In evaluating the coverage of a bank's Regulation U compliance for loans to purchase or carry margin stocks, which of the following securities is NOT covered in the regulatory definition of "margin stock"?
In evaluating the coverage of a bank's Regulation U compliance for loans to purchase or carry margin stocks, which of the following securities is NOT covered in the regulatory definition of "margin stock"?
A security issued by an investment company that is licensed under the Small Business Administration Act is not covered in the regulatory definition of 'margin stock.' These securities are generally exempt from being classified as margin stocks because they are part of programs aimed at supporting small businesses and do not fit the standard characteristics that Regulation U targets for regulating loans to purchase or carry margin stocks.
B. A security issued by an investment company that is licensed under the Small Business Administration Act is not typically included in the definition of margin stock for the purposes of Regulation U. These securities are generally exempt because they are part of programs designed to support small businesses and do not fit the typical profile of margin stocks that Regulation U aims to regulate in terms of credit for purchasing or carrying.