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federal Reserve Bank of Dallas DALLAS, TEXAS 75222 C i r c u l a r No. 78-35 March 31, 1978 AMENDMENT TO REGULATION Y Municipal S e c u r itie s D ealer A ctivities TO ALL MEMBER BANKS, BANK HOLDING COMPANIES, AND OTHERS CONCERNED IN THE ELEVENTH FEDERAL RESERVE DISTRICT: T h e Board of G o v e r n o r s h a s a m e n d e d its R egulation Y effective A pril 5, 1978, to r e q u i r e b a n k holding com pan ies a u th o r i z e d b y th e Board to c o n d u c t munic ipal s e c u r i t i e s d e a l e r a c t iv itie s to file c e r t a i n information with th e B o a r d . On March 30, 1977, the Board is s u e d fo r comment p r o p o s e d a m e n d m en ts to its R egulation H (State Member Banks) a n d R egulation Y (Bank Holding Companies) to r e q u i r e th ose th a t a r e munic ipal s e c u r it ie s d e a l e r s for w hic h th e Board is the a p p r o p r i a t e r e g u l a t o r y a g e n c y u n d e r s e c tion 3(a) (34) of t h e S e c u r itie s E x c h a n ge Act of 1934 (15 U . S . C . 78c(a) (34)) to file with the Board information a b o u t p e r s o n s who a r e a s s o c ia te d with them a s municipal s e c u r i t i e s p r i n c i p a l s o r municipal s e c u r i t i e s r e p r e s e n t a t i v e s . In c o n ju n c tio n w ith that p r o p o s a l , th e Board also p r o p o s e d Form MSD-4, "Uniform A pplication for Municipal S e c u r itie s Principal o r Municipal S e c u r i tie s R e p r e s e n ta t iv e A sso c ia ted with a Bank Municipal S e c u r itie s D e a le r ," a n d Form MSD-5, "Uniform T e rm in atio n Notice for Municipal S e c u r itie s P rin c ip a l o r Municipal S e c u r itie s R e p r e s e n ta t iv e A ssociated with a Bank Municipal S e c u r i t i e s D e a l e r ," for u s e in com plying with the p r o p o s e d am e n dm ents to Reg ulatio ns H a n d Y. After c o n s i d e r i n g th e comments sub m itte d on th e p ro p o s e d a m e n d m ents a n d p r o p o s e d f o r m s , th e B o a r d , on S e p te m b e r 1, 1977, a d o p te d the p ro p o s e d a m e ndm ent to R egulation H a n d the a t te n d a n t forms b u t d e c id e d to d e fe r a doption of th e p r o p o s e d am endm ent to Regulation Y in view of its action of O ctober 19, 1976, d e f e r r i n g action on a p p lic atio n s filed u n d e r section 4(c) (8) of th e Bank Holding Company A ct fo r a u th o r ity to u n d e r w r i t e a n d deal in F ederal g o v e r n m e n t a n d munic ipal s e c u r i t i e s . Banks and others are encouraged to use the following incoming W A T S numbers in contacting this Bank: 1 -8 00 -492 -440 3 (intrastate) and 1-8 00 -527 -497 0 (interstate). For calls placed locally, please use 651 plus the extension referred to above. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - On J a n u a r y 26, 1978, th e B oard a n n o u n c e d that it would re su m e p r o c e s s i n g of a p p lic a tio n s from b a n k ho ld in g com panies to e n g a g e in Federal g o v e r n m e n t a n d municipal s e c u r i t y d e a l e r a ctiv itie s on a c a s e - b y - c a s e b a s i s . T h e r e f o r e , th is a m e n dm en t to Regulation Y will e x te n d to b a n k holdin g com p a n ie s a n d c e r t a i n of t h e i r s u b s i d i a r i e s th e filing r e q u i r e m e n t s th a t a r e now imposed on State m ember b a n k s with r e s p e c t to