FEDERAL OPEN MARKET COMMITTEE Definition

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FEDERAL OPEN MARKET COMMITTEE (FOMC) is a 12-member committee consisting of the seven members of the Federal Reserve Bank and five of the 12 Federal Reserve Bank presidents. The president of the Federal Reserve Bank of New York is a permanent member while the other Federal Reserve presidents serve on a rotating basis. The committee sets objectives for the growth of money and credit that are implemented through purchases and sales of U.S. Government securi­ties in the open market. The FOMC also establishes policy relating to Federal Reserve System operations in the foreign exchange markets.

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FLOAT is 1. the time between the deposit of checks in a bank and when the amount is truly accessible; 2. the amount of funds represented by checks that have been written but not yet presented for payment. Some entities will play the float by writing checks although there are insufficient funds actually on deposit to cover the checks; and, 3. total shares outstanding less any shares held by officers, directors or beneficial owners of 10% or more. Also called publicly held shares.

EXEMPTED SECURITY is a security that is exempted from SEC regulations, including margin rules. Such securities include U.S. Treasury and government agency securities and municipal securities designated by the SEC.

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