[Code of Federal Regulations]
[Title 12, Volume 3]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR250.401]

[Page 686]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 250--MISCELLANEOUS INTERPRETATIONS--Table of Contents
 
Sec. 250.401  Director serving member bank and closed-end investment company being organized.

    (a) The Board has previously expressed the opinion (Sec. 218.101) 
that section 32 of the Banking Act of 1933 (12 U.S.C. 78) is applicable 
to a director of a member bank serving as a director of an open-end 
investment company, because the more or less continued process of 
redemption of the stock issued by such company makes the issuance and 
sale of its stock essential to the maintenance of the company's size and 
to the continuance of operations, with the result that the issuance and 
sale of its stock constitutes one of the primary activities of such a 
company. The Board also stated that if the company had ceased to issue 
or offer any of its stock for sale, the company would not be engaged in 
the issuance or distribution of its stock and therefore the prohibitions 
of section 32 would not be applicable. Subsequently, the Board expressed 
the opinion that section 32 would not be applicable in the case of a 
closed-end investment company.
    (b) The Board has recently stated that it believed that a closed-end 
company which was in process of organization and was actively engaged in 
issuing and selling its shares was in the same position relative to 
section 32 as an open-end company, and that the section would be 
applicable while this activity continued.

[25 FR 3464, Apr. 21, 1960. Redesignated at 61 FR 57289, Nov. 6, 1996]