The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Federal R eserve Bank
OF DALLAS
W ILL IA M
H. WALLACE
DALLAS, TEXAS 7 5 2 2 2
f i r s t v ic e p r e s id e n t
AND CH IEF OPER ATING O FFIC ER
MdTCh
6 1987
Circular 87-19
TO: The Chief Executive Officer of all
member banks, bank holding companies
and others concerned in the
Eleventh Federal Reserve District
SUBJECT
Request for public comment on two notices required by the Government
Securities Act of 1986
DETAILS
The Board of Governors of the Federal Reserve System has recently
requested comment on two notices that would be used by financial institutions
to notify their federal regulators of their status under the Government
Securities Act of 1986.
Comments should be addressed to Mr. William W. Wiles, Secretary,
Board of Governors of the Federal Reserve System, Washington, D.C. 20551. All
correspondence should refer to Docket No. R-0596 and must be received by
March 27, 1987.
ATTACHMENTS
The Board's press release and the material as published in the
Federal Register are attached.
MORE INFORMATION
For further information, please contact David W. Dixon of the Legal
Department at (214) 651-6228.
Sincerely yours,
For additional copies of any circular please contact the Public Affairs Department at (214) 651-6289. Banks and others are
encouraged to use the following incoming WATS numbers in contacting this Bank (800) 442-7140 (intrastate) and (800)
527-9200 (interstate).
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
FEDERALRESERVEpressrelease
For immediate release
February 25, 1987
The Federal Reserve Board today requested comment on two notices that
would be used by financial institutions to notify their federal regulators of
their status under the Government Securities Act of 1986.
Comment must be received
by the Board by March 27.
The Act requires all financial institutions that act as government
securities brokers or dealers to notify their federal regulators of their brokerdealer activities.
the notice
Institutions that currently act as broker-dealers must file
b y July 25.
The second notice would be used by institutions that
terminate their status as a government securities broker or dealer.
Under the Act, the Board has the responsibility to establish the
form of these notices to be used by commercial banks, foreign banks, savings
banks and savings and loan associations.
A copy of the Board's notice, together with sample notices, is attached*
-
0
-
FEDERAL RESERVE SYSTEM
[Docket No. R-0596]
Financial Institutions Acting as Government
Securities Brokers or Government Securities Dealers
AGENCY:
Board of Governors of the Federal Reserve System.
ACTION:
Notice.
SUMMARY:
Under section 15C(a)(1)(B) of the Securities Exchange
Act of 1934,
15
U.S.C.
Government
Securities
financial
institutions
brokers
or
government
78o-5(a)(1)(B),
Act
of
that
1986
act
as
securities
as
(Pub.
amended
L.
by
99-571),
government
the
all
securities
dealers must notify their
designated federal supervisory agencies of their broker/dealer
activities,
unless
exempted
from
Treasury Department regulation.
responsibility
the notice requirement by
The Board of Governors has the
for establishing the form for this notice, as
well as* the form of the notice
to
be
filed
by
financial
institutions that are no longer acting as government securities
brokers or government securities dealers.
responsibilities,
the Board
In discharging these
is proposing to adopt Form G-FIN
(notification by financial institution of status as government
securities broker or dealer)
and Form G-FINW (notification by
financial institution of termination of status as government
securities broker or dealer).
2-
-
These forms are also being submitted for review and
approval under the Paperwork Reduction Act (chapter 35 of 44
U.S.C.) and OMB regulations on Controlling Paperwork Burdens on
the Public (5 CFR Part 1320).
supporting
Copies of the proposed forms and
documents are available from the Board clearance
officer listed below.
DATES:
Comments must be received by March 27, 1987.
ADDRESSES:
Comments/ which should refer to Docket No. R-0596,
should be sent
Governors
20551.
of
to Mr. William W. Wiles,
the
Federal
Reserve
Secretary,
System,
Comments may also be sent
Board of
Washington,
to Mr. Robert Neal,
Officer, Office of Information and Regulatory Affairs,
D.C.
Desk
Office
of Management and Budget, New Executive Office Building, Room
3208, Washington, D.C.
20503.
FOR FURTHER INFORMATION CONTACT:
Director
Robert S. Plotkin, Assistant
(202-452-2782), or Susan S. Meyers, Senior Securities
Regulation
Analyst
(202-452-2781),
Division
of
Banking
Supervision and Regulation? or, for the hearing impaired only:
Telecommunications
Device
for
the
Deaf
(202-452-3544),
Earnestine Hill or Dorothea Thompson, Board of Governors of the
Federal Reserve System.
