Circular
Section 23A of Federal Reserve Act
June 25, 1998
Circular No. 11064

Proposals on Exemption of Certain Transactions Between
an Insured Depository Institution and its Affiliates

To All Bank Holding Companies, and Section 20 Subsidiaries
of Bank Holding Companies, in the Second Federal Reserve District:

The following is from a statement by the Board of Governors of the Federal Reserve System:

The Federal Reserve Board has requested public comment on an interpretation and two proposed rules exempting certain transactions between an insured depository institution and its affiliates under section 23A of the Federal Reserve Act.

Comment is requested by July 21, 1998.

The proposed interpretation would expand the ability of an insured depository institution to purchase securities from its section 20 affiliate outside the quantitative limits of section 23A if the assets are actively traded at a price that can be verified from independent and reliable resources.

The proposed rules would exempt from the quantitative and collateral requirements of section 23A certain loans made by an insured depository institution to customers who use the proceeds to purchase securities through or from the institution's registered broker-dealer affiliate.

The Board's notices in this matter, as published in the Federal Register of June 16 is available as a file (pdf - 28kb). Comments should be submitted to the Board, as specified in the notices, by July 21, 1998.