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FEDERAL RESERVE BAMiC
OF MEW YORK
[
Circular No. 10157 1
March 2, 1987
PROPOSED FORM OF NOTICE BY FINANCIAL INSTITUTIONS REGARDING
GOVERNMENT SECURITIES BROKER OR DEALER ACTIVITIES
Comment Invited by March 27
To All Depository Institutions, in the Second
Federal Reserve District and Others Concerned:
Following is the text of a statement issued by the Board of Governors of the Federal Reserve
System:
The Federal Reserve Board has 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 broker-dealer activities. Institutions that currently act as brokerdealers must file the notice by 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.
Printed on the reverse side is the text of the Board’s notice in this m atter, which has been re
printed from the Federal Register of February 25, 1987.
Enclosed — for depository institutions in this District — is a copy of the sample forms and
instructions that institutions will use to notify their Federal regulators of their activities as securities
brokers or dealers; copies of the forms will be furnished to others upon request directed to the Circu
lars Division of this Bank (Tel. No. 212-720-5215 or 5216).
Comments on the proposal may be sent to the Board of Governors, as specified in the notice, or
to our M ultinational Banking Department, by M arch 27, 1987. Questions on this matter should be
directed to Gerald P. Minehan, Assistant Chief Examiner (Tel. No. 212-720-5881).
In a related action, the Treasury Department has published for comment proposed rules that,
among other things, establish exemptions from the notice requirements for certain classes of finan
cial institutions. A copy of those proposed regulations, as published in the Federal Register of
February 25, 1987, will be sent to you shortly.
E. G e r a l d C o r r ig a n ,
President.
(OVER)
r__
v
FEDERAL RESERVE SYSTEM
[Docket No. K“05®S]
Financial Institutions Actio® a@
<S®Y®mm<sint S@©yrStS@§ Brokers @r
<S®v®rin)m©Fit Securities D©®l®r@
A©£N€Y: Board of Governors of the
Federal Reserve System.
action: Notice.
SUMMARY: Under section 150(a)(1)(B) of
the Securities Exchange Act of 1934,15
U.S.C. 78o-5(a)(l)(B), as amended by the
Government Securities Act of 1986 (Pub.
L. 99-571), all financial institutions that
act as government securities brokers or
government securities dealers must
notify their designated federal
supervisory agencies of their broker/
dealer activities, unless exempted from
the notice requirement by Treasury
Department regulation. The Board of
Governors has the responsibility 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. In discharging these
responsibilities, the Board 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).
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). Copies of the
proposed forms and supporting
documents are available from the Board
clearance officer listed below.
©AYES; Comments must be received by
March 27,1987.
ADDRESSES: Comments, which should
refer to Docket No. R-0590, should be
sent to Mr. William W. Wiles, Secretary,
Board of Governors of the Federal
Reserve System, Washington, DC 20551.
Comments may also be sent to Mr.
Robert Neal, Desk Officer, Office of
Information and Regulatory Affairs,
Office of Management and Budget, New
Executive Office Building, Room 3208,
Washington, DC 20503.
FURTHEfHNFORRSAYfON ©©KlTACTn
Robert S. Plotkin, Assistant Director
(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), Eamestine Hill or
Dorothea Thompson, Board of
Governors of the Federl Reserve System.
Federal Reserve Paperwork Clearance
Officer: Nancy Steele, Division of
Research and Statistics (202-452-3822).
Interested parties may also contact the
OMB Desk Officer, Robert Neal (202395-8880).
SO»UiM£[tf?AE?Y INFORMATION: The
Board is proposing to prescribe forms
G-FIN and G-FINW as the vehicles for
financial institutions to submit the
notices of status as government
securities brokers and government
securities dealers required by the
Government Securities Act of 1986,15
U.S.C. 78o-5(a)(l)(B). All financial
institutions (generally federal and state
chartered commercial banks, foreign
banks, savings banks, and savings and
loan associations, but not credit unions)
that act or cease to act as government
securities brokers or government
securities dealers are required by
section 78o-5(a)(l)(B) to file these
notices with 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
securities dealers and not otherwise
exempt must file a notice on Form GFIN by July 25,1987. Financial
institutions that intend to engage in
these activities after that date must file
a notice prior to commencement of these
operations.
In general, the appropriate regulatory
agency for national banks is the
Comptroller of the Currency; 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
institutions, the Securities and Exchange
Commission. 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, establishes exemptions
from the notice requirement for certain
classes of financial institutions. (See
proposed 17 CFR Part 401.) In addition,
the Treasury Department is proposing to
require the filing of an amendment to the
notice if any information contained
therein becomes inaccurate. (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 Governor of the Federal Reserve
System February 23,1987.
William W. Wiles,
Secretary of the Board.
