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FEDERAL RESERVE BANK OF NEW YORK C ir c u la r N o. 6 4 4 5 N o v e m b e r 2 6 , 196 9 REGULATIONS D AND Q Further Time to Adjust to October 29 Determination on Obligations of Subsidiaries of Member Banks To the Member Banns of the Second Federal lleserve District: Following is the text of a statement issued today by the Board of Governors of the Federal Reserve System: The Board of Governors of the Federal Reserve System announced today that further time will be given to member banks to adjust to a determination by the Board on October 29 relating to com m ercial paper issued by bank sub sidiaries. In that determination, the Board pointed out that obligations of bank sub sidiaries are, under present provisions of Regulations Qand D, subject to inter est rate limitations and reserve requirements to the same extent as obligations issued directly by the bank. Following matter: is the text of a letter to the Federal Reserve Banks on this "The Board today adopted the following in furtherance of its actions on October 2 9 and November 4 concerning the status of certain types of obligations issued by bank subsidiaries under Regulations D and Q: "1. Regulation Q. The Board has further suspended until January 15, 1970, the limitations on the rate of interest that may be specified in com m ercial paper or sim ilar obligations with a maturity of 30 days or more issued by a subsidiary of a member bank, to the extent that the total amount of such obliga tions does not exceed the total amount of the subsidiary's com m ercial paper outstanding on October 29. ” 2. Regulation D. The Board regards it as appropriate for a Reserve Bank to waive penalties for member bank reserve deficiencies in reserve periods before January 15, 1970, that result from the treatment of bank sub sidiary obligations as deposits, to the extent that the total amount of such ob li gations does not exceed the total amount of the subsidiary's com m ercial paper outstanding on October 29. ” 3. Discount window accommodation. The Board continues to regard it as appropriate for a Reserve Bank to provide accommodation at the discount window for member banks affected by the October 29 determination, in order to allow such banks a reasonable time to adjust in an orderly manner to that determination." The October 29 determination by the Board of Governors, referred to in the above statement, is contained in our Circular No. 6429, which was sent to you on that date. Additional copies of this circular will be furnished upon request. Alfred Hayes, President.
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