarter of 1967, or had outstanding during such calendar quarter a total of $100,000 or more of such credit, are required to register by completing and returning two copies of the enclosed Federal Reserve Form G -l to the Bank Examinations Department of this Bank before April 10, 1968, in the enclosed self-addressed, prepaid envelope. Persons who meet the registration requirements in any subsequent calendar quarter are required to register within 30 days after the end of such quarter. The regulation also requires registrants to file quarterly reports on a form (Federal Reserve Form G-4) that will be furnished later. No registration is required at this time by persons who, during the last calendar quarter of 1967, extended, arranged for, or maintained credit against registered equity securities in less than the minimum amounts described above. In such cases, please complete the enclosed statement to this effect in place of Federal Reserve Form G -l, and return it promptly to the Bank Examinations Department of this Bank in the enclosed self-addressed, prepaid envelope. If your office is a branch of a larger organization, this letter, with enclosures, should be forwarded to the individual within your organization who would handle such matters. How ever, each subsidiary that is separately incorporated must register, if subject to the registration requirements. Attention is called to some other provisions of the regulation, including (1) margin require ments on certain extensions of credit, (2) “ retention” requirements applying to withdrawal and substitution of collateral in certain circumstances, (3) a requirement that a statement on Federal Reserve Form G-3 be obtained from borrowers whose loan is secured by any registered equity securities, (4) a requirement that persons acting as agent in connection with credit that is secured by such collateral obtain and accept in good faith a statement from the principal that he is not violating any of the margin regulations of the Board of Governors that may apply to him, and (5) a prohibition against arranging for any credit that the arranger could not extend (with the exception of arranging for credit to be extended by banks that are subject to margin regulations). ( over) A specimen Form G -3— Purpose Statement— reduced in size, is bound with the regulation for your information. Full-size specimen copies of this form, suitable for reproduction, are available upon request from this Bank. It is important that persons subject to this regulation register and comply with its provi sions, since failure to do so may result in criminal penalties. Our Bank Examinations Department will be pleased to answer any question you may have regarding Regulation G or the forms described above. Copies of this circular and of Regulation G and its supplement are being sent to banks, brokers, and dealers for their information. Additional copies of this circular and its enclosures will be furnished upon request. A lfred H ayes, President. SUPPLEMENT TO REGULATION G SECTION 207.5— SUPPLEMENT I ssu e d b y t h e B o ard of G o v e r n o r s of t h e F e d e r a l R e se r v e S y s t e m Effective March 11, 1968 (a ) M axim um loan value o f registered equity securities.— For the purpose o f section 207.1, the m aximum loan value o f any registered equity security, except convertible securities subject to section 2 0 7 .1 (d ), shall be 30 per cent o f its current market value, as determined by any reasonable method. ( b ) M aximum loan value o f convertible securities subject to section 2 0 7 .1 (d ).— F or the purpose o f section 207.1, the m axi mum loan value o f any security against which credit is extended pursuant to section 207.1 ( d) shall be 50 per cent o f its current m arket value, as determ ined by any reasonable method. (c ) R etention requirem ent.— F or the purpose o f section 207.1, in the case o f a loan w hich would exceed the m axim um loan value o f the collateral follow in g a withdrawal o f collateral, the “ reten tion requirem ent” o f a registered equity security and o f a security against w hich credit is extended pursuant to section 2 07.1(d ) shall be 70 per cent o f its current m arket value, as determ ined by any reasonable method. BO ARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM CREDIT BY PERSONS OTHER THAN BANKS, BROKERS, OR DEALERS FOR PURPOSE OF PURCHASING OR CARRYING REGISTERED EQUITY SECURITIES T REGULATION G (1 2 CFR 2 0 7) Effective March 11, 1968 INQUIRIES REGARDING THIS REGULATION Any inquiry relating to this regulation should be addressed to the Federal Reserve Bank of the district in which the inquiry arises. FORMS The forms furnished with this copy of the Regulation have been reduced in size and are for information only. Copies of the forms for actual use can be obtained from any Federal Reserve Bank. CONTENTS Page Sec. 207.1. General R ule ............................................................................. (а) Registration ..................................................................... (б) Termination of registration ...................................... ( c ) Definition of lender and applicability of margin requirements ................................................................ ( d) Credit on convertible securities ............................. (e) Statements as to purpose of c r e d it......................... ( / ) Credit extended to person subject to Regulation T ( g) Combining purpose credit extended to the same customer ......................................................................... (h) Purpose and nonpurpose credit extended to the same p e r s o n .................................................................. (i) Purpose credit secured both by registered equity securities and by other collateral .................... O') Withdrawals and substitutions of collateral . 1 1 1 1 2 3 3 Sec. 207.2. D efinitions ................................................................................... (а) person .................................................................................. (б) in the ordinary course of his business ................ (c) purpose ................................................................................ ( d ) registered equity security .......................................... ( e ) (1) purchase .............................................. .................. (2) sale ............................................................................. ( / ) customer ......... ................................................................. ( g ) indirectly secured .......................................................... 5 5 6 6 6 6 7 7 7 Sec. 207.3. Reports 7 Sec. 207.4. M iscellaneous Provisions ..................................................... (а) Stock option and employee stock purchase plans (б) List of securities ........................................................... (c) Extensions and renewals .......................................... (d) Reorganization or recapitalization ........................ (e) Mistakes in good faith .............................................. ( / ) Acting as agent ........................................................... ( g ) Arranging for credit ................................................... A ppendix F orms and Records ........................................................... .............................................................................................................. .......................................................................................................... 7 7 9 9 9 9 9 10 11 19 REGULATION G (12 CFR 207) Effective March 11, 1968 CREDIT BY PERSONS OTHER THAN BANKS, BROKERS, OR DEALERS FOR PURPOSE OF PURCHASING OR CARRYING REGISTERED EQUITY SECURITIES SECTION 207.1—GENERAL RULE (a ) R egistration.— E very person who, in the ordinary course o f his business, during any calendar quarter ended a fter October 20, 1967, extends or arranges fo r the extension o f a total o f fifty thousand dollars ($50,000) or more, or has outstanding at any tim e during the calendar quarter, a total o f one hundred thousand dollars ($100,000) or more, in credit, secured directly or indirectly, in whole or in part, b y collateral that includes any registered equity securities, unless such person is subject to Part 220 (R egulation T ) or P art 221 (R egulation U ) o f this Chapter, is su bject to the registration requirem ents o f this paragraph and shall, w ithin 30 days follow in g the end o f the calendar quarter during which the person becom es subject to such registration requirements, register w ith the Board o f Governors o f the Fed eral Reserve System b y filing a statement in con form ity w ith the requirem ents o f Federal Reserve Form G -l with the Federal Reserve Bank o f the district in which the principal office o f the lender is loca ted : Provided, That no such statement need be filed w ith respect to credit extended in the calendar quarter that ended D ecem ber 31, 1967, until A pril 10,1968. ( b ) Term ination o f registration.