Letter 12

Purchase of Sale of Securities Subject to Resale or Repurchase Agreement​​​​​​​​​

The purchase or sale of securities by a Wisconsin state bank, under a written agreement to resell or repurchase at the end of a stated period, is not a loan or borrowing within the meaning of Wis. Stat. s. 221.29 and 221.33, respectively. It should be noted however that while these transactions are no longer subject to the loan limitations of Wis. Stat. s. 221.29, they remain subject to the investment limitations of that section.​

The above interpretation is not inte
nded to change the present record keeping and reporting requirements in regard to these transactions. They will continue to be carried as segregated items on the bank's b​ooks and will be reported separately in the space provided on reports of condition.

It should also be noted that securities purchased under resale agreement continue to be ineligible for reserve purposes under Wis. Stat. s. 221.27 by the purchasing bank.

Banking Letter​ 12, November 28, 1972, Commissioner Mildenberg