The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FED ER AL RESERVE BANK O F NEW YORK r L Circular No. 7 2 9 1 1 December 11, 1973 J A M E N D M E N T T O M A R G IN R E G U L A T IO N G Transfers o f C red it Between Regulation G Registrants To A ll Regulation G Registrants, and Others Concerned, in the Second Federal R eserve D istrict: Enclosed is a copy o f an amendment, effective December 6, 1973, to Regulation G, “ Securities Credit by Persons Other Than Banks, Brokers, or Dealers,” o f the Board of Governors o f the Federal Reserve System. In submitting the amendment for publication in the Federal Register, the Board o f Governors made the following statement: Pursuant to section 7 of the Securities Exchange Act of 1934 (15 U.S.C. 78g), the Board is adopting the following amendment to Part 207 by adding section 207.4(g). The change provides for the transfer of credit from one person registered with the Federal Reserve System pursuant to Regulation G to another such registrant. * * * * * * The Board has found, based upon its experience in administering Regulation G, that its inspection pro cedures with respect to persons registered pursuant to the regulation provide safeguards against possible cir cumvention of the regulation by means of transfer equivalent to those under Regulations T and U. The lack of a transfer provision similar to parallel provisions in Regulations T and U imposes a hardship on borrowers if credit under Regulation G is undermargined prior to transfer. For the reasons stated above and since the borrower may not be able to exercise control over the creditor’s decision to transfer a credit, the Board finds that the hardship has become undue. Since the amendment relieves this hardship to the extent warranted by the Board’s experience in administering Regulation G, the Board finds that compli ance with the provisions of 5 U.S.C. §553 with respect to notice and public participation is unnecessary and contrary to the public interest. The requirement of 5 U.S.C. §553 with respect to delayed effective date was not followed in connection with this amendment because it relieves a restriction. Additional copies o f the enclosure will be furnished upon request. A lfred H ayes , President. \ Board of Governors of the Federal Reserve System SECURITIES CREDIT BY PERSONS OTHER THAN BANKS, BROKERS, OR DEALERS A M E N D M E N T T O R E G U L A T IO N G Effective December 6 , 1973, section 207.4 is amended by adding a new paragraph (g) thereto, to read as follows: SECTION 207.4—MISCELLANEOUS PROVISIONS (g) Transfers. A person who is registered pursuant to the requirement of § 207.1(a) of this part may, without following the require ments of this part as to the extension of a credit, accept the transfer of a credit originally extended in conformity with the requirements of this part directly from another such person: Provided, That the statement of purpose, ex ecuted by the customer in connection with the original extension of credit and accepted in good faith and signed by the transferor in conformity with the requirements of § 207.1(e) of this part, is obtained and kept with each such transferee account: And provided further, That any transfer pursuant to this paragraph is made as a bona fide incident to a transaction not undertaken for the purpose of avoiding the requirements of this part, the amount of the credit in connection with the transfer is not increased, and the collateral for the transferred credit is not changed; and, after such transfer, a lender may permit such withdrawals and sub stitutions of collateral as are permitted in re spect to a credit it extends subject to this part. P R IN T E D IN N E W YORK
@FedFRASER