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FEDERAL RESERVE BANK O F NEW YORK [ Circular No. 8 2 9 8 - 1 March 21, 1978 J AMENDMENT TO REGULATION Y Filing Requirements for Bank Holding Companies that Conduct Municipal SecuritiesDealer Activities To A ll Bank Holding Companies, and Others Concerned, in the Second Federal Reserve District: The Board of Governors of the Federal Reserve System has amended its Regulation Y to require bank holding companies that have been authorized by the Board to conduct municipal securities dealer activities to file with the Board infor mation about persons who are associated with them as municipal securities principals or municipal securities representatives. Form MSD-4, “Uniform Application for Municipal Securities Principal or Municipal Securities Representative Associated with a Bank Municipal Securities Dealer,” and Form MSD-5, “Uniform Termina tion Notice for Municipal Securities Principal or Municipal Securities Representa tive Associated with a Bank Municipal Securities Dealer,” for use in complying with the filing requirements, may be obtained from this Bank, upon request directed to our Regulations Division (Tel. No. 212-791-5914). The requirements become effective April 5, 1978. Enclosed is a copy of the amendment. Any questions regarding this matter may be directed to the Regulations Division. P aul A. V olcker, President. Board of Governors of the Federal Reserve System BANK HOLDING COMPANIES AM ENDM ENT TO REGULATION Y ( effective A p ril 5,1978) Title 12— Banks and Banking CHAPTER B— FEDERAL RESERVE SYSTEM SU9CHAFTW A— tOAJtD O f OOVCRNOtS O f THE FEDERAL RESERVE SYSTEM [Docket No. R-0090; Reg. Y] PART 225— BANK HOLDING COMPANIES Municipal Securities Dealers AGENCY: Board of Governors of the Federal Reserve System. ACTION: Final rule. SUMMARY: This rule requires bank holding companies which have been authorized by the Board to conduct municipal securities dealer activities and for which the Board is designated in the Securities Exchange Act of 1934 as the appropriate regulatory agency to file with the Board Information about persons who are associated with them as municipal securities principals or municipal securities representa tives. These requirements will facili tate compliance by those dealers with Municipal Securities Rulemaking Board rules concerning the qualifica tion of municipal securities principals and municipal securities representa tives. EFFECTIVE DATE: April 5, 1978. FOR FURTHER INFORMATION CONTACT: Robert S. Plotkin, Assistant Direc tor, Division of Banking Supervision and Regulation, Board of Governors of the Federal Reserve System, Washington, D.C. 20551, 202-4522782. SUPPLEMENTARY INFORMATION: On March 30, 1977, the Board issued for comment in the F ederal R egister (42 FR 16821) proposed amendments to its Regulation H (12 CFR Part 208) and Regulation Y (12 CFR Part 225) to require State member banks and bank holding companies and certain of their subsidiaries, departments, and di visions, that are municipal securities dealers for which the Board is the ap propriate regulatory agency under sec tion 3(a)(34) of the Securities Ex- change Act of 1934 (15 U43.C. 78c(a)(34)) to file with the Board in formation about persons who are asso ciated with them as municipal securi ties principals or municipal securities representatives. In conjunction with that proposal, the Board also proposed Form MSD—4, “Uniform Application for Municipal Securities Principal or Municipal Securities Representative Associated with a Bank Municipal Se curities Dealer,” and Form M S D -5, "Uniform Termination Notice for Mu nicipal Securities Principal or Munici pal Securities Representative Associat ed with a Bank Municipal Securities Dealer,” for use in complying with the proposed amendments to Regulations H and Y. Concurrent with the Board’s propos al of amendments to Regulations H and Y, the Federal Deposit Insurance Corporation and the Comptroller of the Currency proposed similar regula tions requiring the filing of proposed Forms M8D-4 and MSD-5. Proposed Form MSD-4 and proposed Form MSD-5 were drafted Jointly by the Board, the Federal Deposit Insurance Corporation, and the Comptroller of the Currency for use by municipal se curities dealers subject to their regula tion. After considering the comments submitted on the proposed amend ments to Regulations H and Y and proposed Forms MSD-4 and MSD-5, the Board, on September 1, 1977, adopted Regulation H and form sub stantially as proposed. At that time, the Board decided to defer adoption of the proposed amendment to Regula tion Y in view of its action of October 19, 1976 deferring action on applica tions filed under section 4<cX8) of the Bank Holding Company Act for au thority to underwrite and deal in Fed eral government and municipal securi ties. On January 26, 1978, the Board an nounced that it would resume process ing of applications from bank holding companies to engage in Federal gov ernment and municipal security dealer activities on a case-by-case basis. Therefore, this amendment to Regula tion Y will extend to bank holding companies and certain of their subsid iaries the filing requirements that are now imposed on State member banks with respect to municipal securities dealer activities. Pursuant to sections 15B(c) (5), 17, and 23 of the Securities Exchange Act of 1934 (15 U.S.C. 780-4(cX5). 