To: All Member Banks and Others Concerned in the Third Federal Reserve District

Attention: Chief Executive Officer and Chief Compliance Officer

Subject: Regulation Y (12 CFR Part 225) - Final Rule


The Federal Reserve Board has announced its approval of a final rule that modifies Regulation Y to allow bank holding companies engaged in permissible derivatives activities to transfer title to commodities underlying derivative contracts on an instantaneous, pass-through basis.

The Board's Notice, which was published in the Federal Register for July 3, 2003, is attached (140 KB, 8 pages).

Date: The final rule is effective August 4, 2003.

For Further Information: William L. Gaunt, Assistant Vice President (215) 574-6167, or James D. DePowell, Manager (215) 574-4153, Supervision, Regulation & Credit. For users of Telecommunications Devices for the Deaf (TDD) only, contact (202) 263-4869.