Tighter securities payment deadline rule starts Nov. 25.

WASHINGTON -- The Federal Reserve Board finalized several changes to Regulation T this week affecting payment deadlines for securities purchases and transactions in government securities.

Effective Nov. 25, Fed rules will require broker-dealer customers to meet initial margin calls or make full cash payment for securities within two business days of the standard settlement period. Currently, regulations require payment within seven business days of a trade.

For now, the wording change has no effect because the current standard settlement period is five days. But in June 1995 the Securities and Exchange Commission will cut the settlement period to three days. At that time, Reg T's new "within two business days" will shorten the payment deadline to five days from seven.

A broker who wants to extend the deadline must get permission from its "designated examining authority," the Fed said. Currently, Reg T allows self-regulatory organizations to grant these extensions.

The Fed doubled to $1,000 the size of accounts that do not have to be liquidated if a customer does not pay on time.

The Fed also exempted from Reg T brokers and dealers who limit business to government securities. The Government Securities Act amendments of 1993 gave the Treasury Department authority to regulate government securities brokers and dealers, so the Fed's oversight is no longer needed.

The final regulation is substantially the same as the plan proposed by the Fed on July 1.

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