• Regulation U is a Federal Reserve requirement for leveraged equity lenders, excluding securities brokers and dealers.
  • Leveraged shares include securities listed on a national exchange such as the NYSE, over-the-counter (OTC) securities traded on the Nasdaq, debt securities that can be converted into margined shares, and most mutual funds.
  • The regulation applies to commercial banks, savings and loan associations, federal savings banks, credit unions, credit unions, insurance companies, and companies with employee stock option plans.
  • Regulation U places restrictions on entities that make loans to purchase or hold leveraged shares using securities as collateral for loans.