Officer:
Nancy Steele,
(202-452-3822).
Federal Reserve Paperwork Clearance
Division of Research and
Statistics
Interested parties may also contact the OMB
Desk Officer, Robert Neal (202-395-6880).
3-
-
SUPPLEMENTARY INFORMATION:
forms
G-FIN
and
institutions
to
G-FINW
The Board is proposing to prescribe
as
the
vehicles
the
Government
78o-5(a)(1)(B).
Securities
securities dealers
Act
of
and
1986,
required
15 U.S.C.
All financial institutions (generally federal
and state chartered commercial banks,
banks,
financial
submit the notices of status as government
securities brokers and government
by
for
savings
act
and
unions)
that
brokers
or
section
78o-5(a)(1)(B)
loan
foreign banks, savings
associations,
but
not
credit
or cease to act as government securities
government
securities
to
file
dealers
these
are
required
notices
with
by
their
appropriate regulatory agencies unless exempted from the notice
requirement
by
Treasury
Department
rule.
Financial
institutions that are currently acting as government securities
brokers
or
government
exempt must
Financial
securities
file a notice on Form G-FIN by July 25,
institutions
activities
dealers and not otherwise
after
that
that
date
intend
must
to
file
a
engage
notice
in
1987.
these
prior
to
commencement of these operations.
In general,
national banks
the
appropriate
regulatory
agency
is the Comptroller of the Currency;
for
for state
member banks, the Board of Governors of the Federal Reserve
System? for insured non-member state banks, the Federal Deposit
Insurance Corporation?
for savings and loan associations,
the
Federal Home Loan Bank Board?
and for non-federally insured
financial
Securities
institutions,
the
and
Exchange
-
Commission.
4-
A foreign bank should refer to section 3(a)(34) of
the Securities Exchange Act (15 U.S.C.
78c(a)(34)) as amended
by section 102 of the Government Securities Act to determine
its appropriate regulatory agency.
In
a related
action
the
Treasury
Department
is
proposing rules under the Government Securities Act that, among
other
things,
requirement
establishes
for
(See proposed
certain
exemptions
classes
17 CFR Part 401.)
of
from
the
financial
In addition,
notice
institutions.
the Treasury
Department is proposing to require the filing of an amendment
to
the notice if any
inaccurate.
information contained
therein
becomes
(See proposed 17 CFR 400.5(b).)
Reference to the Forms G-FIN and G-FINW will be at
17 CFR 449.1 and 449.2.
Board of Governors
of
the
Federal
Reserve
System
February 23, 1987.
(signed) William W. Wiles
William W. Wiles
Secretary of the Board
FORM G-FIN
NOTICE BY FINANCIAL INSTITUTIONS OF
GOVERNMENT SECURITIES BROKER OR
GOVERNMENT SECURITIES DEALER ACTIVITIES
(This booklet includes instructions and blank forms)
(SEAL)
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
(SEAL)
FEDERAL DEPOSIT INSURANCE CORPORATION
(SEAL)
OFFICE OF THE COMPTROLLER OF THE CURRENCY
(SEAL)
FEDERAL HOME LOAN BANK BOARD
(SEAL)
SECURITIES AND EXCHANGE COMMISSION
N O T I C E
R E Q U I R E M E N T S
This notice must be filed by all financial institutions
that are government securities brokers or government securities
dealers that are not exempt from the notice requirement under
regulations of the Department of the Treasury. Generally, a
financial institution will not be required to file as a
government securities broker or dealer if its only government
securities activities are to:
(1) Buy or sell government
securities solely for investment for its own account; (2) Buy or
sell government securities for fiduciary accounts; (3) Handle
savings bond transactions; (4) Submit tenders for the account of
customers for purchase on original issue of U.S. Treasury
securities; (5) Enter into repurchase agreements; (6) Enter into
fewer than 500 reverse repurchase agreements in a calendar year;
(7) Effect fewer than 500 government securities brokerage
transactions per year; (8) Effect brokerage transactions only
through another government securities broker or dealer on a fully
disclosed basis; or (9) Effect brokerage transactions that do not
involve active solicitations.
FOR FURTHER INFORMATION ON THE REQUIREMENTS TO FILE THIS NOTICE,
PLEASE REFER TO THE INSTRUCTIONS.