[FR Doc. 87-4043 Filed 2-24-87; 8:45 am]
BILLING CODE S210-01-K1
PROPOSED
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 2
C1D Buy or sell government
securities solely for investment for its o m accounti (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 0S 0 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 solicitations0
FOR FURTHER INFORMATION ON THE REQUIREMENTS TO FILE THIS NOTICE,
PLEASE REFER TO THE INSTRUCTIONS„
[Enc. Cir. No. 10157]
F 0R „
OMB NOo
Approval
Expires
Form G-FIN
Malice 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
L
Appropriate regulatory agency
(
(
(
(
(
(
2o
)
)
)
)
)
)
(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)s
( ) Government Securities Broker
( ) Government Securities Dealer
3.
( ) Notice
( ) Amendment
(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) N a m e f title and telephone number of contact person with
respect to this notice
Name
Title
Telephone N o c
= 2“
4o
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)
5o
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 activitiess
Full Name
Last
First
Middle
Title
Last
First
Middle
Title
Last
First
Middle
Title
Last
First
Middle
Title
Last
First
Middle
Title
(Motes Attach a separate Form G-FIN-4 for, if previously filed,
a copy of Form MSB-4 or Form U-4) for each person named in
response to this Item 5)„
6o
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 MSB-4, or Form U-4 for all
such persons with this Notice„
([Motes 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-4e (See 17 CFR 400o4(c))o
Similar requirements are applicable to Form MSB-4 and Form U-4o)
7o
The financial institution submitting the form and the person
executing it represent that all of the information contained
herein is true* current and complete0
Name
(print) and title of person executing forms
First
Middle
Manual Signature
Title
Last
Date
Form G-FXB
Instructions for Completing Motice of
Government Securities Broker or Government Securities Dealer
Activities by Financial Institutions
General Information and Instructions
(A)
Terms and Abbreviations
"Act81 refers to the Securities Exchange Act of
1934* as amended by the Government Securities Act
of 1986 o
2o
88A R A 08 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.
3o
81Government securities88 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 0 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;
UoSo
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.
4o
"Government securities broker88 is defined in
section 3( a ) (43) of the Acto
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 othersQ
2
5o
"Government securities dealer’5 is defined in
section 3(a)(44) of the A c t 0 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 Acto
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 400o4(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 paragrapho
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 ministerialc
(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 belowB
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 UoS„ Savings Bonds?
(2)
submission of tenders for the account of
customers for purchase on original issue of UoS=
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 o
In addition, a financial institution will be
exempt if it (a) effects less than 500 brokerage
transactions per year or (b) except for U„So 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.
2,
Items 1,
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 files 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 followings
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 thes
Office of the Comptroller of the Currency
Administrator of National Banks
Division of Investment Securities
Washington D 0C 0 20219
g
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 s
Board of Governors of the
Federal Reserve System
5
Division of Banking Supervision & Regulation
Securities Regulation Section
Washington* D 0C 0 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 thes
Federal Deposit Insurance Corporation
Securities Analysis Unit
Washington* D 0C 0 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 t h e ;
Federal Home Loan Bank Board
Office of the General Counsel
Corporate and Securities Division
1700 G Street* M SW.
Washington* D 0C 0 20552
5o
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 t h e :
Securities and Exchange Commission
450 Fifth Street* M 0W 0
Washington* 0oCo 20549
(F)
Privacy Act Motlees
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=Co 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 CoFoR* 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 Acte
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 0F 0R 0 Part 401).
PROPOSED
FORM G-FXM-M
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 AMD EXCHANGE COMMISSION
F 0Re G-FIN-W
OMB N o „
Approval
Expires
FORM G-FIN-W
NOTICE BY F I I M C I I L INSTITUTIONS OF
TERMINATION OF ACTIVITIES AS A
GOVERNMENT SECURITIES BROKER OR
GOVERNMENT SECURITIES DEALER
1„
Appropriate regulatory agency
{
{
{
C
{
20
}
3
}
3
}
(check one)s
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)3
3.
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 institution0s activities as
a government securities broker or government securities dealers
4o
Furnish the address of the place where such books and records
will be located?
5o
The financial institution submitting this notice of termination
of activities and the person executing it represent that all of
the information contained herein is truef current and complete„
Name
(print) and title of person executing forms
First
Middle
Last
Manual Signature
(Official responsible for Form)
Title
Print name and title of
Official responsible for Form
Date s
GENERAL i n s t r u c t i o n s
FORM G-FXN-W
TERMINATION OF ACTX¥XTXRS AS A
GO¥ERNMENT SECURITIES BROKER OR
GQWRNMEMT SECURITIES DEALER
lo
l^heza to file0 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 A R A 0
2o
M©^ snad ^rhere to files Nraaber of <c©pies0 Each financial
institution must file two copies of the notice with its ARA*
one of which will be sent by the ARA to the SECo
Both
copies of this Form filed with the ARA shall be executed
with a manual signature in Item 5 C 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