FRGTU_20240628_omb

Supporting Statement for the
Margin Credit Reports
(FR G-1, FR G-2, FR G-3, FR G-4, FR T-4, and FR U-1; OMB No. 7100-0011)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has extended for three years, with
revision, the Margin Credit Reports (OMB No. 7100-0011). This information collection
comprises the following six reports:
• Registration Statement for Persons Who Extend Credit Secured by Margin Stock (Other
Than Banks, Brokers, or Dealers) (FR G-1),
• Deregistration Statement for Persons Registered Pursuant to Regulation U (FR G-2),
• Statement of Purpose for an Extension of Credit Secured by Margin Stock by a Person
Subject to Registration Under Regulation U (FR G-3),
• Annual Report (FR G-4),
• Statement of Purpose for an Extension of Credit by a Creditor (FR T-4), and
• Statement of Purpose for an Extension of Credit Secured by Margin Stock (FR U-1).
The Margin Credit Reports relate to extensions of credit secured by margin stock. The
Board collects the information gathered by the Margin Credit Reports so that it may meet certain
obligations under the Securities Exchange Act of 1934 (the Act).
The Board revised the Margin Credit Reports by updating the confidentiality treatment
for the FR G-1 and FR G-4 reports. There were no changes made to the FR G-2, FR G-3,
FR T-4, or FR U-1.
The current estimated total annual burden for the Margin Credit Reports is 697 hours, and
would remain the same with the revisions. The forms and instructions are available on the
Board’s public website at https://www.federalreserve.gov/apps/reportingforms.
Background and Justification
The Act authorizes the Board to regulate securities credit extended by brokers, dealers,
banks, and other lenders and directs the Federal Reserve to regulate the amount of credit that can
be extended on any security when the credit is used to purchase or carry securities. The Board
has implemented its authority under the Act through three regulations. Regulation X - Borrowers
of Securities Credit (12 CFR Part 224), which covers borrowers, does not contain any collections
of information. The other two regulations, Regulation T - Credit by Brokers and Dealers
(12 CFR Part 220) and Regulation U - Credit by Banks and Persons other than Brokers or
Dealers for the Purpose of Purchasing or Carrying Margin Stocks (12 CFR Part 221), cover
lenders and do contain collections of information.
The FR T-4, FR U-1, and FR G-3 are forms that implement recordkeeping requirements
for brokers and dealers, banks, and other lenders, respectively. The FR T-4 documents the
purpose of credit being extended when that credit is not to purchase, carry, or trade in securities

and the credit is in excess of that otherwise permitted under Regulation T. The FR G-3 and
FR U-1 document the purpose of loans secured by margin stock. For purposes of these forms,
margin stock is defined by Regulation U, 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 such stocks, and (3)
shares of most mutual funds.1
Certain lenders, as described below, that are not brokers, dealers, or banks making loans
secured by margin stock must register and deregister with the Federal Reserve using the FR G-1
and FR G-2, respectively, and must file an annual report (FR G-4) while registered. The FR G-1,
FR G-2, and FR G-4 reporting requirements collect data used to identify lenders subject to the
Board’s Regulation U to verify their compliance with the regulation and to monitor margin
credit.
The information collected by the FR G-1, FR G-2, FR G-3, FR G-4, FR T-4, and FR U-1
is not available from other sources.
Regulation T
Regulation T regulates extensions of credit by brokers and dealers, pursuant to section 7
of the Act (15 U.S.C. § 78g). Section 7(c) of the Act prohibits any broker, dealer, or member of a
national securities exchange (member) from extending or maintaining credit or arranging for the
extension or maintenance of credit to or for any customer on any security (other than an
exempted security), without collateral or using any collateral other than securities, except in
accordance with the rules and regulations the Board may prescribe.2 The Board has implemented
this provision in Regulation T. Regulation T imposes limitations on the extension of “purpose
credit,”3 defined as credit for the purpose of buying, carrying, or trading in securities or buying
or carrying any part of an investment contract security which shall be deemed credit for the
purpose of buying or carrying the entire security.4 However, these limitations do not apply to
credit that is not purpose credit if the creditor accepts in good faith from the customer a written
statement that it is not purpose credit.5 Regulation T defines “good faith” to require that a broker
or dealer be aware of the circumstances surrounding an extension of credit and be satisfied that
the customer’s statement as to the use of the credit is truthful,6 in order to ensure compliance
with section 7(c) of the Act.
Regulation U
Regulation U regulates extensions of margin credit by lenders (including banks) other
than securities brokers and dealers, pursuant to section 7 of the Act (12 U.S.C. § 78g). Section
7(d) contains a general prohibition on persons other than brokers, dealers, and members from
1

See 12 CFR 221.2.
15 U.S.C. § 78g(c)(1).
3 See 12 CFR 220.6(e).
4 12 CFR 220.2.
5 12 CFR 220.6(e)(2).
6 12 CFR 220.2.
2