municipal s e c u r i t i e s d e a l e r activities. Member b a n k s , b a n k hold in g c o m p a n ie s , a n d o th e r s th a t maintain Regulations B i n d e r s sho uld file the e n closed am endm ent in th e i r b i n d e r s . Any q u e s ti o n s c o n c e r n i n g th e a m e nd m ent sh o u ld be d ir e c te d to o u r Holding Company S u p e r v i s i o n D e partm en t, Ext. 6182. Additional copies of the a m e n dm en t will be f u r n i s h e d upon r e q u e s t to th e S e c r e t a r y ' s Office of th is B a n k , Ext. 6267. S in c e r e ly y o u r s , R ob ert H . Boykin F i r s t Vice P r e s i d e n t E n c lo s u re BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM INTEREST ON DEPOSITS AMENDMENT TO REGULATION Y Effective A p ril 5, 1978, Section 22 5.5 is a m e n d ed by a d ding n e w p a r a g r a p h (f) as follows: S E C T I O N 225 .5 — A D M I N I S T R A T I O N (f) Bank holding companies, certain of their sub sidiaries, and subsidiaries, departments, or divi sions of such subsidiaries, which are municipal securities dealers. ( 1 ) F o r purpo ses of this p a r a g r a p h , th e te rm s h erein h av e th e m e an in g s given th e m in section 3 ( a ) o f the Securities E x c h a n g e A c t o f 1934 (1 5 U .S.C . § 7 8 c ( a ) ) an d the rules o f th e M u n ic ip a l Securities R u le m a k in g B o ard . T h e t e r m A c t shall m e a n the Securities E x c h a n g e A c t of 1934 (1 5 U .S.C . §78a et s e q .) . ( 2 ) A b a n k h o ldin g co m p a n y , o r a subsidiary of a b a n k h o lding c o m p a n y w h ic h is a b a n k (o t h e r th a n a n a tio nal b a n k o r a b a n k op eratin g u n d e r th e C o d e of L a w f o r the D istric t o f C o lu m b ia o r a b a n k in sured b y th e F e d e r a l D ep o sit In s u ra n c e C o r p o r a t i o n ) , or a subsid iary o r a d e p a r t m e n t o r a division o f such a subsidiary, w h ich is a m u n ic ip a l securities d ealer shall n o t p e rm it a p e rs o n to be associated w ith it as a m unicipa l securities p rincipal o r m u n icip a l securities r e p r e s e n t a t i v e unless it h a s filed w ith th e B o a rd an ori ginal an d tw o copies of F o r m M S D -4 , “ U n i fo r m A pp lic a tio n f o r M u n ic ip a l Securities P ri n c i pal o r M u n ic ip a l Securities R e presentative A sso ciated w ith a B a n k M u n ic ip a l Securities D e a le r ,” co m p leted in a c c o rd a n c e w ith the instructions co n ta in e d therein, f o r t h a t perso n. F o r m M S D -4 is prescrib ed by th e B o a rd fo r p u rp o s e s of p a r a g r a p h (b) o f M u n icip al Securities R u le m a k in g B o a rd R u le G -7 , “In f o r m a t io n C o n c e rn i n g A sso ciated P e rs o n s.” ( 3 ) W h e n e v e r a m unicipal securities dealer receives a sta te m e n t p u r s u a n t to p a r a g r a p h (c ) of M u n ic ip a l Securities R u le m a k in g B o a rd R u le G -7, “ I n f o r m a t io n C o n c e rn i n g A ssociated P e r sons,” f r o m a p e rs o n f o r w h o m it h a s filed a F o r m M S D - 4 w ith th e B o a rd p u r s u a n t to s u b p a r a g ra p h ( 2 ) of this p a r a g r a p h , su c h dealer shall, w ithin ten days th e reafter, file th r e e copies of t h a t state m e n t w ith th e B o a r d a c c o m p a n ie d b y a n original an d tw o copies of a tr a n sm itta l le tte r w h ic h in cludes the n a m e o f the d e a le r a