[Federal Register Volume 78, Number 171 (Wednesday, September 4, 2013)]
[Proposed Rules]
[Pages 54403-54412]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-21357]
-----------------------------------------------------------------------
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Parts 344 and 390
RIN 3064- AE06
Removal of Transferred OTS Regulations Regarding Recordkeeping
and Confirmation Requirements for Securities Transactions Effected by
State Savings Associations and Other Amendments
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: In this notice of proposed rulemaking, the Federal Deposit
Insurance Corporation (``FDIC'') proposes to rescind and remove from
the Code of Federal Regulations 12 CFR part 390, subpart K (``part 390,
subpart K''), entitled ``Recordkeeping and Confirmation Requirements
for Securities Transactions.'' This subpart was included in the
regulations that were transferred to the FDIC from the Office of Thrift
Supervision (``OTS'') on July 21, 2011, in connection with the
implementation of applicable provisions of Title III of the Dodd-Frank
Wall Street Reform and Consumer Protection Act (``Dodd-Frank Act'').
With few exceptions addressed below, the requirements for State savings
associations in part 390, subpart K, are substantively similar to those
in FDIC's 12 CFR part 344 (``part 344''), which also is entitled
``Recordkeeping and Confirmation Requirements for
[[Page 54404]]
Securities Transactions'' and is applicable to State nonmember insured
banks and foreign banks having an insured branch.
The FDIC proposes to amend the definition section of part 344 to
clarifying that part 344 applies to all insured depository
institutions, including State savings associations, for which the FDIC
is the appropriate Federal banking agency. The FDIC also proposes to
amend part 344 to increase the number of transactions that all FDIC-
supervised institutions may effect on behalf of customers under the
small transaction exception from certain of the recordkeeping
requirements (``Small Transaction Exception'').
Upon removal of part 390, subpart K, and with the proposed changes
to part 344, the recordkeeping and confirmation requirements for
securities transactions for customers effected by all insured
depository institutions for which the FDIC has been designated the
appropriate federal banking agency will be found at part 344.
DATES: Comments must be received on or before November 4, 2013.
ADDRESSES: You may submit comments by any of the following methods:
FDIC Web site: http://www.fdic.gov/regulations/laws/federal/propose.html. Follow instructions for submitting comments on
the agency Web site.
FDIC Email: [email protected]. Include RIN 3064-
AD82 on the subject line of the message.
FDIC Mail: Robert E. Feldman, Executive Secretary,
Attention: Comments, Federal Deposit Insurance Corporation, 550 17th
Street NW., Washington, DC 20429.
Hand Delivery to FDIC: Comments may be hand-delivered to
the guard station at the rear of the 550 17th Street Building (located
on F Street) on business days between 7 a.m. and 5 p.m.
Please include your name, affiliation, address, email address, and
telephone number(s) in your comment. Where appropriate, comments should
include a short Executive Summary consisting of no more than five
single-spaced pages. All statements received, including attachments and
other supporting materials, are part of the public record and are
subject to public disclosure. You should submit only information that
you wish to make publicly available.
Please note: All comments received will be posted generally
without change to http://www.fdic.gov/regulations/laws/federal/propose.html, including any personal information provided. Paper
copies of public comments may be requested from the Public
Information Center by telephone at 1-877-275-3342 or 1-703-562-2200.
FOR FURTHER INFORMATION CONTACT: Anthony J. DiMilo, Examination
Specialist, Trust, Division of Risk Management Supervision, (202) 898-
7496; John M. Jackwood, Senior Policy Analyst, Division of Depositor
and Consumer Protection, (202) 898-3991; Julia E. Paris, Counsel, Legal
Division, (202) 898-3821.
SUPPLEMENTARY INFORMATION:
I. Background
The Dodd-Frank Act
The Dodd-Frank Act \1\ provided for a substantial reorganization of
the regulation of State and Federal savings associations and their
holding companies. Beginning July 21, 2011, the transfer date
established by section 311 of the Dodd-Frank Act, codified at 12 U.S.C.
5411, the powers, duties, and functions formerly performed by the OTS
were divided among the FDIC, as to State savings associations, the
Office of the Comptroller of the Currency (``OCC''), as to Federal
savings associations, and the Board of Governors of the Federal Reserve
System (``FRB''), as to savings and loan holding companies. Section
316(b) of the Dodd-Frank Act, codified at 12 U.S.C. 5414(b), provides
the manner of treatment for all orders, resolutions, determinations,
regulations, and advisory materials that had been issued, made,
prescribed, or allowed to become effective by the OTS. The section
provides that if such materials were in effect on the day before the
transfer date, they continue in effect and are enforceable by or
against the appropriate successor agency until they are modified,
terminated, set aside, or superseded in accordance with applicable law
by such successor agency, by any court of competent jurisdiction, or by
operation of law.
