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F E D E R A L R E S E R V E BANK O F N E W YORK r Circular No. 65201 L April 9, 1970 J Am endm ents to Regulation A Elim inating N egotiability Requirement For Discounts and Advances To the M em ber Banks of the Second F ederal R eserve D istrict: T h e B o ard of G overnors of th e F e d e ra l R eserv e S ystem to d a y a d o p te d am e n d m e n ts to R e g u la tio n A effective A pril 16, 1970, rem o v in g th e re q u ire m e n t th a t p a p e r offered fo r d isco u n t o r as c o llateral fo r ad v an ces u n d e r S ection 13 of th e F e d e ra l R eserve A ct b e n eg o tiab le. P rin te d b e lo w is an e x c e rp t fro m a F ederal R eg ister n o tice c o n ta in in g th e am en d m e n ts. As in d ic a te d in th e n o tice, e lim in a tio n o f th e n e g o tia b ility re q u ire m e n t w ill n o t p re c lu d e R eserv e B anks in in d iv id u a l cases fro m d ec lin in g to a c c e p t n o n n e g o tia b le p ap e r. C opies of th e am e n d m e n ts p rin te d in th e u su al form w ill b e fu rn ish e d to y o u shortly. A d d itio n a l copies of th is c irc u la r w ill b e fu rn ish e d u p o n re q u e st. A lfred H a yes, President. PART 201 — ADVANCES AND DISCOUNTS BY FEDERAL RESERVE BANKS Negotiability of Paper 1. Effeotive April 16, 1970, P art 201 is am ended by deleting the word “negotiable” w here it occurs in sections 2 0 1 .3 (a )(1 ), 201.3(b), 201.3(d), and 201.3(e); by deleting subparagraph (2 ) of section 201.3(i); and by deleting “ ( 1 ) ” im m ediately after the catch line in section 201.3(i). 2.a. T he purpose of these am endm ents is to elimi nate the regulatory requirem ent th at paper offered by m em ber banks to the Federal Reserve Banks for discount or as collateral for advances under Section 13 of the Federal Reserve Act m ust in all cases be negotiable. T he Act does not require that such paper be negotiable; and, under present regulations, non negotiable paper may be used as collateral for ad vances under Section 10(b) of the Act, b u t such advances m ust bear a rate of interest higher than the regular Reserve Bank discount rate. I t appears u n necessary and undesirable to oontinue to require th a t paper otherw ise eligible and of good quality shall in all instances m eet technical requirem ents as to nego tiability in order to be discounted or used as collateral for advances at the regular discount rate. Elim ination of the regulatory requirem ent will not, however, p re clude a Reserve Bank in individual cases from declin ing to accept nonnegotiable paper for discount or as collateral for advances. The am endm ents are essen tially technical in nature and reflect no change in the Federal Reserve System’s general credit and m onetary policies. b. These am endm ents were adopted by th e Board w ithout following the procedures prescribed in Section 553 of Title 5, U nited States Code, relating to notice, public participation, and deferred effective date, since notice and public participation w ould have been unnecessary and would have served no useful purpose and since the am endm ents relieve a restriction in pres ent regulations of th e Board.
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