n d a re feren ce to the m a te ri a l tr a n s m itt e d identifyin g th e p e rs o n involved a n d is signed by a m u n ic ip a l securities p rincipal associated w ith th e dealer. ( 4 ) W ith in 30 days a fte r the te rm i n a ti o n o f the associa tio n of a m u n icip a l securities p rin cip al or m u n icip a l securities re presentative w ith a m u n i c i pal securities d ealer w hich h a s filed a F o r m M S D 4 w ith th e B o a rd f o r t h a t p e rs o n p u r s u a n t to su b p a r a g r a p h ( 2 ) of this p a ra g r a p h , su ch dealer shall file an original a n d tw o copies of a notifica tion o f te rm in a tio n w ith th e B o a rd o n F o r m M S D 5, “ U n i f o r m T e r m in a t io n N o tic e f o r M u n ic ip a l Securities P rin cip al o r M u n ic ip a l Securities R e p resenta tiv e A sso ciated w ith a B a n k M u n ic ip a l Securities D e a le r,” co m p le te d in a c c o rd a n c e w ith the in s truc tions c o n ta in e d therein. ( 5 ) A m u n ic ip a l securities d ealer w h ic h files a F o r m M S D -4 , F o r m M S D -5 , o r sta te m e n t with the B o a rd u n d e r this p a r a g r a p h shall retain a co py of each such F o r m M S D -4 , F o r m M S D -5 , o r sta te m e n t until at least th r e e y ears a fte r the te r m in atio n o f th e e m p lo y m e n t o r o th e r association w ith su ch d ealer o f the m u n icip a l securities p r i n cipal o r m u n ic ip a l securities re p resentativ e to w h o m th e f o r m o r s t a te m e n t relates. (6) T h e d ate t h a t th e B o a rd receives a F o r m M S D -4 , F o r m M S D -5 , o r s t a te m e n t filed w ith th e B o a r d u n d e r this p a r a g r a p h shall b e th e d ate of filing. S uch a F o r m M S D -4 , F o r m M S D -5, o r s t a te m e n t w h ich is n o t p r e p a r e d a n d ex ecuted in a c c o rd a n c e w ith th e applicable req u ire m e n ts m a y be r e t u r n e d as u n a c c e p ta b le f o r filing. A c ceptan ce f o r filing shall n o t constitute any finding th a t a F o r m M S D -4, F o r m M S D -5 , o r s t a te m e n t has b een co m p leted in a c c o rd a n c e w ith the a p plicable r e q u ire m e n ts o r th a t an y in f o rm a ti o n re p o rte d the rein is true, c u rre n t, com ple te, o r n o t misleading. E very F o r m M S D -4, F o r m M S D -5 , o r s t a te m e n t filed w ith th e B o a rd u n d e r this p a r a g ra p h shall constitute a filing w ith th e Securities a n d E x c h a n g e C o m m iss io n f o r p u rpo ses of section 17(c)(1) o f th e A c t (15 U .S.C . sectio n 78q(c)(l) a n d a “re p o r t,” “a p p lication ,” o r “d o c u m e n t ” within th e m e a n in g o f section 32(a) o f the A c t (15 U .S.C . 78ff(a)). t F o r this Regulation to be complete as amended effective April 5, 1978, retain: 1) Printed Regulation Y pamphlet as amended effective June 24, 1974; 2) Technical correction in Regulation Y pamphlet covering Sections 225.3 and 225.4; 3) Amendment effective December 1, 1975, Section 2 2 5 .5 (c ); 4) Amendment effective May 15, 1976, adding a new Section 225.6; 5) Amendment effective October 13, 1976, adding footnote 4 at the end of paragraph 225.4(a) (6) (iii); 6) Amendment effective October 3, 1977, Section 225.5(d) and (e); 7) Amendment effective Decemer 31, 1977, adding paragraph (4) to Section 225.5(c); and 8) This slip sheet.
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