Junk Bond Limitation Act of 1987

Summary

Junk Bond Limitation Act of 1987 - Amends the Federal Deposit Insurance Act to prohibit an insured bank from investing in noninvestment grade securities the proceeds of which will be used to purchase or carry margin securities if such an investment would be prohibited for a similarly situated national bank. Prohibits an insured bank from investing in noninvestment grade securities if its primary capital is less than six percent of its total assets. Amends the National Housing Act to prohibit an insured institution from investing in noninvestment grade securities the proceeds of which will be used to purchase or carry margin securities if such an investment would be prohibited for a similarly situated Federal savings and loan association. Prohibits an insured institution from investing in noninvestment grade securities if its primary capital is less than six percent of its total assets. Amends the Securities Exchange Act of 1934 to apply the margin restrictions prescribed by the Federal Reserve Board to any lender that purchases any debt securities by a shell corporation the proceeds of which will be used to purchase or carry margin stock in the context of a tender offer or any acquisition of securities which would require the filing of a report under the Securities Exchange Act of 1934.

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1 official file

• Introduced in Senate

  summary · EN · 7 August 1987

  Open at official source

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