— A n y person so registered w ho has not, during the preceding six calendar months, extended or m aintained or arranged fo r the extension or maintenance o f any credit secured directly or indirectly, in whole or in part, by collateral that includes any registered equity securities m ay apply fo r term ination o f such registration by filing Federal Reserve F orm G-2 w ith the Federal Reserve Bank o f the district in w hich the principal office o f the lender is located. ( c ) Definition o f lender and applicability o f m argin require ments.— A n y person su bject to the registration requirem ents o f paragraph (a ) o f this section who, in the ordinary course o f his business, extends or maintains or arranges fo r the extension or maintenance o f any credit fo r the purpose o f purchasing or 1 2 REGULATION G Sec. 207.1 carryin g any registered equity s e c u r ity 1 (h erein after called "purpose credit” ) , i f such credit is secured directly or in d ir e c tly 2 in w hole or in part b y collateral that includes any such security, is a “lender” su bject to this P art and shall not a fter F ebruary 1, 1968, except as provided in section 2 0 7 .4 (a ), extend o r arrange fo r the extension o f any purpose credit in an am ount exceeding the m axim um loan value o f the collateral, as prescribed from tim e to tim e fo r registered equity securities in section 207.5 (the Supplem ent to Regulation G ) , or as determ ined by the lender in good fa ith fo r any collateral other than registered equity securi ties: P rovided, That any collateral consisting o f convertible securities described in paragraph (d ) o f this section shall have loan value only as provided in that p aragrap h: A n d provided fu rth er, That in respect to a credit extended a fter F ebruary 1, 1968, and b efore M arch 11, 1968, any reduction in the credit or deposit o f collateral required to m eet this requirem ent shall be accom plished b y A p ril 10,1968. (d ) Credit on convertible securities.— (1 ) A lender m ay extend credit fo r the purpose specified in paragraph ( c ) o f this section on collateral consisting o f any security convertible into a registered equity security or any security ca rryin g a w arrant o r righ t to subscribe to o r purchase such a security (som etim es herein referred to as a “ convertible security” ) . (2 ) Credit extended under this paragraph shall be su bject to the same conditions as any other credit su bject to this section except: ( A ) the entire am ount o f such credit shall be considered a single credit treated separately fro m the single credit specified in paragraph ( g ) o f this section and all the collateral securing such credit shall be considered in determ ining w hether or not the credit com plies w ith this Part, and (B ) the m axim um loan value o f the collateral shall be as prescribed fro m tim e to tim e in section 2 0 7 .5 (6 ) (the Supplement to Regulation G ). (3 ) A n y convertible security originally eligible as collateral fo r a credit extended under this paragraph shall be treated as such as long as continuously held as collateral fo r such credit even though it ceases to be convertible or to ca rry w arrants or rights. (4 ) In the event that any stock is substituted fo r a convertible security held as collateral fo r a credit extended under this sec tion the stock and any credit extended on it in com pliance w ith this P a rt shall thereupon be treated as subject to paragraph (c ) 1 See § 207.2(d). 2 See § 207.2 (gO. Sec. 207.1 REGULATION G 3 o f this section and not to this paragraph and the credit extended under this paragraph shall be reduced b y an amount equal to the m axim um loan value o f the convertible security w ithdraw n less the m axim um loan value o f any convertible security de scribed in subparagraph ( d) (1 ) deposited as collateral. (e) Statements as to purpose of credit.— In connection with any extension o f credit secured directly o r indirectly, in whole o r in part, b y collateral that includes any registered equity se curity, the lender shall, prior to such extension, obtain a state ment in con form ity w ith the requirem ents o f Federal Reserve F orm G -3 executed by the custom er and executed and accepted in good faith b y the lender. The lender shall retain such state m ent in his records fo r at least six years a fte r such credit is extinguished. In determ ining w hether credit is “ purpose credit” , the lender m ay rely on the statement executed by the custom er i f accepted in good faith. T o accept the custom er's statement in good faith, the lender must (1 ) be alert to the circum stances surrounding the credit and (2 ) if he has any inform aiton w hich would cause a prudent man not to accept the statement w ithout inquiry, have investigated and be satisfied that the custom er’s statement is truthful. Circum stances w hich could indicate that the lender has not exercised reasonable diligence in so acquaint ing him self and so investigating would include, but are not lim ited to, facts such as that (1 ) the proceeds o f the credit were paid to a broker or to a bank in connection w ith contem porane ous delivery o f registered equity securities, whether or not pay ment w as m ade against delivery, (2 ) there w ere frequent substi tutions o f registered equity securities serving as collateral fo r the credit, o r (3 ) the am ount o f the credit was disproportionate, or the term s inappropriate, to the stated purpose. ( /) Credit extended to person subject to Regulation T.— (1 ) N o lender shall extend or m aintain any credit fo r the purpose o f purchasing or carryin g any registered equity security to any person w ho is subject to P art 220 o f this Chapter (R eg ulation T ) w ithout collateral or on collateral consisting o f reg istered securities (oth er than exem pted securities8) . W here the credit is to be used in the ordinary course o f business o f such person, such credit is presumed to be fo r the purpose o f pur chasing or ca rryin g registered equity securities unless the lender has in his records statements obtained and executed in con form ity w ith the requirem ents o f paragraph ( e) o f this section. 3 As defined in 15 U.S.C. 78c (a) (12). 4 REGULATION G Sec. 207.1 (2 ) The prohibition o f this paragraph ( / ) shall not apply to a credit w hich is unsecured or secured b y collateral other than registered equity securities, and w hich is (i) m ade to a dealer (as defined in section 2 2 0 .2 (a ) o f Regulation T ) to aid in the distribution o f securities to custom ers not through the medium o f a national securities exchange, or (ii) subordinated to the claim s o f general creditors b y a subordination agreem ent ap proved b y an appropriate com m ittee o f a national securities ex change o r b y a “ satisfa ctory subordination agreem ent” as de fined in paragraph (e ) (7 ) o f Rule 240-15c3-l o f the Securities and E xchange Com m ission. ( g) Combining purpose credit extended to the same customer.— F o r the purpose o f this Part, except fo r a credit su bject to paragraph ( d ) o f this section, the aggregate o f all outstanding purpose credit extended to a person b y a lender a fter F ebruary 1, 1968, shall be considered a single credit and, except as p ro vided in paragraphs ( d ) and (i) o f this section, all the col lateral securing such a credit, w hether directly or indirectly, in whole o r in part, shall be considered in determ ining w hether the credit com plies w ith this Part. ( h) Purpose and nonpurpose credit extended to the same person.