Full text of Federal Reserve Bank of New York Circulars : 6436. Amendment to Regulation Q

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FEDERAL RESERVE BANK
OF N E W YORK
r Circular No. 6 4 3 6
L November 12, 1969 J

A M E N D M E N T T O R E G U L A T IO N Q
T im e D eposits o f F oreign G overnm ental Entities
and In tern ational O rganizations

To All Member Banks, and Others Concerned,
in the Second Federal Reserve D istrict:

E n c lo se d is a c o p y

o f an am endm ent,

e ffectiv e

N ovem b er

5,

1969, to

R e g u la tio n Q, In te re s t on D e p o sits, o f the B o a r d o f G o v e rn o rs o f the F e d e ra l
R e se rv e S ystem .
T h e am endm ent ex p a n d s the ca te g o rie s

of

o rg a n iza tion s on w h ose tim e

d e p o sits m em ber banks m a y p a y rates o f in terest in excess o f those p erm itted
b y section 217.7 (S u p p le m e n t to R eg u la tio n Q ), and p ro v id e s an a ltern ative
m eth od b y w hich an exem pt o rg a n iz a tion m ay tra n sfe r a certificate o f d ep osit
to a n on ex em p t h older.
A t the sam e tim e that the am endm ent w as a p p ro v e d , the B o a r d rev ok ed an
in te rp re ta tio n (12 C F R 217.128), issu ed in 1962, in w hich the B o a r d h eld that
the ex em p tion fr o m the lim ita tion s on m axim um in terest rates w as n ot a p p li­
cable to the E u ro p e a n In v estm en t B ank.
A d d itio n a l co p ie s o f the am endm ent w ill be fu rn is h e d u p on request.




A lfred

President.

H ayes,

INTEREST ON DEPOSITS
AMENDMENT TO REGULATION Q
I

ssued

b y

th e

B

oard

of

G

overnors

of

th e

F

ederal

R

eserve

S

ystem

E ffective November 5, 1969, section 217.3 (g) is amended to read
as fo llo w s :
S E C T IO N 217.3— IN T E R E S T ON T IM E
A N D S A V IN G S D E P O S IT S

(g) Time deposits of foreign governmental entities and inter­
national organizations.— Section 217.7 does not apply to the rate of

interest that may be paid by a member bank on a time deposit having
a m aturity o f two years or less and representing funds deposited and
owned by (1 ) a foreign government, or an agency or instrumentality
thereof engaged principally in activities which are ordinarily per­
form ed in the United States by governmental entities, (2 ) an inter­
national entity o f which the United States is a member, or (3) any
other foreign, international, or supranational entity specifically desig­
nated by the B oard as exempt from § 217.7. A ll certificates o f deposit
issued by member banks to such entities on which the contract rate
o f interest exceeds the maximum prescribed under § 217.7 shall p ro­
vide that (1) in the event o f transfer, the date o f transfer, attested
to in w riting b y the transferor, shall appear on the certificate, and
(2 ) the maximum rate limitations o f § 217.7 in effect at the date o f
issuance o f the certificate shall apply to the certificate fo r any period
during which it is held by a person other than an entity exempt there­
from under the foregoin g sentence.6 U pon the presentment o f such a
certificate fo r payment, the bank may pay the holder the contract rate
o f interest on the deposit fo r the time that the certificate was actually
owned by an entity so exempt.
6 A new certificate not maturing prior to the maturity date o f the original certificate may be
issued by the m ember bank to the transferee, in which event the original must be retained by
the bank. The new certificate m ay not provide for interest after the date of transfer at a rate
in excess of the applicable maximum rate authorized by § 217.7 as of the date of issuance of
the original certificate.




PR IN TE D IN N E W YORK