collected funds is not received shall be charged back to the forwarding bank, regardless of whether or not the check itself can be returned. In such event, neither the owner or holder of any such check, nor the bank which sent such check to the Federal Reserve bank for collection shall have any right of recourse upon, interest in, or right of payment from, any reserve balance, clearing account, deposit account, or other funds of the drawee bank or of any bank to which such checks have been sent for collection, in the possession of the Federal Reserve bank. No draft, authorization to charge, or other order, upon any reserve balance, clearing account, deposit account, or other funds of a paying, remitting, or collecting bank in the possession of a Federal Reserve bank, issued for the purpose of settling items handled under the terms of this part will be paid, acted upon, or honored after receipt by such Federal Reserve bank of notice of suspension or closing of such paying, remitting, or collecting bank.*† § 210.6 Other rules and regulations. Each Federal Reserve bank may also promulgate rules not inconsistent with the terms of the law or of this part, governing the sorting, listing, packaging, and transmission of items, and other details of its check clearing and collection operations. Such rules and regulations shall be set forth by the Federal Reserve banks in their letters of instruction to their member and nonmember clearing banks and shall be binding upon any member or nonmember clearing bank which sends any check to such Federal Reserve bank for collection or to any other Federal Reserve bank for the account of such Federal Reserve bank for collection.*† PART 212-INTERLOCKING BANK DIRECTORATES UNDER THE CLAYTON ACT § 212.3 Relationships permitted by Board. NOTE: Paragraphs (a) and (e) of this section were amended by substituting the date "February 1, 1940" for the date "August 1, 1939," by Res., Aug. 1, 1939; 4 F.R. 3522. (b) Executive officer. The term "executive officer" means every officer of a member bank who participates or has authority to participate in the operating management of the bank or any branch thereof otherwise than in the capacity of a director of the bank, regardless of whether he has an official title or whether his title contains a designation of assistant and regardless of whether he is serving without salary other compensation. It will be or assumed that the chairman of the board, the president, every vice president, the cashier, secretary, treasurer and trust officer of a member bank are executive officers, unless it is provided by resolution of the board of directors or the bank's by-laws that any such officer is not authorized to participate in the operating management of the bank and he does not actually participate therein. [As amended by Res., June 23, 1939, effective July 1, 1939; 4 F.R. 2513] (c) Special cash account. (1) In a special cash account, a creditor may effect for or with any customer bona fide cash transactions in securities in which the creditor may (i) purchase any security for, or sell any security to, any customer, Provided, Funds sufficient for the purpose are already held in the account or the purchase or sale is in reliance upon an agreement accepted by the creditor in good faith that the customer will promptly make full cash payment for the security and that the customer does not contemplate selling the security prior | whatever, without having been previously to making such payment; or (ii) sell any security for, or purchase any security from, any customer, Provided, The security is held in the account or the creditor is informed that the customer or his principal owns the security and the purchase or sale is in reliance upon an agreement accepted by the creditor in good faith that the security is to be promptly deposited in the account. (2) In case a customer purchases a security (other than an exempted security) in the special cash account and does not make full cash payment for the security within 7 days after the date on which the security is so purchased, the creditor shall, except as provided in the succeeding subparagraphs (3)–(7) of this paragraph, promptly cancel or otherwise liquidate the transaction or the unsettled portion thereof. (3) If the security when so purchased is an unissued security, the period applicable to the transaction under subparagraph (2) of this paragraph shall be 7 days after the date on which the security is made available by the issuer for delivery to purchasers. (4) If any shipment of securities is incidental to the consummation of the transaction, the period applicable to the transaction under subparagraph (2) of this paragraph shall be deemed to be extended by the number of days required for all such shipments, but not by more than 7 days. (5) If the creditor, acting in good faith in accordance with subparagraph (1) of this paragraph, purchases a secu rity for a customer, or sells a security to a customer, with the understanding that he is to deliver the security promptly to the customer, and the full cash payment to be made