Final rule--amendment to Regulation D. (Legal Developments).The Board of Governors is amending 12 C.F.R. Part 204, its Regulation D (Reserve Requirements Reserve Requirements Requirements regarding the amount of funds that banks must hold in reserve against deposits made by their customers. This money must be in the bank's vaults or at the closest Federal Reserve Bank. of Depository Institutions Depository institution A financial institution that obtains its funds mainly through deposits from the public. This includes commercial banks, savings and loan associations, savings banks and credit unions. ), to reflect the annual indexing of the low reserve tranche Tranche One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics. tranche A class of bonds. and the reserve requirement exemption for 2003, and announces the annual indexing of the deposit reporting cutoff level that will be effective beginning in September September: see month. 2003. The amendments increase the amount of transaction accounts subject to a reserve requirements ratio of three percent in 2003, as required by section 19(b)(2)(C) of the Federal Reserve Act, from $41.3 million to $42.1 million of net transaction accounts. This adjustment is known as the low reserve tranche adjustment. The Board is increasing from $5.7 million to $6.0 million the amount of reservable liabilities of each depository institution that is subject to a reserve requirements of zero percent in 2003. This action is required by section 19(b)(11)(B) of the Federal Reserve Act, and the adjustment is known as the reservable liabilities exemption adjustment. The Board is also increasing the deposit cutoff level that is used in conjunction with the reservable liabilities exemption to determine the frequency of deposit reporting from $106.9 million to $112.3 million for nonexempt adj. 1. Not exempt; subject to (some specified) rule. Opposite of exempt nt>. 2. (U. S. Labor Law) Not exempt from the provisions of the fair labor practises act; - a term applied mostly to persons who are hourly employees, who are required by law to be depository institutions. (Nonexempt institutions are those with total reservable liabilities exceeding the amount exempted from reserve requirements.) Thus, beginning in September 2003, nonexempt institutions with total deposits of $112.3 million or more will be required to report weekly while nonexempt institutions with total deposits less than $112.3 million may report quarterly, in both cases on form FR 2900. Exempt institutions with at least $6.0 million in total deposits may report annually on form FR 2910a. For depository institutions that report weekly, the low reserve tranche adjustment and the reservable liabilities exemption adjustment will apply to the 14-day reserve computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. period that begins Tuesday, November 26, 2002, and the corresponding 14-day reserve maintenance period that begins Thursday, December 25, 2002. For institutions that report quarterly, the low reserve tranche adjustment and the reservable liabilities exemption adjustment will apply to the 7-day reserve computation period that begins Tuesday, December 17, 2002, and the corresponding 7-day reserve maintenance period that begins Thursday, January 16, 2003. For all depository institutions, the deposit cutoff level will be used to screen institutions in July of 2003 to determine the reporting frequency for the 12-month period that begins in September 2003. Effective November 7, 2002, 12 C.F.R. Part 204 is amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. as follows: Part 204--Reserve Requirements of Depository Institutions (Regulation D) The authority citation Citation (foaled 1945) U.S. Thoroughbred racehorse. In four seasons he won 32 of 45 races, finished second in ten, and third in two. He won the 1948 Triple Crown, and became the first horse to win $1 million. He set a world record in 1950 by running a mile in 1:33 3/5. for Part 204 continues to read as follows: 1. Authority: 12 U.S.C. 248(a), 248(c), 371a, 461, 601, 611, and 3105. 2. Section 204.9 is revised to read as follows: Section 204.9--Reserve requirement ratios. The following reserve ratios are prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). for all depository institutions, Edge and Agreement corporations, and United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. branches and agencies of foreign banks:
Category Reserve requirement
Net transaction accounts:
$0 to $6.0 million 0 percent of amount.
Over $6.0 million and up to 3 percent of amount.
$42.1 million
Over $42.1 million $1,083,000 plus 10 percent of
amount over $42.1 million.
Nonpersonal time deposits 0 percent.
Eurocurrency liabilities 0 percent.
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