A form filed by a borrower that describes the use of a loan backed by securities, and guarantees that the funds lent will not be used illegally to buy securities against Federal Reserve regulations.
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A form banks require borrowers to fill out when borrowing funds secured by margin stock in excess of a certain amount. The purpose statement indicates the reason the borrower is taking out the loan and guarantees that he/she will not use the funds to buy securities in violation of SEC or other regulations.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
A document that states the use to which proceeds of a loan that is backed by securities are to be put. The borrower agrees not to use the funds to purchase securities in violation of Federal Reserve credit regulations.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.