(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 U.S.C. 78a et seq.). This part implements section 7(f) of the Act (15 U.S.C. 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 parts 220 and 221, respectively).
(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 Regulations 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.
[Reg. X, 48 FR 56572, Dec. 22, 1983, as amended by Reg. X, 63 FR 2839, Jan. 16, 1998]
Notes of Decisions
Cited in
17
cases, 1974–2014 · leading case:
Costello v. Grundon, 651 F.3d 614 (7th Cir. 2010).
Costello v. Grundon, 651 F.3d 614 (7th Cir. 2010).
· cites it 2× “” 12 C.F.R. § 224.1 (b)(1). Moreover, Section 29(c) of the Securities Exchange Act implies a right to assert a violation of the Act or Regulation G or U defensively under Section 29(b).”
Drasner v. Thomson McKinnon Sec., Inc., 433 F. Supp. 485 (S.D.N.Y. 1977).
· cites it 2× “It is quite clear that the Board was able to state “we incorporate the exchange rules” in the sense such a drafting technique had been employed in Regulation X in 1971, 12 C.F.R. § 224.1 et seq.: “Credit obtained from a broker/dealer shall conform to .”
United States v. Gaf Corp., Gaf Chemicals Corp., Jay & Co., Inc., James T. Sherwin, Gaf Corp., James T. Sherwin, 928 F.2d 1253 (2d Cir. 1991).
“…charging the defendants with receiving unlawful margin loans in violation of 15 U.S.C. §§ 78g(f)(l), 78ff, 12 C.F.R. §§ 224.1 etseq., and 18 U.S.C. § 2 , was dismissed on the government’s motion. At the close of the government’s case at the second trial, Count Five…”
Costello v. Grundon, 651 F.3d 614 (7th Cir. 2011).
· cites it 2× “" 12 C.F.R. § 224.1 (b)(1). Moreover, Section 29(c) of the Securities Exchange Act implies a right to assert a violation of the Act or Regulation G or U defensively under Section 29(b).”
Gecker v. Flynn (In re Emerald Casino, Inc.), 530 B.R. 44 (N.D. Ill. 2014).
“3d at 641 ; see 12 C.F.R. § 224.1 (b)(1) (exempting a borrower from certain requirements “unless the borrower willfully causes the credit to be extended in contravention” of federal regulations).”
Sec. & Exch. Comm'n v. Packer, Wilbur & Co., Inc., 498 F.2d 978 (2d Cir. 1974).
· cites it 2× “He violates Regulation X, 12 C.F.R. 224.1, and Rule 10b-5 by making this misrepresentation 8 Of course, if we had the benefit of a current pronouncement by the SEC of its view on 220.”
Palmer v. Thomson & McKinnon Auchincloss, Inc., 427 F. Supp. 915 (D. Conn. 1977).
“12 C.F.R. § 224.1 . Section 224.6(a) of Regulation X makes clear: “An innocent mistake made in good faith by a borrower in connection with the obtaining of credit shall not be deemed to be a violation of this part .”
Sec. & Exch. Comm'n v. Hansen, 726 F. Supp. 74 (S.D.N.Y. 1989).
· cites it 2× “He violates Regulation X, 12 C.F.R. § 224.1 , and Rule 10b-5 by making this misrepresentation.”
Berliner Handels-Und Frankfurter Bank v. Vincent Coppola, 172 A.D.2d 369 (N.Y. App. Div. 1991).
“Regulation X (12 CFR part 224), which incorporates the provisions of Regulation U, makes it unlawful for a borrower to willfully obtain credit that violates section 7 of the Securities Exchange Act of 1934 or the rules and regulations thereunder (12 CFR 224.1). In Thomson…”
Capital Mgmt. Select Fund Ltd. v. Bennett, 670 F.3d 194 (2d Cir. 2012).
“(similar margin restrictions applicable to banks and other lenders); Federal Reserve Board Regulation X, 12 C.F.R. § 224.1 et seq., (similar margin restrictions applicable to margin loans not explicitly covered by other regulations).”
Capital Mgmt. Select Fund Ltd. v. Bennett, 680 F.3d 214 (2d Cir. 2012).
“(similar margin restrictions applicable to banks and other lenders); Federal Reserve Board Regulation X, 12 C.F.R. § 224.1 et seq., (similar margin restrictions applicable to margin loans not explicitly covered by other regulations).”
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