OMB No.__
Approval
Expires
Form G-FIN
Notice of Government Securities Broker or
Government Securities Dealer Activities to be
Filed by a Financial Institution Under
Section 15C(a)(l)(B) of the
Securities Exchange Act of 1934
Appropriate regulatory agency (check one):
(
(
(
(
(
(
)
)
)
)
)
)
Comptroller of the Currency
Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Federal Home Loan Bank Board
Federal Savings and Loan Insurance Corporation
Securities and Exchange Commission
Filing status of notice (check as applicable):
( ) Notice
( ) Amendment
( ) Government Securities Broker
( ) Government Securities Dealer
(a) Full name of Financial Institution
(b) Address of principal office of Financial Institution
(c) Address of principal office where government securities
broker or government securities dealer activities will be
conducted (if different than item (b))
(d) Mailing address if different from (b) or (c)
(e) Name, title and telephone number of contact person with
respect to this notice
Name
Title
Telephone No.
Does Financial Institution conduct, or will it conduct,
government securities broker or government securities dealer
activities at any location other than that given in Question 3
above?
( ) yes
( ) no
(If yes, provide address and describe activities)
Furnish the name and title of each person who is directly engaged
in the management, direction or supervision of any of the
financial institution's government securities broker or government
securities dealer activities:
Full Name
Last
First
Middle
Title
Last
First
Middle
Title
Last
First
Middle
Title
Last
First
Middle
Title
Last
First
Middle
Title
(Note: Attach a separate Form G-FIN-4 (or, if previously filed,
a copy of Form MSD-4 or Form U-4) for each person named in
response to this Item 5).
Has any "associated person" (see definition in paragraph (A)7 of
the Instructions) responded "yes" to any question in Item 18 of
Form G-FIN-4, or "yes" to one or more questions in Items 23
through 26 of Form MSD-4 or Item 22 on Form U-4?
( ) yes
( ) no
If yes, attach a copy of G-FIN 4, Form MSD-4, or Form U-4 for all
such persons with this Notice.
(Note: The financial institution and the person executing this
form are responsible for making an inquiry of all other employers
of any associated person during the immediately preceding three
years for the purpose of verifying the accuracy of the
information furnished on Form G-FIN-4.
(See 17 CFR 400.4(c)).
Similar requirements are applicable to Form MSD-4 and Form U-4.)
-
7.
3-
The financial institution submitting the form and the person
executing it represent that all of the information contained
herein is true, current and complete.
Name (print) and title of person executing form:
First
Middle
Manual Signature
Last
Title
Date
Form G-FIN
Instructions for Completing Notice of
Government Securities Broker or Government Securities Dealer
Activities by Financial Institutions
General Information and Instructions
(A)
Terms and Abbreviations
1.
"Act" refers to the Securities Exchange Act of
1934, as amended by the Government Securities Act
of 1986.
2.
"ARA" refers to the financial institution's
appropriate regulatory agency, as defined in
section 3(a)(34)(g) of the Act.
See general
instruction (E) below for a listing of appropriate
regulatory agencies.
3.
"Government securities" are defined in section
3(a)(42) of the Act.
In general, this term refers
to direct obligations of or obligations guaranteed
as to principal or interest by the United States?
obligations of U. S. agencies which have been
appropriately designated by the Secretary of the
Treasury? securities issued or guaranteed as to
principal or interest by corporations
designated by statute to constitute exempt
securities; and puts, calls, straddles or options
on such securities. Although not all inclusive,
the following are the more common types of
government securities covered by the term: U.S.
Treasury bills, bonds, notes? discount notes,
bonds, certain collateralized mortgage
obligations, pass throughs, master notes, and
other obligations of the Government National
Mortgage Association (GNMA), Federal National
Mortgage Association (FNMA), Federal Home Loan
Mortgage Corporation (FHLMC), Student Loan
Marketing Association (SLMA), Federal Home Loan
Banks and Farm Credit Banks? securitized Small
Business Association (SBA) loans? and FNMA stock.
4.
"Government securities broker" is defined in
section 3(a)(43) of the Act. In general, this
term refers to a financial institution that is
regularly engaged in the business of effecting
transactions in government securities for the
account of others.
2
5.
"Government securities dealer" is defined in
section 3(a)(44) of the Act.
In general, this
term refers to a financial institution engaged in
the business of buying and selling securities for
its own account but does not include a financial
institution insofar as it buys or sells securities
for its own account but not as a part of its
regular business, or in a fiduciary capacity.
6.
"Financial institution" is defined in Section 3(a)
(46) of the Act.
In general, the term refers to
any national or State chartered bank or trust
company which is supervised and examined by a
State or Federal bank supervisory agency, a
foreign bank, and any other institution whose
deposits are insured by the Federal Savings and
Loan Insurance corporation.
7.