— N o lender shall a fte r F ebruary 1, 1968, extend or m aintain or arrange fo r the extension o f any purpose credit, or shall arrange fo r the maintenance o f any purpose credit ex tended a fter F ebruary 1, 1968, i f the credit is secured directly or indirectly, in whole or in part, b y collateral that includes any registered equity security w hich also secures, directly or indirectly, in w hole or in part, any oth er credit extended to the same cu stom er; and no lender shall have outstanding a t the same tim e to the same custom er both purpose credit extended a fte r F ebruary 1, 1968, and any other credit extended a fter F ebruary 1, 1968. ( i) Purpose credit secured both by registered equity securi ties and by other collateral.— N o lender shall a fte r F ebruary 1, 1968, extend o r m aintain or arrange fo r the extension o f any purpose credit, or shall arrange fo r the maintenance o f any purpose credit extended a fte r F ebruary 1, 1968, w hich is secured directly or indirectly, in w hole or in part, b y collateral th at in cludes any registered equity security, unless at the tim e such credit w as extended, the lender th ereof obtained collateral con sisting o f registered equity securities in an am ount sufficient to m eet the requirem ents o f paragraph (c ) o f this section, and such credit was th ereafter m aintained in accordance w ith the re Secs. 207.1—207.2 REGULATION G 5 quirem ents o f this Part, and where any such credit is so secured, no oth er collateral shall have any loan value in respect to such credit fo r the purposes o f this Part. ( j ) W ithdraw als and substitutions o f collateral.— (1 ) General rule. E xcept as perm itted by the next subparagraph and by section 2 0 7 .4 (a ), w hile a lender m aintains any purpose credit extended a fte r February 1, 1968, the lender shall not at any tim e perm it any withdrawal or substitution o f collateral unless either (i) the credit would n ot exceed the m axim um loan value o f the col lateral a fter such w ithdraw al or substitution, or (ii) the credit is reduced by at least the am ount by w hich the m axim um loan value o f any collateral deposited is less than the “ retention requirem ent” o f any collateral withdrawn. The retention re quirem ent o f collateral oth er than registered equity securities is the same as its m axim um loan value and the retention require m ent o f collateral consisting o f registered equity securities or securities convertible into registered equity securities is pre scribed fro m tim e to tim e in section 207.5 (the Supplement to Regulation G ) . (2 ) Sam e-day substitution o f collateral. E xcept as pro hibited by section 2 0 7 .4 (a ) a lender m ay perm it a substitution o f registered equity securities effected by a purchase and sale on orders executed w ithin the the same day: P rovided , That (i) if the proceeds o f the sale exceed the total cost o f the purchase, the credit is reduced b y at least an amount equal to the retention requirem ent in respect to the sale less the retention requirem ent in respect to the purchase, or (ii) i f the total cost o f the pur chase exceeds the proceeds o f the sale, the credit m ay be increased by an am ount no greater than the m axim um loan value o f the securities purchased less the m axim um loan value o f the securities sold. I f the m axim um loan value o f the collateral securing the credit has becom e less than the amount o f the credit, the am ount o f the credit m ay nonetheless be increased i f there is provided additional collateral having m axim um loan value at least equal to the am ount o f increase, or the credit is extended pursuant to section 2 0 7 .4 ( a) . SECTION 207.2—DEFINITIONS F o r the purpose o f this Part, unless the context otherwise requires: (a) The term “ person” means an individual, a corporation, a partnership, an association, a jo in t stock com pany, a business trust, or an unincorporated organization. REGULATION G 6 Sec. 207.2 ( b ) The term "in the ordinary course o f his business” means occurring or reasonably expected to occu r fro m tim e to tim e in the course o f any activity o f the lender fo r profit or the m anage m ent and preservation o f property or in addition, in the case o f a lender other than an individual, carrying ou t or in furtherance o f any business purpose. (c ) The “ purpose” o f a credit is determ ined by substance rath er than form . (1 ) Credit w hich is fo r the purpose, w hether im m ediate, incidental, o r ultimate, o f purchasing or carryin g a registered equity security is “ purpose credit” , despite any tem porary ap plication o f funds otherwise. (2) Credit to enable the custom er to reduce or retire in debtedness w hich was originally incurred to purchase a reg istered equity security is fo r the purpose o f “ ca rryin g ” such a security. (3 ) Credit fo r the purpose o f purchasing or carryin g a security issued by an investm ent com pany registered pursuant to section 8 o f the Investm ent Com pany A ct o f 1940 (15 U.S.C. 8 0 a -8 ), w hose assets custom arily include registered equity secu rities, is fo r the purpose o f purchasing or carrying such reg istered equity securities. (4 ) Credit fo r the purpose o f purchasing or carrying any security convertible into a stock registered on a national securi ties exchange or any security carryin g a w arrant or rig h t to subscribe to or purchase a stock registered on a national securi ties exchange is fo r the purpose o f purchasing or carryin g such registered equity securities. ( d) The term “ registered equity security” means any iequity security4 w hich (1 ) is registered on a national securities ex change; or (2 ) has unlisted tradin g privileges on a national securities exchange, o r (3 ) is exem pted b y the Securities and E xchange Com m ission fr o m the operation o f section 7 (c ) (2 ) o f the Securities E xchange A c t o f 1934 (15 U.S.C. 78g ( c ) ( 2 ) ) only to the extent necessary to render law ful any direct or indi rect extension or m aintenance o f credit on such se cu rity ; or (4) any security convertible w ith or w ithout consideration into such registered equity security o r ca rryin g any w arrant o r righ t to subscribe to o r purchase such registered equity security, o r any such w arrant o r right. ( e ) (1 ) The term “ purchase” includes any con tract to buy, purchase, or otherw ise acquire. 4 As defined in U.S.C. 78c (a) 11. Secs. 207.2—207.3—207.4 REGULATION G 7 (2 ) The term “ sale” includes any contract to sell or other w ise dispose of. ( / ) T he term “ custom er” includes any recipient o f the credit to w h om credit is extended directly o r indirectly fo r the use o f the custom er, and also includes any person engaged in a jo in t venture, o r as a m em ber o f a syndicate o r a group, w ith the custom er w ith respect to a purpose loan. ( g ) T he term “ indirectly secured” includes, except as provided in section 2 0 7 .4 ( a ) ( 8 ) , any arrangem ent as to assets o f the custom er w h ich (1 ) serves to protect the interests o f the lender, (2 ) serves to m ake assets o f the b orrow er m ore readily available to the lender than to other creditors o f the borrow er, o r (8 ) under w h ich the b orrow er surrenders the rig h t to dispose o f assets so lon g as the credit rem ains outstanding. SECTION 207.3—REPORTS AND RECORDS (a ) E very person w h o is registered pursuant to section 2 0 7 .1 (a ) o f this P a rt shall w ith in th irty (3 0 ) days follow in g the end o f each succeeding calendar quarter file a report on Federal R eserve F orm G-4 w ith the Federal Reserve Bank o f the d istrict in w hich the principal office o f the lender is located. ( b ) E v ery person w h o has registered pursuant to section 2 0 7 .1 (a ) o f this P a rt shall m aintain such records as shall be prescribed b y the B oard o f G overnors o f the Federal Reserve System to enable it to perform the functions con ferred upon it b y the Securities E xchange A c t o f 1934. (15 U.S.C. 7 8 ). SECTION 207.4—MISCELLANEOUS PROVISIONS ( a) Stock option and em ployee stock purchase plans.