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Cite this Code CFR

thus: 12 CFR 1.1

Page vi

Note: Other regulations issued by the Department of the Treasury appear in Title 19,
Chapter 1, Title 21, Chapter II, Title 26, Chapter 1, Title 27, Chapter I, Title 31, Title 33,
Chapter 1, Title 46, Chapter I.

SUPPLEMENTAL PUBLICATIONS: Digest of decisions relating to national banks, Comptroller of

the Currency. Irregular. Vol. 14, 1864-1912. Vol. 2, 1913-1926. Vol. 3—, 1927-
1931. Vol. 4, 1932-1934. Vol. 5-, 1933–1936. Federal laws affecting national
banks as of January 1, 1950, compiled by Comptroller of the Currency.

PART 1-INVESTMENT SECURITIES as provided in paragraphs (b) and (c) of

this section there must be present one or

both of the following characteristics:


1.1 Scope and application.

(1) A public distribution of the se-

1.2 Definition of the term "investment

curities must have been provided for or


1.3 Limitations and restrictions on pur-

made in a manner to protect or insure

the marketability of the issue; or,

chase of investment securities for

bank's own account.

(2) Other existing securities of the

1.4 Exception to limitations and restric- obligor must have such a public distri-


bution as to protect or insure the mar-


ketability of the issue under con-



(b) In the case of investment secu-

1.5 Miscellaneous rulings.

rities for which a public distribution as

1.6 Texas Turnpike Authority.

set forth in paragraph (a) (1) or (2) of

1.9 Commonwealth of Kentucky, Depart-

this section cannot be so provided, or so

ment of Parks.

1.10 City of Kansas City, Missouri.

made, and which are issued by estab-

1.11 Georgia State authorities.

lished commercial or industrial busi-

1.12 New Jersey Highway Authority.

nesses or enterprises, that can demon-

1.13 The Music Center Lease Company, Los strate the ability to service such

Angeles, California.

securities, the debt evidenced thereby

1.14 Federal National Mortgage Association. must mature not later than ten years

1.15 Dormitory authority of the State of

after the date of issuance of the security

New York.

and must be of such sound value or so

1.16 Massachusetts Turnpike Authorities.

1.17 City of London, Kentucky.

secured as reasonably to assure its pay-

1.18 Inter-American Development Bank.

ment; and such securities must, by their

1.19 Savings Banks Trust Company, New terms, provide for the amortization of

York, New York.

the debt evidenced thereby so that at

1.21 City of Opelika, Alabama.

least 75 percent of the principal will be

extinguished by the maturity date by

AUTHORITY: $ $ 1.1 to 1.21 issued under R.S.
5186 as amended; 12 U.S.C. 24. Additional substantial periodic payments: Provided,
authority is cited in parentheses following That no amortization need be required
sections affected.

for the period of the first year after the

date of issuance of such securities.

§ 1.1 Scope and application.

(c) Special revenue obligations of

States or local governments or of duly

(a) This part is issued by the Comp-

troller of the Currency under authority

constituted public authorities thereof

which possess a high degree of credit

of paragraph Seventh of section 5136 of

soundness, so as to assure sale under or-

the Revised Statutes, as amended (12

dinary circumstances with reasonable

U.S.C. 24);

(b) This part applies to the purchase

promptness at a fair value, but which do

for its own account of investment se-

not meet the distribution standards of
curities by a national bank or a State

paragraph (a) (1) or (2) of this section,
member bank of the Federal Reserve

may be considered to constitute “invest-

ment securities."


(d) Where the security is issued under

[22 F.R. 5627, July 17, 1957)

a trust agreement, the agreement must

§ 1.2 Definition of the term “investment provide for a trustee independent of the


obligor, and such trustee must be a bank

(a) An obligation of indebtedness

or trust company.

which may be purchased for its own ac-

(e) All purchases of investment secu-
count by a national bank or State mem-

rities by national and State member

ber bank of the Federal Reserve System

banks for their own account must be se-

in order to constitute an “investment

curities “in the form of bonds, notes,

security" within the meaning of para-

and/or debentures, commonly known as

graph Seventh of section 5136 of the Re-

investment securities"; and every trans-

vised Statutes, must be a marketable

action which is in fact such a purchase

obligation, i. e., it must be salable under

must, regardless of its form, comply with

ordinary circumstances with reasonable

this part.

promptness at a fair value; and except

(22 F.R. 5627, July 17, 1957)

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