District Circular Letters
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January 20, 1998
REGULATION K:
STREAMLINED PROCEDURES
REGULATIONS G, T, U, and X:
REDUCTION OF REGULATORY DISTINCTIONS
and MERGING OF REGULATIONS G and U
PROPOSED FURTHER REVISIONS
TO REGULATIONS T, U, and X
GOVERNMENT DEBT MARKET IN THE NETHERLANDS
To Member Banks, Bank Holding Companies,
U.S. Branches and Agencies of Foreign Banks,
Edge Act Corporations, and Others Concerned
in the Twelfth Federal Reserve District
Proposed Comprehensive Revisions to Regulation K (Docket R-0994) (PDF file)
The Federal Reserve Board has requested comment on proposed comprehensive
revisions to its Regulation K governing international banking operations.
The proposals are intended to improve the international competitiveness
of U.S. banking organizations by expanding permissible activities abroad
and by reducing regulatory burden associated with the conduct of such
activities.
The Board is also requesting comment on proposed revisions to Regulation
K that are intended to reduce regulatory burden on foreign banks operating
in the United States by streamlining the application and notice process.
Comment is requested by March 14, 1998.
The proposed revisions include
- expansion of authority for U.S. banking organizations to engage in
equity securities underwriting and dealing outside the United States;
- relaxation of limits on the ability of U.S. banking organizations
to make venture capital investments in non-bank organizations outside
the United States;
- a streamlined and expedited review process for U.S. banking organizations
to branch abroad, and for foreign banking organizations to establish
offices in the United States;
- expedited review of proposals by well-run U.S. banking organizations
to make investments abroad;
- increased flexibility in the standard for determining whether a foreign
banking organization would qualify for certain nonbanking exemptions
from the Bank Holding Company Act;
- implementation of statutory changes with respect to increased investments
by U.S. banks in Edge corporation subsidiaries and the interstate operations
of foreign banks operating in the United States; and
- other changes to eliminate unnecessary regulatory burden and to streamline
and modernize Regulation K.
Final Amendments to Regulations Regarding Securities Credit
Transactions (Dockets
R-0905, R-0923, and R-0944)
The Board has announced adoption of final amendments to reduce regulatory
distinctions between broker-dealers, banks, and other lenders, and to
implement other changes to the Board's securities credit regulations.
The amendments to Regulations G, T, U, and X reflect changes to the
Board's statutory authority under the Securities Exchange Act of 1934,
as amended by the National Securities Markets Improvement Act of 1996,
as well as amendments designed to simplify the regulations and reduce
burden. They do not change the margin requirements for stocks and convertible
bonds.
The amendments provide for merging Regulation G into Regulation U, thereby
eliminating Regulation G. The Board also will discontinue publication
of its quarterly list of over-the-counter (OTC) market stocks that are
subject to its margin regulations for broker-dealers, effective January
1, 1999, and for other lenders effective April 1, 1998.
The final amendments are effective April 1, 1998. Compliance
with the amendment to Regulation T is optional until July 1, 1998.
Request for Comment on Proposed Revisions to Regulations T,
U, and X (Docket R-0995) (PDF file)
The Board also announced an advance notice of proposed rulemaking and
requested public comment to further amend Regulations T, U, and X.
Comment is requested by April 1, 1998.
Comment is sought on all aspects of these regulations, including issues
stemming from the consolidation of Regulation G into Regulation U.
Request for Comment on Government Debt Market in the Netherlands
(Docket
R-0997)
The Board is requesting public comment on whether U.S. companies operating
in the government debt market of the Netherlands have the same competitive
opportunities as Dutch companies in that market.
Comments must be received by February 27, 1998.
The Primary Dealers Act of 1988 provides that the Federal Reserve may
not designate a foreign person as a primary dealer if that person's home
country does not grant to U.S. companies the same competitive opportunities
in the underwriting and distribution of government debt instruments issued
by the country as the country accords to domestic companies.
Copies
Copies of the Board's notices (Docket R-0994, Docket R-0905
etc., Docket R-0995, and Docket R-0997) are
available from our Corporate Services Department. To request copies to
be sent via mail, please call (415) 974-2748. To request
copies of Dockets R-0995 and R-0997 to
be sent via fax, please call (415) 974-3333, and specify
document numbers 4191 and 4194, respectively.
Docket R-0994 and Docket R-0905 etc. are unavailable via fax due to the
length of the documents.
Additional Information
For additional information regarding these matters, please contact our
Banking Supervision and Regulation Department, at (415) 974-3007
[for Regulations K, G, T, U, and X], and the Board of Governors, at (202)
452-3786 [for the treatment of U.S. companies operating in the
government debt market of the Netherlands].
FEDERAL RESERVE BANK OF SAN FRANCISCO
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