---------------------------------------------------------------------------
\1\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, 12 U.S.C. 5301 et seq.
---------------------------------------------------------------------------
Section 316(c) of the Dodd-Frank Act, codified at 12 U.S.C.
5414(c), further directed the FDIC and the OCC to consult with one
another and to publish a list of the continued OTS regulations which
would be enforced by the FDIC and the OCC, respectively. On June 14,
2011, the FDIC's Board of Directors approved a ``List of OTS
Regulations to be Enforced by the OCC and the FDIC Pursuant to the
Dodd-Frank Wall Street Reform and Consumer Protection Act.'' This list
was published by the FDIC and the OCC as a Joint Notice in the Federal
Register on July 6, 2011.\2\
---------------------------------------------------------------------------
\2\ 76 FR 39247 (July 6, 2011).
---------------------------------------------------------------------------
Although section 312(b)(2)(B)(i)(II) of the Dodd-Frank Act,
codified at 12 U.S.C. 5412(b)(2)(B)(i)(II), granted the OCC rulemaking
authority relating to both State and Federal savings associations,
nothing in the Dodd-Frank Act affected the FDIC's existing authority to
issue regulations under the FDI Act and other laws as the ``appropriate
Federal banking agency'' or under similar statutory terminology.
Section 312(c) of the Dodd-Frank Act amended the definition of
``appropriate Federal banking agency'' contained in section 3(q) of the
FDI Act, 12 U.S.C. 1813(q), to add State savings associations to the
list of entities for which the FDIC is designated as the ``appropriate
Federal banking agency.'' As a result, when the FDIC acts as the
designated ``appropriate Federal banking agency'' (or under similar
terminology) for State savings associations, as it does here, the FDIC
is authorized to issue, modify and rescind regulations involving such
associations, as well as for State nonmember banks and insured branches
of foreign banks.
As noted, on June 14, 2011, operating pursuant to this authority,
the FDIC's Board of Directors reissued and redesignated certain
transferring regulations of the former OTS. These transferred OTS
regulations were published as new FDIC regulations in the Federal
Register on August 5, 2011.\3\ When it republished the transferred OTS
regulations as new FDIC regulations, the FDIC specifically noted that
its staff would evaluate the transferred OTS rules and might later
recommend incorporating the transferred OTS regulations into other FDIC
rules, amending them, or rescinding them, as appropriate.
---------------------------------------------------------------------------
\3\ 76 FR 47652 (Aug. 5, 2011).
---------------------------------------------------------------------------
One of the OTS's rules transferred to the FDIC governs
recordkeeping and confirmation requirements for securities transactions
effected for customers by State savings associations. The OTS's rule,
formerly found at 12 CFR part 551, was transferred to the FDIC with
only nomenclature changes and is now found in the FDIC's rules at part
390, subpart K, entitled Recordkeeping and Confirmation Requirements
for Securities Transactions. Before the transfer of the OTS rules and
continuing today, the FDIC's rules contained part 344, entitled
Recordkeeping and Confirmation Requirements for Securities
Transactions, a rule governing recordkeeping and confirmation
requirements for securities transactions effected for customers by
State nonmember insured banks and insured branches of foreign banks.
After careful review and comparison of part 390, subpart K, and part
344, the FDIC
[[Page 54405]]
proposes to rescind part 390, subpart K, because, as discussed below,
it is substantively redundant to existing part 344.
Further to clarify that part 344 applies to all insured depository
institutions for which the FDIC has been designated the appropriate
Federal banking agency, the FDIC proposes to amend section 344.3 of
part 344 to remove the definition of ``bank'' and add the definition of
``FDIC-supervised institution'' to the list of defined words. This term
and its plural form would replace ``bank,'' ``banks,'' ``state
nonmember insured bank (except a District bank)'' and ``foreign bank
having an insured branch'' throughout part 344. The FDIC also proposes
to amend section 344.2(a)(1) of part 344 to increase the threshold,
from 200 transactions to 500 transactions, for the Small Transaction
Exception from certain of the provisions of part 344 related to
maintaining account records, order tickets, and broker-dealer records,
and written securities trading policies and procedures.
