Securities Credit Regulations
April 15, 1998
Circular No. 11046

Recent Changes and Proposed Changes in Regulations G and U

To All Registered Regulation U Nonbank Lenders
(formerly G Lenders) in the Second Federal Reserve District:

The Federal Reserve Board recently took actions to reduce regulatory distinctions between broker-dealers, banks, and other lenders, and to implement other changes to its securities credit regulations. These actions include the extension of Regulation U to cover lenders formerly subject to Regulation G, and the elimination of Regulation G. The Board also published for public comment an advance notice of proposed rulemaking relating to its securities credit rules. Among other things, the Board requested comments on the possible modification or elimination of the forms associated with Regulations G and U, and on the revision of Regulation U's registration requirements for nonbank lenders regarding dollar thresholds and for lenders who do not extend credit to purchase securities.

A copy of the recently revised Regulation U (pdf - 20kb) and a copy of the advance notice of proposed rulemaking, as published in the Federal Register of January 16 are both available as files. The period for commenting on the proposed changes to the Board's securities credit rules has been extended from April 1 to May 1, 1998 (see our Circular No. 11044, dated April 3, 1998).

If you have any questions, you may call, at this Bank, Janice A. Oser, Examining Officer. You may also call, at the Board of Governors, Peggy Wolffrum, Securities Regulations Analyst (202-452-2837), or Scott Holz, Senior Attorney (202-452-2966).