[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: 12CFR250.408]

[Page 690]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 250--MISCELLANEOUS INTERPRETATIONS--Table of Contents
 
Sec. 250.408  Short-term negotiable notes of banks not securities under section 32, Banking Act of 1933.

    (a) The Board of Governors has been asked whether short-term 
unsecured negotiable notes of the kinds issued by some of the large 
banks in this country as a means of obtaining funds are ``other similar 
securities'' within the meaning of section 32, Banking Act of 1933 (12 
U.S.C. 78) and this part.
    (b) Section 32 forbids certain interlocking relationships between 
banks which are members of the Federal Reserve System and individuals or 
organizations ``primarily engaged in the issue, flotation, underwriting, 
public sale, or distribution, at wholesale or retail, or through 
syndicate participation, of stocks, bonds, or other similar securities * 
* *.'' Therefore, if such notes are securities similar to stocks or 
bonds, any dealing therein would be an activity covered in section 32 
and would have to be taken into consideration in determining whether the 
individual or organization involved was ``primarily engaged'' in such 
activities.
    (c) The Board has concluded that such short-term notes of the kind 
described above are not ``other similar securities'' within the meaning 
of section 32 and this part.

[29 FR 16065, Dec. 2, 1964. Redesignated at 61 FR 57289, Nov. 6, 1996]