Statement Of Purpose For An Extension Of Credit Secured By Margin Stock {FR U-1}

FR U-1 - STATEMENT OF PURPOSE FOR AN EXTENSION OF CREDIT SECURED BY MARGIN STOCK. This form is required by law (15 U.S.C. §§ 78g and 78w; 12 C.F.R. § 221). The term “margin stock” is defined in Regulation U (12 C.F.R. § 221) and includes, principally: (1) stocks that are registered on a national securities exchange or any over-the-counter security designated for trading in the National Market System; (2) debt securities (bonds) that are convertible into margin stock; and (3) shares of most mutual funds. The Federal Reserve may not conduct or sponsor, and an organization (or a person) is not required to respond to, a collection of information unless it displays a currently valid OMB control number. This form is used by banks to document loans over $100,000 that are secured by margin stock, such as registered stocks, convertible debt securities, or mutual funds. The borrower completes Part I to declare the loan's purpose, while the bank fills out Part II if the loan is used to purchase or carry margin stock, detailing the securities and collateral involved. Both the borrower and a bank officer must sign the form, and it must be kept for three years after the loan is paid off to ensure compliance with Federal Reserve Regulation U. www.FormsWorkflow.com