promptly by the customer is to be made against such delivery, the paid for in full by the customer, the security has been sold in the account or delivered out to any broker or dealer: Provided, That an appropriate committee of a national securities exchange, on application of the creditor, may authorize the creditor to disregard for the purposes of the preceding proviso any given instance of the type therein described if the committee is satisfied that both creditor and customer are acting in good faith and that circumstances warrant such authorization. (6) If an appropriate committee of a national securities exchange is satisfied that the creditor is acting in good faith in making the application, that the application relates to a bona fide cash transaction, and that exceptional circumstances warrant such action, such committee, on application of the creditor, may (i) extend any period specified in subparagraphs (2), (3), (4) or (5) of this paragraph for one or more limited periods commensurate with the circumstances, or (ii), in case a security purchased by the customer in the special cash account is a registered or exthe transaction to a general account or empted security, authorize transfer of special omnibus account and completion of the transaction pursuant to the provisions of this part relating to such an account. (7) The days specified in this paragraph are calendar days, but if the last day of any period specified herein is a period shall be considered to end on the Saturday, Sunday, or holiday, such next full business day. For the purposes of this paragraph, a creditor may, at his option, disregard any sum due by the customer not exceeding $50. [As amended by Amdt. 2, May 9, 1939, effective May 22, 1939; 4 F.R. 20281 (f) Special miscellaneous accellaneou count. * creditor may at his option treat the transaction as one to which the period applicable under subparagraph (2) of this paragraph is not the 7 days therein specified but 35 days after the date of (2) Make loans, and may maintain such purchase or sale: Provided, how-loans, to or for any partner of a firm ever, That the creditor shall not so treat any purchase by a given customer if any security has been purchased by such customer at any time during the preceding 90 days in a special cash account with the creditor, and then, for any reason which is a member of a national securities exchange to enable such partner to make a contribution of capital to such firm, Provided, (i) The lender as well as the borrower is a partner in such firm, or (ii) The lender as well as the bor rower is a member of such exchange, the loan has the approval of an appropriate committee of the exchange, and the committee, in addition to being satisfied that the loan is not in contravention of any rule of the exchange, is satisfied that the loan is outside the provided the creditor acting in good faith purchases or sells the security for delivery, against full payment of the purchase price, as promptly as practicable in accordance with the ordinary usage of the trade. [As added by Amdt. 4 F.R. 2028] ordinary course of the lender's business, 2, May 9, 1939, effective May 22, 1939; and that, if the borrower's firm does any dealing in securities for its own account, the loan is not for the purpose of enabling the firm to increase the amount of such dealing; NOTE: Paragraph (c) of this section was amended as set forth above, and paragraph (f) was amended by the addition of subparagraphs (2) and (3) and the redesignation of former subparagraphs (2)-(6) as subMay 9, 1939, effective May 22, 1939; 4 F.R. paragraphs (4)-(8), respectively, by Amdt. 2, (3) Purchase any security from any customer who is a broker or dealer, or sell any security to any such customer, | 2028. PART CHAPTER III-FEDERAL DEPOSIT INSURANCE CORPORATION 305-RECOGNITION OF DE-ers thereof will be recognized as agent POSIT OWNERSHIP NOT ON BANK for such owners for the purpose of makRECORDS Sec. ing an assignment of the rights of such owners against the closed insured bank to the Federal Deposit Insurance Cor 305.1 Deposits evidenced by negotiable in-poration and for the purpose of receiv struments. 305.2 Deposit obligations for payment of items forwarded for collection by bank acting as agent. 305.3 Deposits of public officers. ing payment on behalf of such owners. (Sec. 101 (m) (3), 49 Stat. 697; 12 U.S.C., Sup., 264 (m) (3)) [As amended by Res., May 3, 1939; 4 F.R. 1982] § 305.3 Deposits of public officers. The owner of any portion of a deposit bank under the name of a public official, state, county, city, or other political subdivision will be recognized for all purposes of claim for insured deposits to the same extent as if his name and interest were disclosed on the records of the bank: Provided, That the interest of such owner in the deposit is disclosed on the records maintained by such public official, state, county, city or other political subdivision, And, provided further, That such records have been maintained § 305.1 Deposits evidenced by negotiable instruments. If any insured de-appearing on the records