[Federal Register Volume 72, Number 238 (Wednesday, December 12, 2007)]
[Rules and Regulations]
[Page 70486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-24052]


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FEDERAL RESERVE SYSTEM

12 CFR Part 220

[Regulation T; Docket No. R-1301]


Credit by Brokers and Dealers

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule; correcting amendment.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
is amending Regulation T (Credit by Brokers and Dealers) to correct a 
cross-reference in one of its interpretations.

DATES: Effective Date: December 12, 2007.

FOR FURTHER INFORMATION CONTACT: Scott Holz, Senior Counsel, Legal 
Division (202-452-2966). For users of the Telecommunications Device 
(TDD) only, please call 202-263-4869.

SUPPLEMENTARY INFORMATION: The National Securities Markets Improvement 
Act of 1996 (NSMIA). (Pub. L. 104-290, 110 Stat. 3416) amended section 
7 of the Securities Exchange of 1934 (15 U.S.C. 78g) to limit the 
Board's authority to impose restrictions on credit extended, 
maintained, or arranged to or for a member of a national securities 
exchange or a registered broker or dealer, a substantial portion of 
whose business consists of transactions with persons other than brokers 
or dealers, or to finance its activities as a market maker or an 
underwriter. Restrictions on these types of credit were found at that 
time in Regulations G, T and U (12 CFR Parts 207, 220, and 221, 
respectively).
    NSMIA gave the Board the authority to maintain or adopt 
restrictions on these types of credit if it determines that such action 
is necessary or appropriate in the public interest or for the 
protection of investors. In November 1996, the Board adopted an 
interpretation of its margin regulations (1996 interpretation), 
indicating that the Board had not made such a finding (61 FR 60166, 
November 26, 1996). The 1996 interpretation stated the Board's belief 
that the restrictions on these types of credit found in the Regulations 
G, T and U had been superseded by NSMIA.
    NSMIA also repealed section 8(a) of the Securities Exchange Act of 
1934, dealing with extensions of credit to brokers and dealers 
collateralized with exchange-traded securities. The Board's 1996 
interpretation indicated that the provisions in Regulations G, T and U 
adopted to implement section 8(a) of the Securities Exchange Act of 
1934 were without effect in light of NSMIA.
    The text of the 1996 interpretation was published as part of 
Regulation G, and Regulations T and U were amended with interpretations 
that referred to the text of the 1996 interpretation appearing in 
Regulation G.
    In 1998, the Board adopted regulatory amendments to remove the 
restrictions that conflicted with NSMIA (63 FR 2806, January 16, 1998). 
As part of this process, the Board amended the 1996 interpretation to 
delete references to the conflict between the regulations and NSMIA. 
The remaining provisions of Regulation G, including the amended 1996 
interpretation, were incorporated into Regulation U. However, the 
reference in Regulation T to the text of the 1996 interpretation was 
inadvertently not changed to reflect the elimination of Regulation G. 
Today's action will correct this cross-reference by amending Regulation 
T to reflect the fact that the text of the amended 1996 interpretation 
now appears in Regulation U.

List of Subjects in 12 CFR Part 220

    Banks, banking, Brokers, Credit, Federal Reserve System, Margin, 
Margin requirements, Reporting and recordkeeping requirements, 
Securities.

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For the reasons set forth in the preamble, part 220 is amended to read 
as follows:

PART 220--CREDIT BY BROKERS AND DEALERS (REGULATION T)

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1. The authority citation for part 220 continues to read as follows:

     Authority: 15 U.S.C. 78c, 78g, 78q, and 78w.


Sec.  220.132  [Amended]

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2. In Sec.  220.132, introductory paragraph, replace the phrase ``Sec.  
207.114'' with ``Sec.  221.125.''


    By order of the Secretary of the Board, acting pursuant to 
delegated authority for the Board of Governors of the Federal 
Reserve System, December 7, 2007.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. E7-24052 Filed 12-11-07; 8:45 am]
BILLING CODE 6210-01-P