78q, and 78w), the Board amends its Regulation Y (12 CFR 225) by adding a new para graph (f) to $ 225.5 as set forth below: SECTION 225.5—ADMINISTRATION * * * (f) B a n k h o ld in g c o m p a n ie s , c e r ta i n o f t h e i r s u b s id i a r i e s , a n d s u b s id ia r ie s , d e p a r t m e n t s o r d i v i s i o n s o f s u c h sub sidiaries, w h ic h a r e m u n i c i p a l s e c u r i t ie s d e a le rs . (1) For purposes of this paragraph, the terms tvgrein have the meanings given them in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) and the rules of the Municipal Securities Rulemaking Board. The term Act shall mean the Securities Exchange Act of 1934 (15 UJS.C. 78a et seq.). (2) A bank holding company, or a subsidiary of a bank holding company which is a bank (other than a national bank or a bank operating under the Code of Law for the District of Colum bia or a bank Insured by the Federal Deposit Insurance Corporation), or a subsidiary or a department or a divi sion of such a subsidiary, which is a municipal securities dealer shall not permit a person to be associated with it as a municipal securities principal or municipal securities representative unless it has filed with the Board an original and two copies of Form MSD4, "Uniform Application for Municipal Securities Principal or Municipal Se curities Representative Associated with a Bank Municipal Securities Dealer," completed in accordance with the instructions contained therein, for that person. Form MSD-4 is pre scribed by the Board for purposes of paragraph (b) of Municipal Securities Rulemaking Board rule G-7, "Infor mation Concerning Associated Per sons.” (3) Whenever a municipal securities dealer receives a statement pursuant to paragraph (c) of Municipal Securi ties Rulemaking Board Rule G-7, "In formation Concerning Associated Per sons,” from a person for whom it has filed a Form MSD-4 with the Board pursuant to subparagraph (2) of this paragraph, such dealer shall, within ten days thereafter, file three copies of that statement with the Board ac- For this Regulation to be complete, retain: 1) Regulation Y pamphlet, as amended effective June 24, 1974. 2) Corrective amendments effective June 24, 1974. 3) Amendments effective December 1, 1975; May 15, 1976; October 13, 1976; October 3, 1977; and December 31, 1977. 4) This slip sheet. P R IN T E D IN N EW YOR K , FROM FEDERAL REGISTER , VOL. 43, NO. 49 [Enc. Cir. No. 8298] ( over) companled by an original and two Dealer,” completed in accordance with copies of a transmittal letter which in the instructions contained therein. cludes the name of the dealer and a (5) A municipal securities dealer reference to the material transmitted which files a Form MSD-4, Form identifying the person Involved and is MSD-8, or statement with the Board signed by a municipal securities princi under this paragraph shall retain a pal associated with the dealer. copy of each such Form MSD-4, Form (4) Within thirty days after the ter MSD-5 or statement until at least mination of the association of a mu three years after the termination of nicipal securities principal or munici the employment or other association pal securities representative with a with such dealer of the municipal se municipal securities dealer which has curities principal or municipal securi filed a Form MSD-4 with the Board ties representative to whom the form for that person pursuant to subpara or statement relates. graph (2) of this paragraph, such (6) The date that the Board receives dealer shall file an original and two a Form MSD-4, Form MSD-5, or state copies of a notification of termination ment filed with the Board under this with the Board on Form MSD-5, "Uni paragraph shall be the date of filing. form Termination Notice for Munici Such a Form MSD-4, Form MSD-5, or pal Securities Principal or Municipal statement which is not prepared and Securities Representative Associated executed in accordance with the appli with a Bank Municipal Securities cable requirements may be returned as unacceptable for filing. Acceptance for filing shall not constitute any finding that a Form MSD-4, Form MSD-5, or statement has been completed in ac cordance with the applicable require ments or that any information report ed therein is true, current, complete, or not misleading. Every Form MSD-4, Form MSD-5, or statement filed with the Board under this paragraph shall constitute a filing with the Securities and Exchange Commission for pur poses of section 17(cKl) of the Act (15 U.S.C. section 78q(cXl> and a "report,” "application,” or "docu ment” within the meaning of section 32(a) of the Act (15 U.S.C. 78ff(a)). By order of the Board of Governors, March 6.1978. T hxodohb E. A ixisoa, S e c r e ta r y o f th e B o a r d . [FR Doc. 78-6463 Filed 3-10-78; 8:46 ami
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