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extending margin credit in contravention of such rules and regulations that the Board prescribes,
which the statute states may be similar to those imposed on brokers, dealers, or members.7
Historically, the Board implemented this provision in Regulations U and G. Regulation U
applied only to banks while the former Regulation G imposed similar restrictions on lenders
other than brokers, dealers, and banks. However, Regulation G was merged into Regulation U in
1998.8 The FR G-1, FR G-2, FR G-3, and FR G-4 reporting forms for nonbank lenders maintain
the G designation even though Regulation G was merged into Regulation U.
Description of Information Collection
Registration Statement for Persons Who Extend Credit Secured by Margin Stock (Other
Than Banks, Brokers, or Dealers) (FR G-1)
Section 221.3(b)(1) of Regulation U9 requires that the FR G-1 be submitted by every
person (other than commercial banks, brokers, or dealers) (nonbank lenders) not currently
registered when the amount of credit extended during a calendar quarter equals $200,000 or
more in credit secured directly or indirectly by collateral that includes any margin stock, or the
amount of credit outstanding at any time during that calendar quarter equals $500,000 or more in
credit secured directly or indirectly by collateral that includes any margin stock. Information
collected on the registration statement consists of certain background questions, information
regarding the credit being extended, and dollar amounts of margin credit.
The registration statement remains in effect until an eligible nonbank lender
electronically submits a deregistration statement (FR G-2) to the Board, which is then sent to and
approved by the Federal Reserve Bank in whose district it resides.
The registration statement is required to enable the Federal Reserve to identify nonbank
lenders subject to Regulation U, to verify compliance with the regulation, and to monitor margin
credit. In addition, registered nonbank lenders can be subject to periodic review by the Board,
National Credit Union Administration, and Farm Credit Administration.
Deregistration Statement for Persons Registered Pursuant to Regulation U (FR G-2)
A registered nonbank lender may apply to deregister under section 221.3(b)(2) of
Regulation U10 if the lender has not, during the preceding six calendar months, had more than
$200,000 of margin-stock-secured credit outstanding. The deregistration statement collects
identification and contact information regarding the lender, as well as the authorizing officer’s
signature and title and the date. A nonbank lender who has deregistered must reregister if
subsequent lending volume exceeds the thresholds identified in Regulation U.

7

15 U.S.C. § 78g(d)(1). This prohibition does not apply to extensions of credit by banks on a security other than
equity securities. 15 U.S.C. § 78g(d)(2)(D).
8 See 63 FR 2806 (January 16, 1998).
9 12 CFR 221.3(b)(1).
10 12 CFR 221.3(b)(2).

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Annual Report (FR G-4)
The FR G-4 annual report requires all nonbank lenders registered pursuant to
Regulation U to provide the total amount of credit outstanding secured directly or indirectly by
margin stock as of June 30, and the amount of credit extended secured directly or indirectly by
margin stock during the year. Lenders are required to indicate whether the loans involved
constitute purpose or nonpurpose credit and to disclose whether credit is used to fund employee
stock options, purchases, or ownership plans. Those lenders funding stock options, purchases,
and ownership plans must specify whether such credit was extended pursuant to the provisions
set forth in section 221.4 of Regulation U,11 which authorizes employers to extend credit to
employees and ESOPs without regard to the margin requirements.
The information submitted on the annual report is required pursuant to Regulation U to
enable the Federal Reserve to monitor the amount of credit that is secured by margin stock and
that is extended by nonbank lenders.
Statements of Purpose (FR T-4, FR U-1, and FR G-3)
Lenders that extend credit pursuant to the Federal Reserve’s margin requirements are
sometimes required to obtain purpose statements from their customers. The FR T-4 purpose
statement is used for extensions of credit by brokers and dealers,12 the FR U-1 is used for
extensions of credit by banks,13 and the FR G-3 is used for extensions of credit by other
lenders.14
Both the borrower and the lender complete portions of the purpose statement. Each
purpose statement consists of three parts. The borrower completes Part I of the reporting form
and is required to do the following: state the amount of the loan and whether the purpose of the
loan is to purchase, carry, or trade in securities (pursuant to Regulation T) or purchase or carry
margin securities (pursuant to Regulation U) and, if not, describe the specific purpose of the
loan. Exclusive to the FR T-4, borrowers must also answer a question as to whether the securities
serving as collateral will be delivered against payment. The borrower must sign and date the
reporting form. The lender completes Part II, which may entail listing and valuing any collateral.
The lender then signs and dates Part III of the reporting form, acknowledging that the customer’s
statement is accepted in good faith. The lender is required to hold the forms for at least three
years after the credit is extinguished. The Board does not collect or process this information, but
the information required on the form may be used by Federal Reserve examiners to assess
compliance with the Act and Regulations T and U.
The FR T-4, FR U-1, and FR G-3 purpose statements serve as a compliance tool for
Regulation T and U lenders, as well as a means by the Justice Department or the Securities and
Exchange Commission to verify compliance with the Act and the Board’s rules, and, as
necessary, an evidentiary or enforcement tool.
11