— In re spect to an y credit extended and m aintained b y a corporation or b y a lender w holly controlled b y such corporation (such cor porations and such lenders are both sometimes referred to as “ plan-lenders” ) , to an officer o r em ployee o f the corporation or subsidiary th ereof to finance the exercise o f rights granted such officer o r em ployee under a stock option plan o r em ployee stock purchase plan adopted b y the corporation and approved b y a m a jo rity o f its stockholders to purchase registered equity securi ties o f such corporation o r subsidiary, (1 ) Sections 2 0 7 .1 (c ), ( d ) , ( / ) , ( g ) , ( h ) , and ( i ) o f this P a rt shall n ot apply to any such credit extended to finance the exercise o f such righ ts granted to any named officer o r em ployee p rio r to F ebru ary 1, 1968, and effectively exercised b y such REGULATION G 8 Sec. 207.4 officer o r em ployee p rio r to F ebru ary 1, 1969, n or to any credit extended, p rio r to F ebru ary 1, 1969, to a plan-lender pursuant to a bona fide w ritten com m itm ent in existence on F ebruary 1,1968, to finance the exercise o f such rights; (2 ) T he restrictions im posed by section 2 0 7 .1 (c) and (d) and section 207.5 (the Supplem ent to this P a rt) on the m axim um loan value o f registered equity securities serving as collateral fo r purpose credit shall not apply to securities purchased, and serv ing as direct or indirect collateral fo r credit extended, pursuant to such a plan, Provided, T h a t : ( i) The entire am ount o f credit extended to any officer o r em ployee pursuant to this paragraph in connection w ith the exercise o f rights under such plan or plans shall be considered a single credit; (ii) A t the tim e when credit is extended under a plan sub je c t to this paragraph, ( A ) the plan-lender com putes the am ount by w hich the credit exceeds the m axim um loan value o f the collateral as prescribed by section 207.5 (the Supple m ent to Regulation G ), (the “ deficiency” ) , and (B ) the agree m ent under w hich the credit is extended provides that except as perm itted b y the proviso in subparagraph (iii) the officer or em ployee shall, in respect to such deficiency, make equal repaym ents to the plan-lender at least quarterly and equivalent to at least 20 per cent o f such deficiency per annum, or such lesser am ount as the B oard o f G overnors, upon application, m ay perm it, fo r at least three years fro m the extension o f the credit; (iii) The officer or em ployee is not perm itted under such plan or agreem ent to sell, w ithdraw , pledge, o r otherw ise dis pose o f all or any part o f such collateral until ( A ) all repay ments have been m ade fo r at least the three-year period pro vided in subparagraph (ii) and the deficiency has been repaid, o r (B ) the m axim um loan value o f the collateral, as prescribed by section 207.5 (the Supplement to R egulation G ) , is at least equal to the credit w hich rem ains ow in g fr o m the officer or em ployee to the plan-lender, w hichever shall occu r first: P rovided, That this restriction need not apply w here such collateral is required to be sold to meet em ergency expenses arising fr o m circum stances n ot reasonably foreseeable at the tim e o f the extension o f the credit ( f o r this purpose such em ergency expenses shall include the death, disability, or involuntary term ination o f em ploym ent o f the officer or em ployee o r som e other change in his circum stances, involvin g Sec. 207.4 REGULATION G 9 extrem e hardship, not reasonably foreseeable at the tim e the credit is extended. The opportunity to realize m onetary gain is not a “ change in his circum stances” fo r this p u r p o s e ); and (iv ) A t such tim e as either o f the conditions w ith respect to sale, withdraw al, pledge, or other disposition o f collateral specified in subparagraph (iii) are satisfied, the credit is thereafter treated as a credit subject to all the requirements o f this Part. (3 ) N o extension o f credit to a plan-lender to finance such a plan shall be deemed to be indirectly secured by a registered equity security purchased pursuant to the plan provided such security is not repledged by the plan-lender to secure such ex tension o f credit to the plan-lender and the am ount o f the credit does not exceed the total amount o f credit currently extended by such plan-lender pursuant to such plan. ( b ) L ist o f securities.— In determ ining whether a security is a registered equity security or a security convertible into such security, or a security o f the kind described in section 2 0 7 .2 ( c ) ( 3 ) , a lender m ay rely upon the latest list o f equity securities registered on a national securities exchange and securi ties o f the kind described in section 2 0 7 .2 (c) (3 ) issued by the Board o f Governors o f the Federal Reserve System. (c ) E xtensions and renewals.— The renewal o r extension o f m aturity o f a credit need not be treated as the extension o f a credit i f the amount o f the credit is not increased except by the addition o f interest or service charges on the credit or o f taxes on transactions in connection w ith the credit. (d ) R eorganization o r recapitalization.— N othing in this Part shall be construed to prohibit w ithdraw al or substitution o f se curities to enable a custom er to participate in a reorganization or recapitalization. (e ) M istakes in good faith .— Failure to com ply w ith this Part due to a mechanical m istake m ade in good faith in determ ining, recording, o r calculating any credit, balance, m arket price or loan value, or other sim ilar mechanical mistake, shall not con stitute a violation o f this P art i f prom ptly a fter discovery o f the m istake the lender takes w hatever action is practicable to rem edy the noncom pliance. ( / ) A ctin g as agent.— N o person shall act as agent f o r any lender, bank, o r cred itor su bject to Parts 207, 220, o r 221 o f this Chapter (R egulation G, T, or U ) extending, m aintaining, o r ar ranging f o r any credit w hich the agent knows, o r should know, 10 REGULATION G Sec. 207.4 is secured directly o r indirectly b y any registered security unless the agent obtains and accepts in good fa ith a statem ent signed by such lender, bank, or creditor that he does not extend o r main tain credit to or fo r custom ers in violation o f such Part. F o r this purpose such activities o f an “ agent” include, but are not lim ited to receivin g securities to be used as collateral fo r such credit, determ ining w hether the m arket value o f the col lateral fo r such credit is adequate, and requiring the deposit o f additional collateral or the reduction o f such credit. In determ ining w hether there has been an extension o f credit su bject to the provisions o f Parts 207,220, or 221 o f this Chapter, and whether he can rely in good faith on the statem ent de scribed herein, the person shall (1 ) be alert to the circum stances surrounding the credit and (2 ) if he has any in form ation w hich w ould cause a prudent man not to accept the statem ent w ithout inquiry, must have investigated and be satisfied that the credit either is not subject to such Part, o r is extended and m aintained in con form ity w ith such Part. (g ) A rran gin g fo r credit.— A lender m ay arrange fo r the ex tension or m aintenance o f credit by any person upon the same term s and conditions as those upon w hich the lender, under the provisions o f this Part, m ay him self extend or m aintain such credit, but only upon such term s and conditions, except that this lim itation shall not apply w ith respect to the arran gin g by a lender fo r a bank su bject to P a rt 221 o f this Chapter (R egula tion U ) to extend or m aintain credit on registered securities or exem pted securities. appenddl T here are printed below certain provisions o f the Securities E xchange A ct o f 1934 : (15 U.S.C., 7 8 ): DEFINITIONS Sec. 3. (a ) * * * (3 ) The term “ m em ber” when used w ith respect to an exchange means any person w ho is perm itted either to effect transactions on the exchange w ithout the services o f another person acting as broker, or to make use o f the facilities o f an exchange f o r transactions thereon w ithout paym ent o f a com m ission o r fe e or w ith the paym ent o f a com m ission o r fe e w hich is less than that charged the general public, and includes any firm transacting a business as brok er or dealer o f w h ich a m em ber is a partner, and any partner o f any such firm. (4 ) The term “ b rok er” means any person engaged in the business o f effecting transactions in securities fo r the ac count o f others, but does not include a bank. (5 ) The term “ dealer” means any person engaged in the business o f buying and selling securities f o r his ow n account, through a b rok er o r otherw ise, but does not include a bank, o r any person in sofar as he buys o r sells securities fo r his ow n account, either individually o r in som e fiduciary ca pacity, but n ot as a part o f a regular business. (6 ) T he term “ bank” means ( A ) a banking institution organized under the law s o f the U nited States, (B ) a mem b er bank o f the Federal Reserve