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FED E R A L R E S ER V E BANK OF NEW YORK February 5, 1974 PROPOSED AMENDMENT TO REGULATION F To Require Disclosure of Standby Letters of Credit T o State M em ber Banks in the Second Federal R eserve D istrict: The Board of Governors of the Federal Reserve System has Regulation F, “ Securities of Member State Banks,” to require outstanding standby letters of credit on financial statements of regulation. The intent of the proposed amendment is to inform a bank’s potential liabilities. proposed an amendment to its disclosure of the amounts of banks that are subject to the the public more adequately of Printed below is the text of the proposed amendment. Comments thereon should be submitted by March 15, and may be sent to our Regulations and Bank Analysis Department. A lfred H a y e s , President. (Reg. F) SECURITIES OF MEMBER STATE BANKS Disclosure of Standby Letters of Credit T h e B oard proposes to amend the disclosure require ments o f R egulation F , “ Securities o f M em ber State Banks,” to require disclosure o f the amounts o f out standing standby letters o f credit on financial statements o f banks that are subject to the regulation. Such dis closure would m ore adequately in form the public o f a bank’s potential liabilities. A standby letter o f credit is any letter o f credit or similar arrangement, how ever named or described, other than a com m ercial letter o f credit issued to facilitate the sale o f goods, o f the character under which sight drafts or bankers’ acceptances o f the kind eligible, or which w ould becom e eligible, fo r discount by a Federal R e serve Bank under Regulation A , could be drawn. Standby letters o f credit w ere the subject o f a proposed amendment to the B oa rd ’s Regulation H (1 2 C F R 2 0 8 ) “ M em bership o f State B anking Institutions in the Federal R eserve System ,” b y B oard action dated Jan uary 17, 1974. T his notice is published fo r comm ent pursuant to Section 5 5 3 (b ) o f T itle 5, U nited States C ode, and S ec tion 2 6 2 .2 (a ) o f the R ules o f P rocedure o f the B oard o f G overnors. T h e proposal w ould be adopted pursuant to the B oard ’s authority under Section 1 2 ( i ) o f the Securities E xchan ge A ct o f 1934 (1 2 U .S .C . 7 8 ). A n y comm ents should be submitted in w riting to the Secretary, B oard o f G overn ors o f the Federal R eserve System, W ashington, D . C. 20551, to be received not later than M arch 15, 1974. Such material will be avail able fo r inspection and copyin g on request, except as p rovided fo r in section 2 6 1 .6 (a ) o f the B oa rd ’ s Rules R egarding A vailability o f Inform ation. T o implement its proposal, the B oard is considering am ending Regulation F (1 2 C F R 2 0 6 ) as fo llo w s : S E C T I O N 206.7— F O R M A N D C O N T E N T O F F IN A N C IA L S T A T E M E N T S * (c) * * P rov ision s o f gen eral a p p lica tio n * * * ( 9 ) G en eral notes to b a la n ce sheets * * * (v iii) Standby letters o f credit. State the amount and briefly describe the general terms o f outstanding “ standby letters o f credit” . A “ standby letter o f credit” is any letter o f credit or similar arrangement, how ever named or described, other than a com m ercial letter o f credit issued to facilitate the sale o f goods, o f the char acter under which sight drafts or bankers’ acceptances o f the kind eligible, o r which w ould becom e eligible, fo r discount by a Federal R eserve bank under R egula tion A , could be drawn. It w ould include, but not be limited to, letters o f credit attached to prom issory notes, i.e., so-called “ docum ented discount notes.” * * *
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