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r C ircu lar N o . 6 4 3 8 1
L N o v e m b e r 18, 1969 J

Amendment to Regulation R, Effective January 1, 1970

To the Member Banks of the Second Federal Reserve District:

Following is the text of a statement issued today by the Board of Governors
of the Federal Reserve System:
The B oard o f Governors o f the Federal Reserve System announced today an amend­
ment to its Regulation R, which governs the relationships between member banks and securi­
ties dealers.
The amendment, effective January 1, will permit an officer, director or employee o f a
member bank to be an officer, director or employee o f a securities com pany that confines itself
to underwriting and dealing in securities a member bank may law fully underwrite.
Section 32 o f the Banking A ct of 1933 prohibits interlocking personnel relationships
between member banks and securities companies but that law also authorizes the Board to
provide exemptions upon determining that they would not unduly influence the investment
policies of the banks or the investment advice given to bank customers. Regulation R pres­
ently provides an exemption fo r relationships between member banks and those securities
companies that confine their business to the types o f obligations listed in the regulation. Not
all obligations a member bank may underwrite are within the Regulation R exemption in its
present form . The effect o f the amendment is to bring within the Regulation R exemption
general obligations of a State or political subdivision, obligations o f the Government National
Mortgage Association and obligations issued by a State or political subdivision (their agen­
cies) fo r housing, university or dorm itory purposes.

Regulation R will be reprinted shortly and will include the above amendment.
Copies will be sent to you as soon as they become available. In the meantime, copies
of the text of the amendment will be furnished upon request addressed to our Con­
sumer Information and Securities Regulations Department.






Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102