System, (C ) any other banking institution, w hether incorporated o r not, doing business under the laws o f any State o r o f the U nited States, a substantial portion o f the business o f w hich consists o f receiving deposits o r exercising fiduciary pow ers sim ilar to those perm itted to national banks under section 11 (k ) o f the Federal Reserve A ct, as amended, and w hich is super vised and exam ined b y State or Federal authority having supervision over banks, and w hich is not operated f o r the purpose o f evading the provisions o f this title, and (D ) a receiver, conservator, o r other liquidating agent o f any in- li REGULATION G APPENDIX stitution o r firm included in clauses ( A ) , ( B ) , or (C ) o f this paragraph. * * * (9 ) The term “ person” means an individual, a corpora tion, a partnership, an association, a join t-stock com pany, a business trust, o r an unincorporated organization. (1 0 ) The term “ security” means any note, stock, treasury stock, bond, debenture, certificate o f interest o r participa tion in any profit-sharing agreem ent o r in any oil, gas, or oth er m ineral royalty o r lease, any collateral-trust certificate, preorganization certificate o r subscription, transferable share, investm ent contract, votin g-tru st certificate, certifi cate o f deposit, fo r a security, o r in general, any instrum ent com m only know n as a “ secu rity” ; o r any certificate o f in terest or participation in, tem porary o r interim certificate fo r , receipt fo r , or w arran t o r righ t to subscribe to or pur chase, any o f the fo re g o in g ; but shall n ot include currency o r any note, draft, bill o f exchange, o r banker’s acceptance w hich has a m aturity at the tim e o f issuance o f n ot exceed in g nine months, exclusive o f days o f grace, o r any renewal th ereof the m aturity o f w hich is likew ise limited. (1 1 ) The term “ equity secu rity” means any stock or sim ilar security; o r any security convertible, w ith o r w ith out consideration, into such a security; o r ca rry in g any w a r rant o r righ t to subscribe to or purchase such a security; or any such w arrant o r righ t; o r any other security w hich the Com m ission shall deem to be o f sim ilar nature and consider necessary or appropriate, by such rules and regulations as it m ay prescribe in the public interest or f o r the protection o f investors, to treat as an equity security. * * * (1 3 ) The term s “ bu y” and “ purchase” each include any con tract to buy, purchase, o r otherw ise acquire. (1 4 ) The term s “ sale” and “ sell” each include any con tra ct to sell o r otherw ise dispose of. * * * MARGIN REQUIREMENTS Sec. 7. (a ) F o r the purpose o f preventing the excessive use o f credit fo r the purchase or carryin g o f securities, the B oard o f G overnors o f the Federal Reserve System shall, REGULATION G APPENDIX 13 prior to the effective date o f this section and fro m tim e to tim e thereafter, prescribe rules and regulations w ith respect to the am ount o f credit that m ay be initially extended and subsequently m aintained on any security (other than an exem pted secu rity) registered on a national securities ex change. F o r the initial extension o f credit, such rules and regulations shall be based upon the follow in g standard: A n am ount not greater than w hichever is the higher o f — (1 ) 55 per centum o f the current m arket price o f the security, or (2 ) 100 per centum o f the low est m arket price o f the security during the preceding thirty-six calendar months, but not m ore than 75 per centum o f the current m arket price. Such rules and regulations m ay make appropriate provision w ith respect to the ca rryin g o f underm argined accounts fo r lim ited periods and under specified conditions; the w ith drawal o f funds or securities; the substitution o r additional purchases o f securities; the tran sfer o f accounts fro m one lender to another; special o r different m argin requirements fo r delayed deliveries, short sales, arbitrage transactions, and securities to w hich paragraph (2 ) o f this subsection does not apply; the bases and the methods to be used in cal culating loans, and m argins and m arket prices; and similar adm inistrative adjustm ents and details. F or the purposes o f paragraph (2 ) o f this subsection, until July 1, 1986, the low est price at w hich a security has sold on o r a fter July 1, 1933, shall be considered as the lowest price at w hich such security has sold during the preceding thirty-six calendar months. (b ) N otw ithstanding the provisions o f subsection (a ) o f this section, the B oard o f G overnors o f the Federal Reserve System, may, fro m tim e to time, w ith respect to all or specified securities or transactions, or classes o f securities, o r classes o f transactions, b y such rules and regulations (1 ) prescribe such low er m argin requirements fo r the initial extension or m aintenance o f credit as it deems necessary or appropriate fo r the accom m odation o f com m erce and in dustry, having due regard to the general credit situation o f the country, and (2 ) prescribe such higher m argin require ments fo r the initial extension or m aintenance o f credit as it m ay deem necessary or appropriate to prevent the ex cessive use o f credit to finance transactions in securities. REGULATION G APPENDIX ( c ) It shall be unlaw ful fo r any m em ber o f a national securities exchange or any broker or dealer who transacts a business in securities through the medium o f any such mem ber, directly or indirectly to extend or m aintain credit or arrange fo r the extension or m aintenance o f credit to or fo r any custom er— (1 ) On any security (oth er than an exem pted security) registered on a national securities exchange, in contra vention o f the rules and regulations w hich the Board o f G overnors o f the Federal Reserve System shall prescribe under subsections (a ) and (b ) o f this section. (2 ) W ithout collateral o r on any collateral other than exem pted securities a n d /o r securities Registered upon a national securities exchange, except in accordance with such rules and regulations as the B oard o f G overnors o f the Federal Reserve System m ay prescribe (A ) to perm it under specified conditions and fo r a lim ited period any such m em ber, broker, or dealer to m aintain a credit initially extended in con form ity w ith the rules and regu lations o f the B oard o f G overnors o f the Federal Reserve System, and (B ) to perm it the extension o r maintenance o f credit in cases where the extension or m aintenance o f credit is not fo r the purpose o f purchasing o r carryin g securities or o f evading or circum venting the provisions o f paragraph (1 ) o f this subsection. (d ) It shall be unlaw ful fo r any person not su bject to subsection (c ) to extend or m aintain credit or to arrange fo r the extension or m aintenance o f credit fo r the purpose o f purchasing or ca rryin g any security registered on a national securities exchange, in contravention o f such rules and regulations as the B oard o f G overnors o f the Federal Reserve System shall prescribe to prevent the excessive use o f credit fo r the purchasing or ca rryin g o f or trading in securities in circum vention o f the other provisions o f this section. Such rules and regulations m ay im pose upon all loans made fo r the purpose o f purchasing or ca rryin g secu rities registered on national securities exchanges lim itations sim ilar to those im posed upon mem bers, brokers, or dealers by subsection (c ) o f this section and the rules and regu lations thereunder. This subsection and the rules and reg ulations thereunder shall not apply (A ) to a loan made by a person n ot in the ordinary course o f his business, (B ) to a loan on an exem pted security, (C ) to a loan to a dealer to REGULATION G APPENDIX 15 aid in the financing o f the distribution o f securities to cus tom ers not through the medium o f a national securities exchange, (D ) to a loan b y a bank on a security other than an equity security, or (E ) to such other loans as the Board o f G overnors o f the Federal R eserve System shall, by such rules and regulations as it m ay deem necessary or appro priate in the public interest o r f o r the protection o f in vestors, exem pt, either unconditionally or upon specified term s and conditions o r fo r stated periods, fro m the opera tion o f this subsection and the rules and regulations