Circular
Acquisition of Stock by State Member Banks to Hedge Equity Derivative Transactions
February 26, 2002
Circular No. 11423

To All Depository Institutions and Others Concerned in the Second Federal Reserve District:

In a press release (pdf - 11kb), the Federal Reserve Board announced that it would not apply section 9 of the Federal Reserve Act to prohibit a state member bank from acquiring equity securities to hedge the bank's customer-driven equity derivative transactions if such purchases are made in accordance with the conditions and restrictions applicable to national banks.

The Board's statement (pdf - 16kb) on this matter is attached.

Questions on this matter may be directed, at this Bank to Stefan Walter, Vice President, Bank Supervision Group.