(a)
Authority and purpose. Regulation X (this part
*) is issued by
the Board of Governors of the Federal Reserve System (the Board) under
the Securities Exchange Act of 1934, as amended (the act) (15 USC
78a et seq.). This part implements section 7(f) of the act (15 USC
78g(f)), the purpose of which is to require that credit obtained within
or outside the United States complies with the limitations of the
Board’s Margin Regulations T and U (12 CFR 220 and 221, respectively).
5-971
(b) Scope and exemptions. The act and this part apply the Board’s margin regulations to United
States persons and foreign persons controlled by or acting on behalf
of or in conjunction with United States persons (hereinafter borrowers),
who obtain credit outside the United States to purchase or carry United
States securities, or within the United States to purchase or carry
any securities (both types of credit are hereinafter referred to as
purpose credit). The following borrowers are exempt from the act and
this part:
(1) any borrower who obtains
purpose credit within the United States, unless the borrower willfully
causes the credit to be extended in contravention of Regulation T
or U;
(2) any borrower
whose permanent residence is outside the United States and who does
not obtain or have outstanding, during any calendar year, a total
of more than $100,000 in purpose credit obtained outside the United
States; and
(3) any
borrower who is exempt by order upon terms and conditions set by the
Board.
