DEFINITION of 'Regulation X'
A rule issued by the Board of Governors of the Federal Reserve System (FRS) that governs credit limits granted to foreign persons or organizations for purchases of American Treasuries.
Borrowers who are subject to Regulation X must also prove that the credit they obtain conforms to the limits under Federal Reserve Regulations T (relating to brokers and dealers) and U (banks and lenders).
BREAKING DOWN 'Regulation X'
Regulation X is part of the Securities Exchange Act of 1934. It applies to credit secured both within and outside the U.S. Borrowers who can claim permanent residency outside the U.S. and do not obtain or carry purpose credit in excess of $100,000 outside the U.S. are exempt from Regulation X.