"Associated person" is defined by Treasury
regulation (17 CFR 400.4(e)(1)(i)) to mean a
person directly engaged in any of the following
activities in either a supervisory or
non-supervisory capacity: underwriting, trading
or sales of government securities; financial
advisory or consultant services for issuers in
connection with the issuance of government
securities; or research or investment advice,
other than general economic information or advice,
with respect to government securities in
connection with the activities described above.
The term is further defined in Section
400.4(e)(1)(ii) to cover persons engaged in the
following activities in a supervisory capacity:
processing and clearance activities with respect
to government securities; and maintenance of
records involving any of the activities described
in this paragraph.
This definition does not include directors and
senior officers of the financial institution who
may from time to time set broad policy guidelines
affecting the financial institution as a whole,
but are not directly involved in the conduct of
the financial institution's government securities
business on a day-to-day basis.
It also does not
cover persons whose functions are solely clerical
or ministerial.
(B)
Who must file? Under section 15C (a)(1)(B) of the Act,
any financial institution that is a government
securities broker or government securities dealer
within the foregoing definitions must file with its ARA
3
a written notice, on the form prescribed herein, except
as described below.
A financial institution that buys and sells
securities solely for investment for its own account or
for accounts for which it acts as a fiduciary will not
generally be classified as a dealer, even though such
purchases and sales are made with some frequency.
Virtually every financial institution purchases
government securities for investment; and purchases and
sales may occur to accommodate changes in the financial
institution's financial position or to reflect
investment decisions. The legislative history of the
Act indicates that Congress did not intend to require
financial institutions engaged in such investment-type
activity to register as dealers.
The Department of the Treasury is proposing to
exempt financial institutions that engage solely in the
following activities:
(1) Acting as issuing agent, payment agent
or forwarding agent for U.S. Savings Bonds;
(2) submission of tenders for the account of
customers for purchase on original issue of U.S.
Treasury securities;
(3) sales subject to repurchase of
government securities (repurchase agreement);
(4) purchases subject to resale of
government securities (reverse repurchase
agreement), provided they do not exceed 500
transactions in any calendar year.
In general, government securities activities that
may bring a financial institution within the definition
of government securities dealer include the following:
(1) underwriting or participating in a selling group
for the sale of government securities; (2) advertising
or otherwise holding itself out to other dealers or
investors as a dealer in government securities; or (3)
quoting a market for government securities and in
connection with such quotations, standing ready to
purchase or sell government securities.
The Department of the Treasury also has proposed
to exempt any financial institution from the definition
of government securities broker unless it
(1) holds itself out as a government
securities broker or interdealer broker; or
(2) actively solicits individual purchases
or sales of government securities on an agency
basis.
In addition, a financial institution will be
exempt if it (a) effects less than 500 brokerage
transactions per year or (b) except for U.S. Savings
4
Bonds and submissions of tenders for U.S. Treasury
securities (as described above), effects all brokerage
transactions through a government securities broker or
dealer who is clearly identified as the entity
providing the brokerage services, who confirms such
transactions directly to the customer and who meets the
other conditions of the exemption.
(C)
When to file. A financial institution that is acting
as a government securities broker or government
securities dealer on July 25, 1987 must file a notice
with its ARA on or before that date and any financial
institution that proposes to act as a government
securities broker or government securities dealer after
that date shall file the notice before it commences
operations.
(D)
Amendments.
In the event any of the information
previously submitted on this notice becomes incomplete,
inaccurate or no longer applicable, the notice must be
amended. This amendment must be filed within 30
calendar days of its becoming inaccurate.
Items 1, 2, 3 and 7 of the notice shall be completed
for each amendment. Otherwise, only those items which
are being amended need to be completed.
(E)
How and where to file: Number of copies. Each
financial institution must file two copies of the
notice and each amendment with its ARA, one of which
will be sent by the ARA to the SEC. A financial
institution may determine the name and address of its
ARA from the following:
1.
A national bank, a bank operating in the District
of Columbia that is examined by the Comptroller of
the Currency, or a Federal branch or Federal
agency of a foreign bank, files with the:
Office of the Comptroller of the Currency
Administrator of National Banks
Division of Investment Securities
Washington, D.C. 20219
2.
A State member bank of the Federal Reserve System,
a foreign bank, a State branch or a State agency
of a foreign bank, or a commercial lending company
owned or controlled by a foreign bank, files with
the:
Board of Governors of the
Federal Reserve System
5
Division of Banking Supervision & Regulation
Securities Regulation Section
Washington, D.C. 20551
3.
A bank insured by the Federal Deposit Insurance
Corporation (other than a bank which is a member
of the Federal Reserve System or a Federal savings
bank) files with the:
Federal Deposit Insurance Corporation
Securities Analysis Unit
Washington, D.C. 20429
4.