there under. * * * RESTRICTIONS ON BORROWING BY MEMBERS, BROKERS, AND DEALERS Sec. 8. It shall be unlawful fo r any m em ber o f a na tional securities exchange, or any broker o r dealer who transacts a business in securities through the medium o f any such m em ber, directly or indirectly— (a ) To b orrow in the ordinary course o f business as a broker or dealer on any security (other than an exempted security) registered on a national securities exchange except (1 ) fro m or through a m em ber bank o f the Federal Reserve System, (2 ) fro m any nonm em ber bank w hich shall have filed w ith the Board o f G overnors o f the Federal Reserve System an agreement, w hich is still in fo rce and w hich is in the fo rm prescribed b y the Board, undertaking to com ply w ith all provisions o f this A ct, the Federal Reserve A ct, as amended, and the B anking A ct o f 1933, w hich are applicable to m em ber banks and w hich relate to the use o f credit to finance transactions in securities, and w ith such rules and regulations as m ay be prescribed pursuant to such provisions o f law or fo r the purpose o f preventing evasions thereof, or (3 ) in accordance w ith such rules and regula tions as the B oard o f G overnors o f the Federal Reserve System m ay prescribe to perm it loans between such mem bers a n d /o r brokers a n d /o r dealers, or to perm it loans to m eet em ergency needs. A n y such agreem ent filed w ith the B oard o f G overnors o f the Federal Reserve System shall be subject to term ination at any time by order o f the Board, a fter appropriate notice and opportunity fo r hearing be cause o f any failu re by such bank to com ply w ith the p rovi sions th ereof or w ith such provisions o f law or rules or REGULATION G APPENDIX regulation; and, fo r any w illful violation o f such agreement, such bank shall be subject to the penalties provided fo r violations o f rules and regulations prescribed under this title. The provisions o f sections 21 and 25 o f this title shall apply in the case o f any such proceeding or order o f the Board o f G overnors o f the Federal R eserve System in the same m anner as such provisions apply in the case o f p ro ceedings and orders o f the Com m ission. (b ) T o perm it in the ordinary course o f business as a broker his aggregate indebtedness to all other persons, including custom ers’ credit balances (bu t excluding in debtedness secured by exem pted secu rities), to exceed such percentage o f the net capital (exclusive o f fixed assets and value o f exchange m em bership) em ployed in the business, but not exceeding in any case, 2,000 per centum, as the Com m ission m ay by rules and regulations prescribe as neces sary or appropriate in the public interest o r fo r the protec tion o f investors(c ) In contravention o f such rules and regulations as the Com m ission shall prescribe f o r the protection o f in vestors to hypothecate or arrange fo r the hypothecation o f any securities carried fo r the account o f any custom er under circum stances (1 ) that will perm it the com m ingling o f his securities w ithout his w ritten consent w ith the secu rities o f any other custom er, (2 ) that will perm it such securities to be com m ingled w ith the securities o f any per son other than a bona fide custom er, or (3 ) that will perm it such securities to be hypothecated, o r subjected to any lien or claim o f the pledgee, fo r a sum in excess o f the aggregate indebtedness o f such custom ers in respect o f such securities. (d ) T o lend o r arrange fo r the lending o f any securities carried fo r the account o f any custom er w ithout the w ritten consent o f such customer. * * * ACCOUNTS AND RECORDS, REPORTS, EXAMINATIONS Sec. 17. (b ) A n y broker, dealer, or oth er person extend in g credit w ho is subject to the rules and regulations pre scribed b y the B oard o f G overnors o f the Federal Reserve System pursuant to this title shall make such reports to the Board as it m ay require as necessary o r appropriate to en REGULATION G APPENDIX 17 able it to p erfo rm the functions con ferred upon it b y this title. I f any such broker, dealer, o r other person shall fa il to make any such report o r fa il to fu rnish fu ll in form a tion therein, or, i f in the judgm ent o f the B oard it is other wise necessary, such broker, dealer, o r other person shall perm it such inspections to be m ade by the Board w ith respect to the business operations o f such broker, dealer, or other person as the B oard m ay deem necessary to enable it to obtain the required inform ation. * * * VALIDITY OF CONTRACTS Sec. 29. (a ) A n y condition, stipulation, or provision bind in g any person to w aive com pliance w ith any provision o f this title or o f any rule o r regulation thereunder, or o f any rule o f an exchange required thereby shall be void. (b ) E v ery con tract m ade in violation o f any provision o f this title o r o f any rule o r regulation thereunder, and every con tract (including any con tract fo r listing a security on an exchange) h eretofore or h ereafter m ade the perform ance o f w hich involves the violation o f, o r the continuance o f any relationship o r practice in violation of, any provision o f this title o r any rule o r regulation thereunder, shall be void (1 ) as regards the righ ts o f any person who, in violation o f any such provision, rule, o r regulation, shall have made or engaged in the perform an ce o f any such contract, and (2 ) as regards the rights o f any person w ho, n ot bein g a party to such contract, shall have acquired any righ t thereunder w ith actual know ledge o f the fa cts by reason o f w hich the m aking o r perform an ce o f such contract w as in violation o f any such provision, rule or regulation. * * * ( c ) N othing in this title shall be construed (1 ) to affect the validity o f any loan o r extension o f credit (o r any ex tension o r renew al th ereof) made o r o f any lien created p rio r o r subsequent to the enactm ent o f this title, unless at the tim e o f the m aking o f such loan or extension o f credit (o r extension o r renewal th ereof) o r the creating o f such lien, the person m aking such loan o r extension o f credit (o r extension or renewal th ereof) or acquiring such lien shall have actual know ledge o f facts b y reason o f w hich the m aking o f such loan o r extension o f credit (o r extension or REGULATION G APPENDIX renewal th ereof) or the acquisition o f such lien is a viola tion o f the provisions o f this title o r any rule or regulation thereunder, or (2 ) to afford a defense to the collection o f any debt or obligation or the enforcem ent o f any lien by any person who shall have acquired such debt, obligation, or lien in good faith fo r value and w ithout actual know ledge o f the violation o f any provision o f this title o r any rule o r regula tion thereunder affecting the legality o f such debt, obliga tion, o r lien. * * * PENALTIES Sec. 32. (a ) A n y person w ho w illfully violates any pro vision o f this title, o r any rule o r regulation thereunder the violation o f w hich is made unlaw ful o r the observance o f w hich is required under the term s o f this title, o r any person w ho w illfu lly and know ingly makes, o r causes to be made, any statement in any application, report, o r docum ent re quired to be filed under this title or any rule o r regulation thereunder or any undertaking contained in a registration statement as provided in subsection (d ) o f section 15 o f this title, w hich statem ent was false or m isleading w ith re spect to any m aterial fact, shall upon conviction be fined not m ore than $10,000, o r im prisoned not m ore than tw o years, o r both, except that when such person is an exchange, a fine o f not exceeding $500,000 m ay be im posed; but no person shall be su bject to im prisonm ent under this section fo r the violation o f any rule o r regulation i f he proves that he had no know ledge o f such rule o r regulation. (Federal Reserve Form G-l) SPECIMEN ONLY 19 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM REGISTRATION STATEMENT FOR LENDERS OTHER THAN COMMERCIAL BANKS AND BROKERS THAT EXTEND CREDIT SECURED BY REGISTERED EQUITY SECURITIES (Pursuant to Section 207.1(a) of Federal Reserve Regulation G) Registration Requirement1 Every person not subject to Federal Reserve Regulations T and U, who, in the ordinary course of business, during the calendar quarter ended December 31, 1967, extended