FEDERAL RESERVE SYSTEM
12 CFR Part 250
[Miscellaneous Interpretations; Docket R-1015]
Applicability of Section 23A of the Federal Reserve Act to the Purchase of Securities from Certain Affiliates
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Notice; request for comments.
SUMMARY: Section 23A of the Federal Reserve Act restricts the ability of a member bank to fund its affiliates through asset purchases, loans, or certain other transactions (covered transactions). The Board is proposing to expand the types of asset purchases that are eligible for the exemption in section 23A(d)(6), which permits asset purchases where the assets have a readily identifiable and publicly available market quotation. This proposal would expand the ability of an insured depository institution to purchase securities from its registered broker-dealer affiliates, while still ensuring that the transactions are conducted in a manner that is consistent with safe and sound banking practices.
DATES: Comments must be submitted on or before July 21, 1998.
ADDRESSES: Comments, which should refer to Docket No. R-1015, may be mailed to Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, D.C. 20551. Comments addressed to Ms. Johnson also may be delivered to the Board's mail room between 8:45 a.m. and 5:15 p.m. and to the security control room outside of those hours. Both the mail room and the security control room are accessible from the courtyard entrance on 20th Street between Constitution Avenue and C Street, N.W. Comments may be inspected in Room MP-500 between 9:00 a.m. and 5:00 p.m. weekdays, except as provided in § 261.12 of the Board's Rules Regarding Availability of Information.
FOR FURTHER INFORMATION CONTACT: Pamela G. Nardolilli, Senior Counsel (202/452-3289) or Satish M. Kini, Senior Attorney (202/452-3818), Legal Division; or Molly S. Wassom, Deputy Associate Director, Banking Supervision and Regulation (202/452-2305), Board of Governors of the Federal Reserve System. For the hearing impaired only, Telecommunications Device of the Deaf (TDD), Diane Jenkins (202/452-3254).
Proposed rule on purchases of securities (22 KB PDF)
Proposed exemptions for certain extensions of credit (27 KB PDF)
1998 Banking and consumer regulatory policy