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73d C ONGRESS . SESS. II. CH. 404. JUNE 6, 1934 . similar to those imposed upon members, brokers, or dealers by sub- section (c) of this section and the rules and regulations thereunder . fat Loans of which egn; This subsection and the rules and regulations thereunder shall not apply (A) to a loan made by a person not in the ordinary course of his business, (B) to a loan on an exempted security, (C) to a loan to a dealer to aid in the financing of the distribution of securities to customers not through the medium of a national securities exchange, (D) to a loan by a bank on a security other than an equity security, or (E) to such other loans as the Federal Reserve Board shall, by such rules and regulations as it may deem necessary or appropriate in the public interest or for the protection of investors, exempt, either unconditionally or upon specified terms and condi- tions or for stated periods, from the operation of this subsection and the rules and regulations thereunder . When section and
(e) The provisions of this section or the rules and regulations shall apply. thereunder thereunder shall not apply on or before July 1, 1937, to any loan or extension of credit made prior to the enactment of this title or to the maintenance, renewal, or extension of any such loan or credit, except to the extent that the Federal Reserve Board may by rules and regulations prescribe as necessary to prevent the circumvention of the provisions of this section or the rules and regulations there- un der by m eans of with draw als of f unds or secu riti es, subs titu tion s of securities, or additional purchases or by any other device . Restriction on bor- RESTRICT IONS ON BORROWIN G BY MEMBERS, BROKERS, AND DEALERS rowing by members,
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7 brok ers, and deale rs . SEC . 8 . It shall be unlawful for any member of a national securi- ties exchange, or any broker or dealer who transacts a business in securities through the medium of any such member, dire ctly or in dir ect ly- Loans through Fed- (a) To borrow in the ordinary course of business as a broker or oral Reserve banks . de aler on any secu rity (ot her than an exem pted sec urit y) r egis tere d on a nati onal securitie s exchange ex cept (1) from or through a Nonmember banks; member bank of the Federal Reserve System, (2) from any non- agreement required. member ba nk which shall have filed w ith the Feder al Reserve Boa rd an agreement, which is still in force and which is in the form pre .. scribed by the Board, undertaking to comply with all provisions of Ante, p. i62. this Act, the Federal Reserve Act, as amended, and the Banking Act of 1 933, w hich a re ap plicab le to member bank s and which rel ate to the use of credit to finance transactions in securities, and with such rules and regulations as may be prescribed pursuant to such provisions of law or for the purpose of preventing evasions thereof, tions of Loans Board . regula- or (3) in accordance with such rules and regulations as the Federal Reser ve Boa rd may pres cribe to per mit lo ans b etween such mem- bers and/or brokers and/or dealers, or to permit loans to meet Nature of agreement . emergency needs . Any such agreement filed with the Feder al Reserve Board shall be subject to termination at any time by order of the Board, after appropriate notice and opportunity for hearing, because of any failure by such bank to comply with the provisions thereof or with such provisions of law or rules or regulations ; and, for any willful violation of such agreement, such bank shall be subject to the penalties provided for violations of rules and regu- Post, pp. 899, 9m . lations prescribed under this title . The provisions of sections 21 and 25 of this title shall apply in the case of any such proceeding or order of the Federal Reserve Board in the same manner as such provisions apply in the case of proceedings and orders of the Comm issi on . Limitation on aggre-
(b) To permit in the ordinary course of business as a broker his gate indebtedness of b roker .
aggregate inde btedness to a ll other perso ns, including