of a closed posit obligation of a bank be evidenced by a negotiable certificate of deposit, negotiable draft, negotiable cashier's or officer's check, negotiable certified check or negotiable traveler's check or letter of credit, the owner of such deposit obligation will be recognized for all purposes of claim for insured deposits to the same extent as if his name and interest were disclosed on the records of the bank, Provided, The instrument was in fact negotiated to such owner prior to the date of the closing of the bank. Af-in good faith and in the regular course firmative proof of such negotiation must be offered in all cases to substantiate the claim. (Sec. 101 (m) (3), 49 Stat. 697; 12 U.S.C., Sup., 264 (m) (3)) [As amended by Res., May 3, 1939; 4 F.R. 1982] of business. (Sec. 101 (m) (3), 49 Stat. § 305.4 Deposits of approved Federal Housing Administration mortgagee. The § 305.2 Deposit obligations for pay-owner of any portion of a deposit reprement of items forwarded for collection senting payments made under mortgages by bank acting as agent. Where a closed insured by the Federal Housing Adminbank has become obligated for the pay-istrator and appearing on the records of ment of items forwarded for collection a closed bank under the name of an by a bank acting solely as agent the owner of such items will be recognized for all purposes of claim for insured deposits to the same extent as if his name and interest were disclosed on the records of the bank when such claims for insured deposits, if otherwise payable, have been established by the execution and delivery of prescribed forms. Such bank forwarding such items for the own approved Federal Housing Administration mortgagee or its agent will be recognized for all purposes of claim for insured deposits to the same extent as if his name and interest were disclosed on the records of the bank: Provided, That the interest of such owner in the deposit is disclosed on the records maintained by such mortgagee or its agent, And, provided further, That such records have been maintained in good faith and in the regular course of business. (Sec. 101 (m) (3), 49 Stat. 697; 12 U.S.C., Sup., 264 (m) (3)) [Res., June 20, 1939, as amended Dec. 13, 1939; 4 F.R. 4916] PART 307-INSURANCE OF TRUST FUNDS § 307.1 Claim by fiduciary insured bank for insured deposits of trust estates. In the event of the closing of an insured bank for inability to meet the demands of its depositors, the claim for insured deposits made by a fiduciary insured bank which, in the exercise of its trust powers, had deposited trust funds therein will be determined as follows: (a) Allocated funds of a trust estate. If trust funds of a particular trust estate are allocated by the fiduciary and deposited, the deposit with respect to such estate will be determined by ascertaining the amount of its funds allocated, depos ited and remaining to the credit of the claimant as fiduciary in the closed insured bank. (b) Interest of a trust estate in unallocated trust funds. If trust funds of a particular trust estate be mingled with trust funds of other trust estates and deposited by the fiduciary bank in one or more banks to the credit of the depositing bank as fiduciary, without allocation of specific amounts from the particular trust estate to an account in such bank or banks, the deposit with re 1 This section is not to be construed as an express or implied approval of such commingling of trust funds as may be involved in the maintaining of general trust accounts. spect to such estate in any closed insured bank will be the amount which will bear the same ratio to all unallocated funds of the estate for which the fiduciary is accountable as the entire unallocated trust funds to the credit of the fiduciary bank in the closed insured bank will bear to the entire amount of such funds so deposited by the fiduciary in all depositories.2 (c) Claims for funds of corporate trusts determined on basis of allocation. The rule stated in paragraph (b) hereof will not be applied to funds of an insured bank held as fiduciary under a type of trust created to facilitate the issuance, distribution, or servicing of corporate bonds, debentures or stock issues, commonly known as corporate trusts. The claim of the fiduciary bank with respect to deposits of such funds will be determined according to allocations of the funds of particular estates to particular deposit accounts. (d) Insured deposit of a trust estate. In arriving at the total insured deposit of an insured fiduciary bank with respect to any trust estate, the deposit of such estate as determined in accordance with any paragraph hereof shall be combined with that determined under any other paragraph and the insured deposit shall be the total less any amount thereof in excess of $5,000. (Sec. 101 (c) (13), (h) (9), (m) (3), 49 Stat. 686, 690, 697; 12 U.S.C., Sup., 264 (c) (13), (h) (9), (m) (3)) [Res., July 8, 1939; 4 F.R. 29451 "In determining claims under this paragraph, unallocated trust funds in the insured fiduciary bank will be included in the totals of such funds. |