12 C.F.R. § 224.3

Margin regulations to be applied by nonexempted borrowers

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(a) Credit transactions outside the United States. No borrower shall obtain purpose credit from outside the United States unless it conforms to the following margin regulations:

(1) Regulation T (12 CFR part 220) if the credit is obtained from a foreign branch of a broker-dealer;

(2) Regulation U (12 CFR part 221), as it applies to banks, if the credit is obtained from a foreign branch of a bank, except for the requirement of a purpose statement (12 CFR 221.3(c)(1)(i) and (c)(2)(i)); and

(3) Regulation U (12 CFR part 221), as it applies to nonbank lenders, if the credit is obtained from any other lender outside the United States, except for the requirement of a purpose statement (12 CFR 221.3(c)(1)(ii) and (c)(2)(ii)).

(b) Credit transactions within the United States. Any borrower who willfully causes credit to be extended in contravention of Regulations T and U (12 CFR parts 220 and 221), and who, therefore, is not exempted by § 224.1(b)(1), must conform the credit to the margin regulation that applies to the lender.

[Reg. X, 63 FR 2839, Jan. 16, 1998]

Notes of Decisions

Cited in 3 cases (1 in the last 5 years), 1985–2025 · leading case: Revlon, Inc. v. Pantry Pride, Inc., 621 F. Supp. 804 (D. Del. 1985).

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Revlon, Inc. v. Pantry Pride, Inc., 621 F. Supp. 804 (D. Del. 1985). “12 CFR § 224.3 (b). In order to find that the Pantry Pride Group violated Regulation X, the Court must find that credit was extended in violation of Regulations G or U.”

Shearson Lehman Bros. v. M & L Investments, 776 F. Supp. 1489 (D. Utah 1991). “” 12 C.F.R. § 224.3 (b) (1991). 18 In other words, if a client willfully causes a brokerage to extend credit, the client is equally responsible for compliance with the regulations governing the brokerage.”

GWA, LLC, George A. Weiss, Tax Matters Partner (Tax Ct. 2025). “See 12 C.F.R. § 224.3 (1998). Under these rules cus- tomers investing in U.”

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