A Federal savings and loan association, District
of Columbia savings and loan association, Federal
savings bank, or an institution insured by the
Federal Savings and Loan Insurance Corporation,
files with the:
Federal Home Loan Bank Board
Office of the General Counsel
Corporate and Securities Division
1700 G Street, N.W.
Washington, D.C. 20552
5.
A State chartered bank or a State chartered trust
company, whose deposits are not insured by the
Federal Deposit Insurance Corporation or any other
financial institution not described in the
preceding paragraphs files with the:
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
(F)
Privacy Act Notice: Collection of the information to
be supplied on this form is authorized by section
15.C(a)(1)(B) of the Securities Exchange Act of 1934,
15 U.S.C. 78o-5(a)(1)(B). Disclosure is mandatory for
all financial institutions that act as government
securities brokers or government securities dealers
that are not exempted from filing under Treasury
Department regulations (see 17 C.F.R. Part 401). The
principal purpose of this notice is to identify to the
appropriate regulatory agencies those financial
institutions that act as government securities brokers
or government securities dealers and are subject to
regulation under the Act.
Information supplied on this
form will be included routinely in the public files of
the appropriate regulatory agencies and will be
available for inspection by any interested person.
In
addition, the Securities and Exchange Commission will
6
maintain copies of all G-FIN notices in the public
files, and will make them available for public
inspection by any interested person. Financial
institutions that do not disclose the information
solicited on this form may not lawfully act as
government securities brokers or government securities
dealers unless exempt from the notice requirement by
Treasury Department regulation (17 C.F.R. Part 401).
FORM G—FIN—W
NOTICE BY FINANCIAL INSTITUTIONS OF
TERMINATION OF ACTIVITIES AS A
GOVERNMENT SECURITIES BROKER OR
GOVERNMENT SECURITIES DEALER
(This booklet includes instructions and blank forms)
(SEAL)
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
(SEAL)
FEDERAL DEPOSIT INSURANCE CORPORATION
(SEAL)
OFFICE OF THE COMPTROLLER OF THE CURRENCY
(SEAL)
FEDERAL HOME LOAN BANK BOARD
(SEAL)
SECURITIES AND EXCHANGE COMMISSION
OMB No.__
Approval
Expires
FORM G-FIN—W
NOTICE BY FINANCIAL INSTITUTIONS OF
TERMINATION OF ACTIVITIES AS A
GOVERNMENT SECURITIES BROKER OR
GOVERNMENT SECURITIES DEALER
Appropriate regulatory agency (check one):
{
C
C
{
(
)
3
}
}
3
Board of Governors of the Federal Reserve System
Comptroller of the Currency
Federal Deposit Insurance Corporation
Federal Home Loan Bank Board
Securities and Exchange Commission
(a) Full name of Financial Institution
(b) Address of principal office of Financial Institution
(c) Mailing address if different from (b).
Furnish the name and address of the person who has or will have
custody or possession of the financial institutions books and
records with respect to the financial institution's activities as
a government securities broker or government securities dealer:
Furnish the address of the place where such books and records
will be located:
5.
The financial institution submitting this notice of termination
of activities and the person executing it represent that all of
the information contained herein is true, current and complete.
Name (print) and title of person executing form:
First
Middle
Last
Manual Signature
(Official responsible for Form)
Title
Print name and title of
Official responsible for Form
Date:
GENERAL INSTRUCTIONS
FORM G-FIN-W
TERMINATION OF ACTIVITIES AS A
GOVERNMENT SECURITIES BROKER OR
GOVERNMENT SECURITIES DEALER
1.
When to file. A financial institution that has filed a
Notice of Government Securities Broker or Government
Securities Dealer Activities pursuant to section
15C. (a) (1) (B) of the Securities Exchange Act of 1934 must
file this notice with its appropriate regulatory agency
(ARA) when the financial institution ceases to act as a
government securities broker or government securities
dealer.
A notice to terminate activities as a Government Securities
Broker or Government Securities Dealer shall become
effective for all matters on the 60th day after filing this
notice unless the financial institution is otherwise
notified by its ARA.
2.
How and where to file: Number of copies. Each financial
institution must file two copies of the notice with its ARA,
one of which will be sent by the ARA to the SEC. Both
copies of this Form filed with the ARA shall be executed
with a manual signature in Item 5. The Form shall be signed
in the name of the financial institution by a principal
officer who was directly engaged in the management,
direction, or supervision of the financial institution's
government securities broker or dealer activities.
@FedFRASER