Full text of Federal Reserve Bank of New York Circulars : Additional Sections of Proposed New Regulation on Securities of Member State Banks

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FEDERAL RESERVE BANK
OF N E W YORK

September 11, 1964

Additional Sections of Proposed New Regulation
on Securities of Member State Banks
To State Member Banks in the Second Federal Reserve District:

The following statement was made public yesterday by the Board of Governors of the Federal
Reserve System:
The Board o f Governors of the Federal Reserve System today filed for publication in the Federal
R egister, and for comments by interested persons, the final sections o f a proposed new Regulation with
respect to “ Securities o f Member State B anks.” The two additional sections are similar to proposed regu­
lations that are being published fo r comment by the Federal Deposit Insurance Corporation.
Under the Securities Exchange A ct o f 1934, as recently amended, banks with 750 or more holders of
one class o f stock must register such stock with the appropriate Federal bank supervisory agency. In the
case o f State-chartered banks that are members of the Federal Reserve System, this and related provisions
of the amended Securities Exchange A ct are administered by the Board of Governors o f the Federal
Reserve System.
On August 21, the Board issued its proposed Regulation, with the exception o f the two sections released
today. The first of the additional sections deals with “ Reports o f Directors, Officers, and Principal Stock­
holders.” It relates to section 16 o f the Securities Exchange A ct, which requires the directors, officers, and
large stockholders of a corporation with registered securities to file reports o f their holdings, purchases,
and sales of the com pan y’s stock. Section 16 permits a corporation to recover profits realized by such
“ insiders” from short-term purchase/sale transactions in its stock.
The last section of the proposed Regulation relates to the “ Form and Content of Financial Statements.”
It specifies requirements as to accounting procedures and form s to be observed by banks in connection with
registration statements and supplementary reports to be filed with the Federal Reserve Board for public
inspection.
Like those previously released, these sections are designed to stimulate study by bankers and others
and to elicit suggestions fo r revision that would result in regulations effectuating the purposes of the
Securities Exchange A ct without imposing unnecessary burdens and expense upon the banking industry.
Comments on the proposed additional sections o f the Regulation may be submitted to the Board not
later than October 21, and comments on the sections o f the proposed Regulation issued August 21 also will
be received until October 21. Copies will be available fo r inspection at the offices of the Federal Reserve
Banks throughout the country.

Copies of the complete proposed regulation are available for inspection at the Bank Examina­
tions Department of our Head Office and at our Buffalo Branch.


19 14


A lfred H ayes,

President.

FIFTIETH

ANNIVERSARY

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