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Banks may extend and maintain purpose credit without complying with Regulation U if the credit is extended:

To a bank auditor
To a qualified employee stock ownership plan running previously but not now
To any customer, other than a broker or dealer, to temporarily finance the purchase or sale of securities for prompt delivery, if the credit is to be repaid in the ordinary course of business on the completion of the transaction
To enable a customer to meet emergency expenses not reasonably foreseen and if the bank obtains a good faith statement from the customer. Emergency expenses are ones related to unforeseen death or disability, not a chance to make a profit.

Answer(s): C,D

Banks may extend and maintain purpose credit without complying with Regulation U if the credit is extended:

To a bank auditor
To a qualified employee stock ownership plan running previously but not now
To any customer, other than a broker or dealer, to temporarily finance the purchase or sale of securities for prompt delivery, if the credit is to be repaid in the ordinary course of business on the completion of the transaction
To enable a customer to meet emergency expenses not reasonably foreseen and if the bank obtains a good faith statement from the customer. Emergency expenses are ones related to unforeseen death or disability, not a chance to make a profit.

Answer(s): C,D

Banks may extend and maintain purpose credit without complying with Regulation U if the credit is extended:

To a bank auditor
To a qualified employee stock ownership plan running previously but not now
To any customer, other than a broker or dealer, to temporarily finance the purchase or sale of securities for prompt delivery, if the credit is to be repaid in the ordinary course of business on the completion of the transaction
To enable a customer to meet emergency expenses not reasonably foreseen and if the bank obtains a good faith statement from the customer. Emergency expenses are ones related to unforeseen death or disability, not a chance to make a profit.

Answer(s): C,D

Margin stock includes:

Equity securities registered or having delisted trading privileges on a national securities exchange:
Over-the-counter (OTC) securities that do not qualify for trading in the National Market System
Warrants or rights to subscribe to or purchase a common stock
Securities issued by a investment company registered under the Investment Company Act, except for:
A company licensed under the Small Business Investment Company Act A company that has at least 95 percent of its assets continuously invested in exempted securities; or
A company that issues face-amount certificates; or A company that is considered a money market fund under the SEC Rules

Answer(s): D

Margin stock includes:

Equity securities registered or having delisted trading privileges on a national securities exchange:
Over-the-counter (OTC) securities that do not qualify for trading in the National Market System
Warrants or rights to subscribe to or purchase a common stock
Securities issued by a investment company registered under the Investment Company Act, except for:
A company licensed under the Small Business Investment Company Act A company that has at least 95 percent of its assets continuously invested in exempted securities; or
A company that issues face-amount certificates; or A company that is considered a money market fund under the SEC Rules

Answer(s): D

Banking CRCM Exam Questions
CERTIFIED REGULATORY COMPLIANCE MANAGER (CRCM) (Page 30 )