or arranged for the extension of a total of $50,000 or more, or had outstanding at any time during such calendar quarter a total of $100,000 or more, in credit, against collateral that included registered equity securities shall prior to April 10, 1968 register with the Board of Governors by filing Form G-l with the Federal Reserve Bank of the district in which the principal office of the lender is located. Thereafter, any such person not already registered who during any calendar quarter (a) extends or arranges for the extension of $50,000 or more of such credit, or (b) has outstanding $100,000 or more of such credit, shall register within 30 days after the end of that quarter. General Instructions All persons subject to the preceding registration requirement should (1) supply the background information specified below; (2) complete Schedules A and B; and (3) file a balance sheet (as of the end of the registrant’s latest fiscal year). Registrants should submit, if available, a balance sheet certified by an independent public accountant which is accompanied by the accountant’s opinion and related explanatory notes. If the registrant is sub ject to supervision by a State or Federal regulatory authority, the balance sheet last filed with such regulatory authority may be used. If neither of the two preceding types of balance sheets is available, registrants should complete Schedule C. Balance sheets for any date prior to June 30, 1967 will not be acceptable. Registration forms will be returned to registrants for corrections if not all items have been answered in the manner required or if the forms are otherwise unacceptable for filing. 1 The following definitions of terms may help to clarify the meaning of this requirement; for additional definitions, see Sec tion 207.2 of Regulation G. Person (as used in the registration requirement): An individual, a corporation, a partnership, an association, a joint stock company, a business trust, or an unincorporated organization. In the ordinary course of business: Occurring or reasonably expected to occur from time to time in the course of any activity of the lender for profit or the management and preservation of property or in addition, in the case of a lender other than an individual, carrying out or in furtherance o f any business purpose. Registered equity security: Any equity security which (1) is registered on a national securities exchange, (2) has unlisted trading privileges on a national securities exchange, or (3) any security convertible with or without consideration into such registered equity security or carrying any warrant or right to subscribe to or purchase or carry such regis tered equity security, or any such warrant or right. BACKGROUND INFORMATION 1. Full name of registrant: IRS Employee Identification No.: 2. Name under which business is conducted, if different than as stated in No. 1: 3a. Address of principal place of business: (Do not use P.O. Box No.) b. Mailing address, if different than as stated in “ a” : 4. Principal lines of business: 5. Registrant is (check one) Sole proprietorship___________ Partnership___________ Corporation___________ Other (specify) 6. If registrant is sole proprietor, state full residence address: 7. If registrant is a partnership, list names and nature of interest of all general partners and those limited partners that have a more than 10 per cent interest in the partnership: Partner Nature of Interest 8. If registrant is a corporation, a. State date and place of incorporation: Place Date______________________ b. Furnish names and titles of all principal officers: Officer Title BACKGROUND INFORMATION (continued) 9. If registrant is other than a sole proprietor, partnership, or corporation, indicate names of principals: 10a. Does any person not named in Items 1 and 6 through 9, inclusive, directly or indirectly, through stock ownership, agreement, or otherwise, exercise or have power to exercise a controlling influence over the management or policies of registrant? Yes ___________ No ___________ b. If answer to “ a” is yes, state the name of each such person and describe the agreement or other basis through which such person exercises a controlling influence: 11. If registrant has any arrangement with any other person, firm, or organization under which any of the accounts or records of registrant are kept or maintained by such other person, firm or organiza tion, furnish the name and address of the other person, firm, or organization: If additional space is needed to answer any of the above items, supplemental sheets should be attached. SIGNATURE The Registrant filing this Form and its attachments and the person by whom it is executed repre sent hereby that all information contained therein is true and complete. It is understood that all appli cable items and schedules are considered integral parts of this form. Dated this ___________ ___________________ _ day o f __________________________________ , 19____ (Name o f Corporation, Partnership, or other organization) (Manual signature o f Sole Proprietor, General Partner, Managing Agent or Principal Officer) A FALSE OR DISHONEST STATEMENT ON THIS FORM MAY BE PUNISHABLE BY FINE OR IMPRISONMENT (U.S. CODE, TITLE 15, SECTION 78ff AND TITLE 18, SECTION 1001.) Schedule A SECURITIES CREDIT OUTSTANDING A T END OF L A TE ST FISCAL Q U ARTER (In dollars) (Date___________ ) A. Credit E xtended to P urchase or C arry R egistered E quity Securities 1. Secured directly a. In whole or in part by registered equity securities ___________________________ b. Wholly by other collateral ___________________________ 2. Secured in d irectly1 a. In whole or in part by registered equity securities B. ___________________________ b. Wholly by other collateral ___________________________ O ther E xtensions of Credit S ecured in W hole or in P art by R egistered E quity S ecurities 1. Secured directly _______________________________ 2. Secured indirectly 1 _______________________________ Schedule B VOLUME OF SECURITIES CREDIT EXTENDED IN LATEST FISCAL QUARTER (Fiscal Quarter ended--------------------------- ) Number of loans a. In whole or in part by registered equity securities ___________ _____________ b. Wholly by other collateral ___________ _____________ a. In whole or in part by registered equity securities ___________ _____________ b. Wholly by other collateral A. Volume (In dollars) ___________ _____________ Credit E xtended to P urchase or Carry R egistered E quity Securities 1. Secured directly 2. Secured indirectly 1 B. Other E xtensions of Credit Secured in W hole or in P art by R egistered E quity Securities 1. Secured directly _____________ _______________ 2. Secured indirectly 1 _____________ _______________ 1 For purposes of these schedules registrants should exclude loans made pursuant to loan agreements containing negative pledge or other similar provisions. However, indicate in the boxes that follow whether your loan agreements normally contain such provisions. Q yes Q no For specific instructions in completing these schedules see next page Instructions for Schedules A and B (1) Registrants need supply data only on the lines indicated; summations will be made by the Federal Reserve. (2) Data on credits outstanding (Schedule A) and the volume of credits extended (Schedule B) should be reported in even dollars; cents should be omitted. (3) “Registered equity securities,” as indicated by the definition set forth at the bottom of page 1 of this registration statement, include bonds or debentures convertible into stocks registered on national securities exchanges as well as the stocks themselves. A list containing the names of all registered stocks can be obtained from your nearest Federal Reserve Bank. (4) Credit extensions included under Section A of Schedules A and B are “purpose” credits, as defined in section 207.2(c) of Regulation G; and those included under Section B of the schedules are “non purpose” credits. (5) The term “other collateral” in lines A (l)b and A(2)b of both sched ules includes—in addition to non-registered equity securities, nonconvertible bonds, and other financial assets—any nonfinancial assets pledged against the loan. (6) For purposes of completing lines A (2) and B(2), the term “secured indirectly” means any arrangement as to assets of the borrower which (1) serves to protect the interest of the lender in insuring that the credit, is repaid, or (2) serves to make assets of the borrower more readily available to the lender than to other creditors of the borrower. (7) A “negative pledge” is a covenant signed by the borrower agreeing not to sell, encumber, or otherwise dispose of any of his assets without first obtaining the consent of the lender. Schedule C BALANCE SHEET AT END OF LATEST FISCAL YEAR 1 (As o f --------------------------- ) Date ASSETS (To the Nearest Dollar) 1. Cash, deposits, and owned securities maturing in one year or less * 2. Notes and accounts receivable (net of allowance for bad debts of $___________) 3. Plant, equipment and other fixed assets (net of depreciation and depletion amounting to $-----------------) 4. Inventories 5. Equity in non-consolidated subsidiaries3 6. All other assets 7. Total Assets LIABILITIES 8. Bank loans maturing in one year or less2 9. Other notes and accounts payable maturing in one year or less2 10. Long-term debt 11. Other liabilities 12. Total Liabilities NET WORTH 13. Paid-in capital, and paid-in surplus 14. Earned surplus and/or undivided profits 15. Total Net Worth 16. Total Liabilities and Net Worth 1 To be completed only by firms not submitting corporate balance sheets certified by an independent public accountant or used to meet reporting requirements of supervisory agencies. 