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7500 - FDIC FRB Regulations
{{4-28-00 p.7841}}
PART 224—BORROWERS OF SECURITIES CREDIT (REGULATION X)
Sec.
224.1
Authority, purpose and scope.
224.2
Definitions.
224.3
Margin regulations to be applied by nonexempted borrowers.
AUTHORITY: 15 U.S.C. 78g.
SOURCE: The provisions of this Part 224 appear at 48 Fed. Reg.
56572, December 22, 1983, effective January 23, 1984 and 58 Fed. Reg.
50512, September 28, 1993.
§ 224.1 Authority, purpose, and scope.
(a) Authority and purpose. Regulation X (this part) is
issued by the Board of Governors of the Federal Reserve System (the
Board) under the Securities Exchange Act of 1934, as amended (the Act)
(15 U.S.C. 78a et seq.). This part implements section 7(f) of the Act
(15 U.S.C. 78g(f)), the purpose of which is to require that credit
obtained within or outside the United States complies with the
limitations of the Board's Margin Regulations T and U
(12 CFR Parts 220, and
221, respectively).
(b) Scope and exemptions. The Act and this part apply
the Board's margin regulations to United States persons and foreign
persons controlled by or acting on behalf of or in conjunction with
United States persons (hereinafter borrowers), who obtain credit
outside the United States to purchase or carry United States
securities, or within the United States to purchase or carry any
securities (both types of credit are hereinafter referred to as purpose
credit). The following borrowers are exempt from the Act and this part:
(1) Any borrower who obtains purpose credit within the United
States, unless the borrower willfully causes the credit to be extended
in contravention of Regulations T or U.
(2) Any borrower whose permanent residence is outside the United
States and who does not obtain or have outstanding, during any calendar
year, a total of more than $100,000 in purpose credit obtained outside
the United States; and
(3) Any borrower who is exempt by Order upon terms and conditions
set by the Board.
[Codified to 12 C.F.R. § 224.1]
[Section 224.1 amended at 63 Fed. Reg. 2839, January 16, 1998,
effective April 1, 1998]
§ 224.2 Definitions.
The terms used in this part have the meanings given to them in
sections 3(a) and
7(f) of the Act, and in
Regulations T and U. Section 7(f) of the Act contains the following
definitions:
(a) "United States person" includes a person which is
organized or exists under the laws of any State or, in the case of a
natural person, a citizen or resident of the United States; a domestic
estate; or a trust in which one or more of the foregoing persons has a
cumulative direct or indirect beneficial interest in excess of 50 per
centum of the value of the trust.
(b) "United States security" means a security (other than an
exempted security) issued by a person incorporated under the laws of
any State, or whose principal place of business is within a State.
(c) "Foreign person controlled by a United States person"
includes any noncorporate entity in which United States persons
directly or indirectly have more than a 50 per centum beneficial
interest, and any corporation in which one or more United States
persons, directly or indirectly, own stock possessing more than 50 per
centum of the total combined voting power of all classes of stock
entitled to vote, or more than 50 per centum of the total value of
shares of all classes of stock.
[Codified to 12 C.F.R. § 224.2]
{{4-28-00 p.7842}}
[Section 224.2 amended at 63 Fed. Reg. 2839, January 16, 1998,
effective April 1, 1998]
§ 224.3 Margin regulations to be applied by nonexempted
borrowers.
(a) Credit transactions outside the United States. No
borrower shall obtain purpose credit from outside the United States
unless it conforms to the following margin regulations:
(1) Regulation T (12 CFR part
220) if the credit is obtained from a foreign branch of a
broker-dealer;
(2) Regulation U (12 CFR part
221), as it applies to banks, if the credit is obtained from a
foreign branch of a bank, except for the requirement of a purpose
statement (12 CFR
221.3(c)(1)(i) and (c)(2)(i)); and
(3) Regulation U (12 CFR part 221), as it applies to nonbank
lenders, if the credit is obtained from any other lender outside the
United States, except for the requirement of a purpose statement (12
CFR 221.3(c)(1)(ii) and (c)(2)(ii)).
(b) Credit transactions within the United States. Any
borrower who willfully causes credit to be extended in contravention of
Regulations T and U (12 CFR parts 220 and 221), and who, therefore, is
not exempted by § 224.1(b)(1), must conform the credit to the margin
regulation that applies to the lender.
[Codified to 12 C.F.R. § 224.3]
[Section 224.3 amended at 63 Fed. Reg. 2839, January 16, 1996,
effective April 1, 1998]
[End FRB Regulations (Volume 2)]
[The tab card "Miscellaneous Statutes and Regulations"
(Volume 3) follows this.]
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