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r FED ER AL RESERVE BANK O F NEW YORK January 16, 1979 SECURITIES OF MEMBER STATE BANKS Amendments to Regulation F To Conform With SEC Rules To A ll State Member Banks in the Second Federal Reserve District: The Board of Governors of the Federal Reserve System has amended, effective January 29, 1979, its Regulation F “ Securities of Member State Banks” in order to conform the Board’s rules for member bank disclosures to stockholders to those adopted by the Securities and Exchange Commission. ( The Regulation F pamphlet is currently being reprinted to include these amend ments ; a copy of the revised pamphlet will be sent to you as soon as it is available.) fhe following statement— adapted from the Board of Governors’ press release of March 9, 1978, which announced the Board’s proposal to revise the regulation— summarizes the amendments: 1 lie law requires the Board to revise Regulation F to be substantially similar to comparable rules and regulations of the SEC unless the Board finds that it is not necessary or appropriate to do so. Banks with more than 500 stockholders are subject to the disclosure rules of the Board’s Regulation F. 1 o be consistent with recent changes in SEC rules the Board has revised Regulation F as follow s: Confidentiality of preliminary proxy and information statements Preliminary proxy material filed with the Board will be made publicly available after definitive mate rial is filed, unless the person filing the material requests that it be accorded confidential treatment and the Board determines such treatment is appropriate. Proposals by stockholders — If a stockholder notifies management of the stockholder’s intention to make a proposal at a forthcoming stockholders’ meeting, management is generally required to publish the proposal in its proxy form. The B oards revisions include new rules regarding (a ) stockholders eligibility for making proposals; (b ) provid ing for advance notice to be given to management, and the nature of the n otice; ( c ) the number and length of proposals that can be made by stockholders; and (d ) management’s obligations if it opposes a proposal, and conditions under which management may omit proposals. Dissemination of proxy information I he Board has adopted a provision, similar to the SE C ’s rules, specifying that where a stock issuer is aware that any of its securities are being held by a stockholder of record who is not the beneficial owner, the issuer shall inquire of the stockholder of record as to the number of materials (such as annual reports) needed for distribution to beneficial owners. Tender offers State member banks will be required to file a new form that requires persons making certain tender offers to disclose the identity and background of those making such offers, and their plans and transactions (other than those made in the ordinary course of business) with the company for which the tender offer is made. In addition, banks will be required to disclose whether any loan financing involved in the offer is related to the maintenance of correspondent deposits by the bank for which the offer is made. Deferral of certain reporting requirements — I he Board has revised its rules to eliminate a requirement that certain events be reported within 10 days of the end of the month in which they occur and substituted a requirement that such events be reported on a quarterly basis. F Stock appreciation rights — The Board has exempted from its rules the settlement of stock appreciation rights with respect to “ in siders” securities transactions. F Questions regarding the amendments may be directed to our Regulations Division (Tel. No. 212-791-5914). P a u l A. VOLCKER, P President.
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