NASD Notice to Members 98-043 - June 1998

Federal Reserve System Amends Regulations T, U and X

Executive Summary

Effective April 1, 1998, the Board of Governors (Board) of the Federal Reserve System (FED) adopted several amendments to Regulation (Reg) T, as well as Regs U and X. In addition, it is eliminating Reg G, which had applied to credit extended by “other lenders” (i.e., other than banks and broker/dealers). These changes were made to reflect changes to the FED’s statutory authority under the Securities Exchange Act of 1934, as amended by the National Securities Markets Improvement Act of 1996 (NSMIA). The FED retains the authority to adopt rules and regulations regarding the extension of credit where securities (other than exempt securities) are used as collateral.