12 CFR 221.4.
See 12 CFR 220.1(a).
13 See 12 CFR 221.3(c)(1)(i).
14 See 12 CFR 221.3(c)(1)(ii).
12

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Statement of Purpose for an Extension of Credit by a Creditor (FR T-4). This form
must be completed only if the purpose of the credit being extended is not to purchase, carry, or
trade in securities and the credit is in excess of that otherwise permitted under Regulation T
(nonpurpose credit). The information captured on FR T-4 provides a written record of the
amount of nonpurpose credit being extended, the purpose for which the money is to be used, and
a listing and valuation of collateral.
Statement of Purpose for an Extension of Credit Secured by Margin Stock (FR U-1).
To comply with the requirements of Regulation U, a bank must complete the FR U-1 purpose
statement when it extends credit in excess of $100,000 secured directly or indirectly, in whole or
in part, by any margin stock.15 The information captured on FR U-1 provides a written record of
the amount of credit being extended, the purpose for which the money is to be used, and a listing
and valuation of collateral.
Statement of Purpose for an Extension of Credit Secured by Margin Stock by a
Person Subject to Registration Under Regulation U (FR G-3). Any nonbank lender subject to
the registration requirement of Regulation U must complete an FR G-3 purpose statement for
each extension of credit secured directly or indirectly, in whole or in part, by any margin stock.16
The purpose statement is intended to ensure that a lender does not extend credit to purchase or
carry margin stock in excess of the amount permitted by the Federal Reserve pursuant to
Regulation U.
The Board understands that respondents use information technology to comply with these
provisions, including the use of electronic submission through email and electronic storage of
records.
Personally Identifiable Information
Personally identifiable information (PII) obtained in this collection can include
identifying information about the persons registered, such as name, residence address, securities
credit, and other financial status. The information provided is not sensitive in nature and is
necessary to assist the Board in maintaining a current list of registrants and verifying their
compliance with Regulation U. Information collected as part of this process is stored in the
System of Records Notice BGFRS-16, Regulation U Reports of Nonbank Lenders (83 FR
43872).
Respondent Panel
The FR G-1, FR G-2, FR G-3, and FR G-4 panels comprise lenders, other than banks,
brokers, or dealers, that extend margin credit, including federal and state credit unions; insurance
companies; commercial and consumer credit organizations; production credit associations; small
businesses; insurance premium funding plans; plan-lenders (a company or its affiliate that
extends credit to employees to purchase company stock under an eligible employee stock option
or stock purchase plan); and lenders to Employee Stock Ownership Plans (ESOPs), thrift plans,
15
16

12 CFR 221.3(c)(1)(i).
12 CFR 221.3(c)(1)(ii).

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and broker-dealer affiliates. The FR T-4 panel comprises brokers and dealers and the FR U-1
panel comprises banks.
Frequency and Time Schedule
The FR G-1, FR G-2, and FR G-3 are event generated. The FR G-1, FR G-2, and FR G-4
are sent directly to the Board as a PDF via a designated e-mail address. The FR G-l is eventgenerated and must be filed within 30 calendar days following the end of the calendar quarter
during which the nonbank lender becomes subject to the registration requirements. The FR G-2
must be filed when the lender is no longer subject to the registration requirements. All FR G-1
registrants are required to file the FR G-4 annually, within 30 calendar days of the June 30 as of
date. The FR G-3, FR T-4, and FR U-1 are event-generated recordkeeping requirements and
should be retained for three years after the credit is extinguished.
Revisions to the FR G-1 and FR G-4
The Board revised the FR G-1 and FR G-4 by updating the confidentiality treatment, as
described in the reporting instructions to state that individual respondents may request that
information submitted to the Board through the FR G-1 and FR G-4 be kept confidential. The
Board changed the language in the directions in both forms to reflect that respondents may
request confidential treatment and that the Board will evaluate whether such treatment is
appropriate on a case-by-case basis. The forms previously stated that the Board considers the
information submitted to be confidential. The Board believes these changes more accurately
reflect its obligations under the Privacy Act of 1974 (5 U.S.C. § 552a). There are no changes
being made to the FR G-2, FR G-3, FR T-4, or FR U-1.
Public Availability of Data
No data collected by this information collection are published.
Legal Status
The FR G-1, FR G-2, FR G-3, FR G-4, FR T-4, and FR U-1 are authorized by sections 7
and 23 of the Securities Exchange Act of 1934 (15 U.S.C. § 78g and 78w) which state,
respectively, that the Board shall “prescribe rules and regulations with respect to the amount of
credit that may be initially extended and subsequently maintained on any security” and that
“[t]he Commission, the Board of Governors of the Federal Reserve System, and the other
agencies enumerated in section 78c(a)(34) of this title shall each have power to make such rules
and regulations as may be necessary or appropriate to implement the provisions of this chapter
for which they are responsible or for the execution of the functions vested in them by this
chapter, and may for such purposes classify persons, securities, transactions, statements,
applications, reports, and other matters within their respective jurisdictions, and prescribe
greater, lesser, or different requirements for different classes thereof.” All six reports are
mandatory.

