Roger D. Blanc, Esq.
Willkie Farr & Gallagher
One Citcorp Center
153 East 53rd Street
New York, NY 10022-4669

Dear Mr. Blanc:

This responds to your letter of May 29, 1996, concerning the recent amendments to Regulation T that will take effect on July 1, 1996. Your question concerns a new provision, section 220.16(b) of Regulation T, which covers the lending of foreign securities to a foreign person.

The amendments to Regulation T were published in the Federal Register on May 6, 1996 (61 FR 20386-20404). In describing the addition of section 220.16(b), the Board stated on page 20388 that "coverage of the term 'foreign lender' is determined by the status of the beneficial owner of an account and includes a non-U.S. person with a U.S. investment adviser or other fiduciary." You seek confirmation that a foreign borrower who has engaged a U.S. investment adviser or other fiduciary would be deemed to be a foreign person for purposes of section 16(b) of Regulation T.

The term "foreign lender" does not appear in section 220.16(b), although the term "foreign person" does. The reference to "foreign lender" in the Federal Register notice preamble is an error and should have been a reference to the term "foreign person." In the context of section 220.16(b), the term "foreign person" clearly refers to the borrower of the security. Board staff therefore confirms that a non-U.S. person with a U.S. investment adviser or other fiduciary is a foreign person for purposes of section 220.16(b) of Regulation T, effective July 1, 1996.

Yours truly,

(signed) Scott Holz

Scott Holz