Regulations Affecting Securities Credit
Summary
|
 Reg
T governs extension of credit by securities brokers and dealers,
including all members of national securities exchanges
 Reg
U governs extension of credit by banks or persons other than brokers or
dealers to finance the purchase or the carrying of margin securities
- Margin securities include any equity
security registered on a national securities exchange, such as the
New York
Stock Exchange or the
American Stock Exchange; any over-the-counter (OTC) security trading in the
Nasdaq Stock Market's
National Market; any debt security convertible into a margin stock; and most
mutual funds
- Covers entities that are
not brokers or dealers, including commercial banks, savings and loan
associations, federal savings banks, credit unions, production credit
associations, insurance companies, and companies that have employee stock option
plans
- No lender shall extend any
purpose credit, secured directly or indirectly by margin stock, in an
amount that exceeds the maximum loan value of the collateral securing the credit
- A "purpose loan" is one which is
made for the purpose of purchasing or carrying margin stock
- Lender may continue
to maintain any credit initially extended in compliance with the regulation
regardless of a reduction in the customer's equity resulting from a change in
market price or a change in the status of the security securing an existing
purpose credit
-
Reg U Small Entity Compliance Guide
Reg
X applies the provisions of Regs T and U to borrowers who are
subject to US laws and who obtain credit within or outside the United States
for the purpose of purchasing securities
- A borrower who obtains credit
within the United States to purchase or
carry securities issued by any company is
subject to Reg X only in the event that the borrower willfully causes the
credit to be extended in contravention of Reg T or U
- Generally, a borrower who obtains credit
outside the United States to purchase or
carry securities issued by a company incorporated in
the United States is subject to Reg X if the borrower is a
"US person" (a company incorporated in the United States, a US citizen, or a
US resident) or a non-US person controlled by or acting on behalf of or in
conjunction with a US person
- Borrowers subject to Reg X have the burden
of ensuring that the credit they obtain conforms to Reg T or U
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Proposed
Amendments
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Reg
T
- To clarify the treatment of stock futures held by
customers at a security futures intermediary comments due
11.15.02
There
are currently no proposed amendments to Regs U and X
9.03.06
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Recent
Amendments
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There
have been no recent amendments to any of Regs T, U and X
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Rules
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12
CFR Part 220 Credit by brokers and
dealers Reg T
-
220.1 Authority, purpose, and scope
-
220.2 Definitions
-
220.3 General provisions
-
220.4 Margin account
-
220.5 Special memorandum account
-
220.6 Good faith account
-
220.7 Broker-dealer credit account
-
220.8 Cash account
-
220.9 Clearance
of securities, options, and futures
Clearance of securities, options, and futures
-
220.10 Borrowing and lending
securities
-
220.11 Requirements for the list of
marginable OTC stocks
and the list of foreign margin stocks -
220.12 Supplement: margin requirements
-
220.101 Transactions of customers who
are brokers
or
dealers -
220.103 Borrowing of securities
-
220.105 Ninety-day rule in special cash
account
-
220.108 International Bank Securities
-
220.110 Assistance by Federal credit
union to its
members
-
220.111 Arranging for extensions of credit to be made by
a bank -
220.113 Necessity for prompt payment
and delivery
in
special cash accounts
-
220.117 Exception to 90-day rule in special cash account
-
220.118 Time of payment for mutual fund shares
purchased in a special cash account
-
220.119 Applicability of margin
requirements to credit
extended to corporation in connection with
retirement of stock
-
220.121 Applicability of margin
requirements to joint
account between two creditors
-
220.122 ''Deep in the money put and call options'' as
extensions of credit
-
220.123 Partial delayed issue contracts covering
nonconvertible bonds
-
220.124 Installment sale of tax-shelter
programs as
''arranging'' for credit
-
220.127 Independent broker/dealers
arranging credit
in
connection with the sale of insurance premium
funding programs
-
220.128 Treatment of simultaneous long
and short
positions in the same margin account when put or
call options or combinations thereof on such
stock are also outstanding in the account
-
220.131 Application of the arranging section to broker-
dealer activities under SEC Rule 144A
-
220.132 Credit to brokers and dealers
12
CFR Part 221 Credit by banks and
persons other
than brokers and dealers Reg U SEC_CODE_REF_0090001192884
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221.1 Authority, purpose, and scope
-
221.2 Definitions
-
221.3 General requirements
-
221.4 Employee stock option,
purchase, and
Employee
stock option, purchase, and ownership plans
-
221.5 Special purpose loans to
brokers and dealers
-
221.6 Exempted transactions
-
221.7 Supplement: Maximum loan value
of margin
stock
and other collateral
-
221.101 Determination and effect of
purpose of loan
-
221.102 Application to committed credit
where funds
are
disbursed thereafter
-
221.103 Loans to brokers or dealers
-
221.104 Federal credit unions
-
221.105 Arranging for extensions of credit to be made by
a bank
-
221.106 Reliance in ''good faith'' on statement of purpose
of loan
-
221.107 Arranging loan to purchase open-end investment
company shares
-
221.108 Effect of registration of stock
subsequent to
making of loan
-
221.109 Loan to open-end investment
company
-
221.110 Questions arising under this
part
-
221.111 Contribution to joint venture
as extension of
credit when the contribution is disproportionate
to the contributor's share in the venture's
profits or losses
-
221.112 Loans by bank in capacity as
trustee
-
221.113 Loan which is secured
indirectly by stock
-
221.114 Bank loans to purchase stock of American
Telephone and Telegraph Company under
Employees' Stock Plan
-
221.115 Accepting a purpose statement
through the
mail
without benefit of face-to-face interview
-
221.116 Bank loans to replenish working capital used to
purchase mutual fund shares
-
221.117 When bank in ''good faith'' has not relied on stock
as collateral
-
221.118 Bank arranging for extension of credit by
corporation
-
221.119 Applicability of plan-lender
provisions to
financing
of stock options and stock purchase rights
qualified or restricted under Internal Revenue
Code
-
221.120 Allocation of stock collateral
to purpose and
nonpurpose credits to same customer
-
221.121 Extension of credit in certain
stock option
and
stock purchase plans
-
221.122 Applicability of margin
requirements to credit
in
connection with Insurance Premium Funding
Programs
-
221.123 Combined credit for exercising employee stock
options and paying income taxes incurred as a
result of such exercise
-
221.124 Purchase of debt securities to finance corporate
takeovers
-
221.125 Credit to brokers and dealers
12
CFR Part 224 Borrowers of
securities credit Reg X
-
224.1 Authority, purpose, and scope
-
224.2 Definitions
-
224.3 Margin regulations to be applied by nonexempted
borrowers
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