2 Items maturing in one year or less include those that have shortened with the passage of time as well as items with original maturities of one year or less. 3 Includes the parent company’s share of earnings retained in the non-consolidated subsidiary as well as its direct contributions of capital. 4 Registrants for which items 13 and 14 are not relevant should still fill in item 15. SPECIMEN ONLY BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM DEREGISTRATION STATEMENT FOR LENDERS REGISTERED PURSUANT TO REGULATION G (FEDERAL RESERVE FORM G-2) A. For use by Non-Corporate Lenders. Certificate I (We), doing business under the name,_____________________________, hereby certify that I (we) have not extended or maintained, or arranged for the extension or maintenance of any credit secured, di rectly or indirectly, in whole or in part by collateral that includes any registered equity securities during the six calendar months prior to the date hereof. I (We) understand that if I (we), in the future, extend or arrange for the extension of a total of fifty thousand dollars ($50,000) or more during any calendar quarter, or have outstanding at any time during a calendar quarter a total of one hundred thousand dollars ($100,000) or more, in credit secured, directly or indirectly, in whole or in part, by collateral that includes any registered equity securities, I (we) shall within 30 days following the end of such calendar quarter re-register with the Board of Governors of the the Federal Reserve System by filing Federal Reserve Form G-l with the Federal Reserve Bank of the district in which my (our) principal office is located. This certification is given in connection with an application for termination of registration pursuant to section 207.1(b) of Regulation G of the Board of Governors of the Federal Reserve System (12 CFR 207). Date_________________________ Signature (Name o f Firm) (Type o f organization, e.g individual proprietorship, partnership) A FALSE OR DISHONEST STATEMENT ON THIS FORM MAY BE PUNISHABLE BY FINE OR IMPRISONMENT (U. S. CODE, TITLE 15, SECTION 78ff AND TITLE 18, SECTION 10 01). BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM DEREGISTRATION STATEMENT FOR LENDERS REGISTERED PURSUANT TO REGULATION G (FEDERAL RESERVE FORM G-2) B. For use by Corporate Lenders. Officer’s Certificate of (Nam e) (Title) (Name o f Corporation) a _______________________ corporation, do hereby certify th at---------------------------------------------------- has (State o f Incorporation) (Name o f Corporation) not extended or maintained, or arranged for the extension or maintenance of any credit secured, directly or indirectly, by collateral that includes any registered equity securities during the six calendar months prior to the date hereof. It is understood that i f _________________________________ shall, in the future, extend or arrange for (Name o f Corporation) the extension of a total of fifty thousand dollars ($50,000) or more during any calendar quarter, or has outstanding at any time during a calendar quarter, a total of one hundred thousand dollars ($100,000) or more, in credit that is secured, directly or indirectly, in whole or in part, by collateral that includes any registered equity securities,_________________________________ shall within 30 days following the end of (Name o f Corporation) such calendar quarter re-register with the Board of Governors of the Federal Reserve System, by filing Federal Reserve Form G-l with the Federal Reserve Bank of the District in which the principal office of the corporation is located. This certification is given in connection with an application for termination of registration pursuant to section 207.1(b) of Regulation G of the Board of Governors of the Federal Reserve System (12 CFR 207). In witness whereof I have hereunto set my hand and affixed the seal of the corporation this _________________ day o f _______________________, 19_____ SEAL Signature* ATTEST: (Corporate Secretary) * To be executed by a duly authorized president or vice president of the corporation. A FALSE OR DISHONEST STATEMENT ON THIS FORM MAY BE PUNISHABLE BY FINE OR IMPRISONMENT (U. S. CODE, TITLE 15, SECTION 78ff AND TITLE 18, SECTION 1001). SPECIMEN ONLY BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM STATEMENT OF PURPOSE OF THE PROCEEDS OF AN EXTENSION OF CREDIT BY A PERSON OTHER THAN A BANK, BROKER, OR DEALER SECURED BY REGISTERED EQUITY SECURITIES. (FEDERAL RESERVE FORM G-3) A FALSE OR DISHONEST STATEMENT BY THE CUSTOMER OR THE LENDER ON THIS FORM MAY BE PUNISHABLE B Y FINE OR IMPRISONMENT (U.S. CODE, TITLE 15, SECTION 78ff, AND TITLE 18, SECTION 1 0 0 1 ). Please print or type (if space is inadequate attach separate sheet). I (we),. ----------- , have applied for an extension of credit from in the amount of $______________ secured in whole (name o f lender) or in part by registered equity securities as follows: Part I. Registered Equity Security Collateral TO BE COMPLETED BY TH E LENDER Source o f valuation Part II. Maximum loan value under Regulation G $----------------------- Other Collateral Source o f valuation Source o f valuation Market value Good faith loan value (in $) Source o f valuation Total: $ Total amount of credit granted $- Total: $ --- Part III. 1. The proceeds of this credit are to be used for (describe in detail) 2. I (we) have owned the registered equity securities securing this credit continuously for (check one) □ six months or more □ less than six months. I (WE) HAVE READ THIS FORM AND HEREBY CERTIFY AND AFFIRM THAT TO THE BEST OF MY (OUR) KNOWLEDGE AND BELIEF THE STATEMENTS REQUIRED OF ME (US) ARE TRUE, ACCURATE, AND COMPLETE. Manual signature of customer (s): D A TE _______________________________ (SIG N E D )_____________________________________ (P rint name under each signature) (Street address) (City, state) Part IV. TO BE COMPLETED BY LENDER 1. State amount of any other credit extended to the customer(s) (a) secured in whole or in part, di rectly or indirectly, by any portion of collateral listed in Parts I and II: $__________________ and (b) unsecured credit in excess of $5,000 in the aggregate $--------------------------- 2. Is the collateral listed in Part I to be delivered or has the collateral been delivered from a bank, broker, dealer, or a person other than the customer?---------------------Against payment?--------------I HAVE SUPPLIED THE INFORMATION REQUIRED OF THE LENDER AND ACCEPT THE CUSTOMER’S STATEMENT ON THIS FORM IN GOOD FAITH AS DEFINED BELOW.* I AM FAMILIAR WITH THE PROVISIONS OF REGULATION G. D ATE_______________________________ (SIGNED) _____________________________________ (Name of lender) (Street address) (City, state) * Regulation G requires that the customer’s statement on this form be accepted by the lender acting in good faith. Good faith requires that such lender (1) must be alert to the circumstances surrounding the credit, and (2) if he has any information which would cause a prudent man not to accept the statement without inquiry, has investigated and is satisfied that the statement is truthful. This form must be retained by the lender for at least six years after the termination of the credit.
@FedFRASER