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FEDERAL RESERVE BANK OF NEW YORK March 10, 1982 REGULATION U New Statement of Purpose Form To A ll Banks, and Others Concerned, in the Second Federal Reserve District: The Board of Governors of the Federal Reserve System has revised its Statement of Purpose form under Regulation U (Form U -l), which must be completed when a bank extends credit under that Regulation. The instructions and the data required on the form have been reduced to alleviate the reporting burden on banks, and the use of the form has been limited to loans that are secured by margin stock (rather than by any stock). The superseded Form U-l (Rev. 12/76) should no longer be used. Banks will be expected to reproduce their own supply of the new form. Questions regarding reporting requirements under Regulation U may be di rected to our Regulations Division (Tel. No. 212-791-5914). A nthony M. S olom on, President. F.R. U-1 O.M.B. No. 7100-0115 Approval expires March 1985 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Statement of Purpose for an Extension of Credit Secured By Margin Stock Name of Bank (Federal Reserve Form U-1) T h is form is required by law (15 U .S.C . 78g and 78w; 12 C F R 221). INSTRUCTIONS 1. T h is form m ust be com pleted when a bank extend s credit (bonds) that are convertible into margin sto c k s ; and (3) sh are s of secu re d directly or in d irectly, in whole or in part, by any margin m utual funds, u n le ss 95 per cent of the a s s e ts of the fund are con s to c k . tin u o u sly invested in U.S. governm ent, ag ency, S tate, or m unicipal o b lig ation s. 2. T h e term “ m argin sto c k ” is defined in Regulation U (12 C F R 221) and in clu d es, p rin cip ally: (1) s to c k s that are registered on a na 3. P le ase print or type (if sp ace is inadequate, attach separate tio n al se c u ritie s exchan ge or that are on the Federal Reserve B o a rd ’s L ist of O TC Margin S to c k s ; (2) debt sheet). se cu ritie s P A R T I. To be com pleted by borrower(s) 1. W hat is the am ount of the credit being extended? ______________________________________________________ 2. W ill any part of th is credit be used to pu rchase or carry margin sto ck? I f the answ er is “ n o ” , d escribe the sp e c ific purpose of the credit CD Y e s EH No ___________________________________ ___ I (we) have read th is form and ce rtify that to the best of my (our) lateralizing th is credit are au th en tic, genuine, unaltered, and not know ledge and belief the inform ation given is true, accu ra te , and sto len , forged, or counterfeit. co m p lete, and that the margin sto ck and any other s e cu ritie s col- Sig n ed : Borrower’s Signature Print or Type Name Signed: Date Borrower’s Signature Print or Type Name This form should not be signed in blank. A borrower who falsely certifies the purpose of a credit on this form or otherwise w illfully or intentionally evades the provisions of Regulation U will also violate Federal Reserve Regulation X, “ Rules Governing Borrowers Who Obtain Securities Credit” Date PART II. To be com p le te d by bank only if the purpose o f the cred it is to purchase or carry m argin sto ck (Part 1(2) answ ered “ y e s”) 1. L ist the margin sto ck secu rin g th is credit; do not include debt s e cu ritie s convertible into m argin sto ck. The m axim um loan value of margin sto ck i s ........ per cent of its current m arket value under the current Supplem ent to Regulation U. Issu e No. of Market price Date and so urce Total market per share s h a re s of valuation value per issu e (S ee note below) / 2. L ist the debt se c u ritie s convertible into margin sto ck securing th is credit. The m axim um loan value of su ch debt s e cu ritie s i s ........ per cent of the current m arket value under the current Supplem ent to Regulation U. P rin cip al Issu e M arket price Date and so urce Total market of valuation am ount value per issu e (S ee note below) 3. L is t other co llateral including non-margin sto ck securing th is credit. D escrib e briefly Market price Date and so urce Good faith of valuation loan value (See note below) Note: Bank need not complete “ Date and source of valuation” if the market value was obtained from regularly published information in a journal of general cir culation. P A R T III. To be sig ne d by a bank o ffic e r in a ll instances I am a duly authorized o ffice r of the bank and understand that this the written co n sen t of the registered owner to pledge such credit secu red by margin sto ck may be su b ject to the credit re stric se c u ritie s . I fu rth e r c e rtify th a t any secu ritie s th a t have been or w ill tio n s of Regulation U. I have read this form and any attachm en ts, be p h ysica lly delivered to the bank in con ne ction w ith this credit and I have accep ted the cu sto m er’s statem ent in Part I in good have been or w ill be exam ined, that all validation procedures re faith a s required by Regulation U**, and I ce rtify that to the best of quired by bank policy and the S e cu ritie s E xch an g e A ct of 1934 (s e c my know ledge and belief, all the inform ation given is true, a c tion 17(f), a s am ended) have been or will be performed, and that I cu ra te , and com plete. I also certify that if any se c u ritie s that d irect am satisfie d to the best of my knowledge and belief that such ly se cu re the credit are not or w ill not be registered in the name of se c u ritie s are genuine and not stolen or forged and their fa c e s have the borrower or its nom inee, I have or w ill ca u s e to have exam ined not been altered. Signed: Date Bank officer’s signature jjt ie Print or type name * *To accept the customer’s statement in good faith, the officer of the bank must be alert to the circumstances surrounding the credit and, if in possession of any information that would cause a prudent person not to accept the statement without inquiry, must have investigated and be satisfied that the statement is truthful. Among the facts which would require such investigation are receipt of the statement through the mail or from a third party. This form must be retained by the bank for at least three years after the credit is extinguished.
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