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As proposed, individual respondents would be permitted to request that information
submitted to the Board through the FR G-1 and FR G-4 be kept confidential. If a respondent
requests confidential treatment, the Board will determine whether the information is entitled to
confidential treatment on a case-by-case basis. To the extent a respondent submits nonpublic
commercial or financial information, which is both customarily and actually treated as private by
the respondent, the respondent may request confidential treatment pursuant to exemption 4 of the
Freedom of Information Act (FOIA) (5 U.S.C. § 552(b)(4)). To the extent a respondent submits
personnel, medical, or similar files, the disclosure of which would constitute an unwarranted
invasion of privacy, the respondent may request confidential treatment pursuant to exemption 6
of the FOIA (5 U.S.C. § 552(b)(6)).
Because the FR T-4, FR U-1, and FR G-3 are maintained at each banking organization,
FOIA would only be implicated if the Board obtained such records as part of the examination or
supervision of a banking organization. In the event the records are obtained by the Board as part
of an examination or supervision of a financial institution, this information would be considered
confidential pursuant to exemption 8 of the FOIA, which protects information contained in
“examination, operating, or condition reports” obtained in the bank supervisory process
(5 U.S.C. § 552(b)(8)). Information collected through the FR G-2 is not considered to be
confidential.
Consultation Outside the Agency
There has been no consultation outside the Federal Reserve System.
Public Comments
On February 16, 2024, the Board published an initial notice in the Federal Register (89
FR 12342) requesting public comment for 60 days on the extension, with revision, of the
FR G-1, FR G-2, FR G-3, FR G-4, FR T-4, and FR U-1. The comment period for this notice
expired on April 16, 2024. The Board did not receive any comments. The Board adopted the
extension, with revision, of the FR G-1, FR G-2, FR G-3, FR G-4, FR T-4, and FR U-1 as
originally proposed. On June 28, 2024, the Board published a final notice in the Federal Register
(89 FR 53999).
Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the Margin Credit
Reports is 697 hours, and would remain the same with the revisions. The total burden comprises
both reporting and recordkeeping burden. The total number of respondents is based on the
number of filing submissions to the central mailbox in the previous year. The total annual
reporting burden for the FR G-1, FR G-2, and FR G-4 is estimated to be 314 hours. The total
annual recordkeeping burden for the FR G-3, FR T-4, and FR U-1 purpose statements is
estimated to be 383 hours. The burden estimate was produced using the standard Board burden
calculation methodology. These reporting and recordkeeping requirements represent less than 1
percent of the Board’s total paperwork burden.

7

Estimated
number of
respondents17

Estimated
annual
frequency

Estimated
Estimated
average hours annual burden
per response
hours

25
12

1
1

1.65
0.53

41
6

129

1

2.07

267

10
14
14

20
20
75

0.25
0.25
0.25

50
70
263

Reporting
FR G-1
FR G-2
FR G-4
Recordkeeping
FR G-3
FR T-4
FR U-1
Total

697

The estimated total annual cost to the public for the Margin Credit Reports is $48,685,
and would remain the same with the revisions.18
Sensitive Questions
This information collection contains no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
The estimated cost to the Federal Reserve System for collecting and processing this
information collection is negligible.

17

Of these respondents, none are considered small entities as defined by the Small Business Administration (i.e.,
entities with less than $850 million in total assets). Size standards effective March 17, 2023. See
https://www.sba.gov/document/support-table-size-standards.
18 Total cost to the responding public is estimated using the following formula: total burden hours, multiplied by the
cost of staffing, where the cost of staffing is calculated as a percent of time for each occupational group multiplied
by the group’s hourly rate and then summed (30% Office & Administrative Support at $23, 45% Financial
Managers at $84, 15% Lawyers at $85, and 10% Chief Executives at $124). Hourly rates for each occupational
group are the (rounded) mean hourly wages from the Bureau of Labor Statistics (BLS), Occupational Employment
and Wages, May 2023, published April 3, 2024, https://www.bls.gov/news.release/ocwage.t01.htm. Occupations are
defined using the BLS Standard Occupational Classification System, https://www.bls.gov/soc/.

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