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Board of Governors of the Federal Reserve System
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Federal Reserve Board of Governors

Regulations

Compliance Guide to Small Entities

Regulation X: Borrowers of Securities Credit
12 CFR 224

This description should not be interpreted as a comprehensive statement of the regulation. Rather, it is intended to give a broad overview of the regulation's requirements. The full regulation is available on the Government Printing Office web site.

Regulation X extends to borrowers the provisions of regulations governing the extension of credit by brokers and dealers (Regulation T) and by banks and other lenders (Regulation U) for the purpose of purchasing or carrying securities.

A borrower who obtains credit within the United States to purchase or carry securities issued by any company is subject to Regulation X only in the event that the borrower willfully causes the credit to be extended in contravention of Regulation T or U. Generally, a borrower who obtains credit outside the United States to purchase or carry securities issued by a company incorporated in the United States is subject to Regulation X if the borrower is a "U.S. person" (a company incorporated in the United States, a U.S. citizen, or a U.S. resident) or a non-U.S. person controlled by or acting on behalf of or in conjunction with a U.S. person.

Borrowers subject to Regulation X have the burden of ensuring that the credit they obtain conforms to Regulation T or U.

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Last update: August 2, 2013