12 CFR 221.109
§ 221.109 Loan to open-end investment company.
United States · 12 CFR — Banks and Banking · Status: effective
Cite this
- Citation
- 12 CFR 221.109, § 221.109 Loan to open-end investment company, United States, version 1 as recorded 2026-07-09, yourstate.us, https://yourstate.us/provision/44536
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Full text
In response to a question regarding a possible loan by a bank to an open-end investment company that customarily purchases stocks registered on a national securities exchange, the Board stated that in view of the general nature and operations of such a company, any loan by a bank to such a company should be presumed to be subject to this part as a loan for the purpose of purchasing or carrying margin stock. This would not be altered by the fact that the open-end company had used, or proposed to use, its own funds or proceeds of the loan to redeem some of its own shares, since mere application of the proceeds of a loan to some other use cannot prevent the ultimate purpose of a loan from being to purchase or carry registered stocks.
Legislative history
This is a federal regulation, adopted through agency rulemaking under the Administrative Procedure Act — not enacted by a recorded vote of Congress.