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FEDERAL RESERVE BANK OF N EW YORK 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. A lfred H ayes, President.