Which regulation concerns credit extended by persons other than brokers?

Prepare for the FDIC Technical Evaluation Test with engaging questions and comprehensive explanations. Enhance your knowledge and boost your confidence for the exam!

The regulation that specifically addresses credit extended by persons other than brokers is Regulation U. This regulation governs the extension of credit by banks and other lenders, allowing them to grant loans that may be secured by margin securities. Essentially, Regulation U is designed to manage the risks associated with lending practices in the securities market, ensuring that credit is extended appropriately and in a regulated manner, which helps maintain market stability.

Regulation O, on the other hand, pertains to loans and credit extensions to executive officers, directors, and principal shareholders of banks; it does not broadly cover credit extended by all entities. Regulation T focuses on the credit that can be extended by brokers and dealers in securities transactions, which is why it doesn’t apply to credit from other types of lenders. Regulation W regulates transactions between banks and their affiliates, which also does not pertain to the question of credit from non-broker entities. Thus, Regulation U is the correct choice as it encapsulates the manner in which credit is provided outside of broker-related transactions.

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