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FEDERAL RESERVE BANK
O F NEW YORK
P C ircular No. 7 6 93 ~j
|_ A ugust
1975
22,
J
MARGIN REGULATIONS
Withdrawal of Proposed Amendments to Regulations G, T, and U
In All Persons Extending Securities Credit
in the Second Federal Resene District:
The Board of Governors of the Federal Reserve System has withdrawn proposals to amend its margin
Regulations G and U, with respect to “clearance”transactions, and to amend margin Regulation T to
shorten the time allowed for payment against delivery transactions in securities from 35 days to 15 days.
Printed below is the text of the Board of Governors’order in this matter.
P A U L A. V O L C K E R .
President.
|Regs. G, T, and U]
SECURITIES CREDIT TRANSACTIONS
Withdrawal of Notices of Proposed Rulemaking
(Regs. G & U]
Notice is hereby given that the Board of Governors
withdraws notices (36 F. R. 14032 and 14035) published
in the Federal Register on July 29, 1971, on which
comments were solicited, which proposed a new
paragraph (1) of §207.1 of Regulation G and proposed
an amendment of §221.1(a) of Regulation U.
The proposals were intended to prevent a person
subject to the registration requirement of §207.1(a) of
Regulation G, or a bank subject to Regulation U, from
providing "clearance”for any customer for securities
purchased through a broker or dealer unless a deposit
of the purchase price with the lender by the customer is
made within seven full business days, and in any event,
before delivery to any other person; or in case of sales,
the lender promptly receives from the customer the
security sold and does not accept payment for a security
sold until he has received the security from the
customer.
After consideration of the comments received,
which reflected difficulty in implementing certain
provisions of the proposals, and in the interest of
allowing time for additional study and evaluation of the
proposals in light of the comprehensive system of
clearance and settlement contemplated by the Securities
Acts Amendments of 1975 (P.L. 94-29), the Board has
determined that the rulemaking action referred to
above, should be withdrawn.
In view of the foregoing, the proposals published in
the F e d e r a l Register {36 F. R. 14032 and 14035) on July
29. 1971 are hereby withdrawn.
By order of the Board of Governors, August 13,
1975.
[Reg. T]
Notice is hereby given that the Board of Governors
withdraws a notice (37 F. R. 25547) published in the
Federal Register on December 1, 1972, on which
comments were solicited which proposed an amendment
to § 220.4(c)(5) of Regulation T. The proposed
amendment would have shortened the time allowed for
payment against delivery transactions in securities from
35 days to 15 days.
A number of comments were received in response
to the notice; all of them either opposed the amendment
or suggested substantial change. Many commentators
were in accord with the purpose of the proposed
amendment, which was to speed up the consummation
of securities transactions, but suggested that its
enactment would create undue hardship unless in
tegrated with a comprehensive system involving all
facets of the settlement process. In view of the
enactment of the Securities Acts Amendments of 1975
(P. L. No. 94-29) which is intended to facilitate the
development of such a comprehensive system, the Board
has determined that the proposed rulemaking action is
not appropriate at the present time and the proposal,
therefore, should be withdrawn.
In view of the foregoing, the proposal published in
the Federal Register (37 F. R. 25547) on December 1.
1972, is hereby withdrawn.
By order of the Board of Governors, August 13,
1975.