FDIC's Existing 12 CFR Part 344
In response to recommendations contained in the Final Report of the
Securities and Exchange Commission on Bank Securities Activities (June
1977), the FDIC in 1979 adopted part 344 to require banks under its
jurisdiction to establish uniform procedures for recordkeeping and
confirmation requirements with respect to effecting securities
transactions for customers.\4\ The purpose of part 344 was two-fold:
(1) To ensure that bank customers purchasing securities received
adequate information regarding the transaction, and (2) to ensure that
the banks maintain adequate records and controls with respect to
securities transactions. The FDIC patterned part 344 off of then-
existing Securities and Exchange Commission (``SEC'') rules applicable
to broker-dealers. At the same time, the FRB and OCC adopted
regulations, respectively, substantially similar as part 344 with one
minor qualification.\5\ The only difference among the FDIC's, FRB's and
OCC's (collectively, the ``Agencies'') original final rules was that
the OCC included a provision permitting the Comptroller of the Currency
to waive any recordkeeping and confirmation requirements in appropriate
circumstance.\6\
---------------------------------------------------------------------------
\4\ 44 FR 43260, 43261 (July 24, 1979).
\5\ See 44 FR 43252 (July 24, 1979) (OCC's rule); 44 FR 43256
(July 24, 1979) (FRB's rule).
\6\ 44 FR 43256.
---------------------------------------------------------------------------
As noted, the Agencies' rules otherwise were substantively similar.
For example, each of the Agencies included a Small Transaction
Exception, which is an exception from certain requirements related to
maintaining account records, order tickets, and broker/dealer records,
and written securities trading policies and procedures for banks having
an average of fewer than 200 securities transactions for customers per
calendar year over the prior three calendar year period. This exception
was promulgated in response to public comment during the Agencies'
respective rulemaking processes and is ``in consideration of those
comments expressing the view that recordkeeping requirements should be
less onerous for smaller banks.'' \7\ During its rulemaking process,
the FDIC proposed a 50-transaction threshold but ultimately adopted the
200-transaction threshold of the current Small Transaction Exception to
align the rule with the OCC's and FRB's rules, respectively.\8\
---------------------------------------------------------------------------
\7\ 43 FR 51638 (Nov. 6, 1978).
\8\ 43 FR 51638; see 44 FR 43263.
---------------------------------------------------------------------------
Over time, the FDIC amended part 344 to improve efficiency, reflect
market developments, and to be consistent with regulatory changes made
by other regulators that affect requirements for recordkeeping and
confirmation of securities transactions effected for customers by
banks.\9\ For example, the FDIC in 1995 adopted an amendment to Part
344 to add express authority for the FDIC's Board of Directors to waive
any provision of the part for good cause shown.\10\ The other Agencies
also amended their rules, respectively, over the course of time to
improve efficiency and reflect market developments. As a result, the
Agencies' rules remain substantially similar although not identical.
For example, the OCC's rule also includes an interpretation clarifying
that national banks may satisfy notification requirements
electronically, but neither the FRB nor the FDIC has expressly adopted
such clarification.\11\ However, this distinction is no longer germane
in light of the Electronic Signatures in Global National Commerce
Act,\12\ which provides a general rule of validity for electronic
records and signatures for transactions in or affecting interstate or
foreign commerce.
---------------------------------------------------------------------------
\9\ See 72 FR 60546 (Oct. 25, 2007); 62 FR 9915 (Mar. 5, 1997);
60 FR 7111 (Feb. 7, 1995); 45 FR 12775 (Feb. 27, 1980).
\10\ 60 FR 7111.
\11\ 61 FR 63958, 63956 (Dec. 2, 1996).
\12\ Public Law 106-229, 114 Stat. 464 (2000).
---------------------------------------------------------------------------
Former OTS's 12 CFR Part 551 (Transferred to FDIC's Part 390, Subpart
K)
In 2002, the OTS adopted 12 CFR part 551 as a final rule governing
recordkeeping and confirmation requirements for securities transactions
effected by State and Federal savings associations based on the
Agencies' recordkeeping and confirmation regulations.\13\ However, it
made modifications to reflect SEC requirements for registered broker-
dealers, investment companies and investment advisors. For example,
OTS's part 551 contained a small transaction exception from the general
recordkeeping and confirmation requirements savings associations that
effected an average of 500 or fewer transactions for customers per year
over the three prior calendar years.\14\ In its final rule, the OTS
noted that it based the 500-transaction threshold of this exception on
the de minimis exception for banks from being deemed a ``broker'' under
the SEC's definition in section 3(a)(4) of the Securities Exchange Act
of 1934 (``Exchange Act''), 15 U.S.C. 78c(a)(4)(B)(xi), as amended by
Section 201 of the Gramm-Leach-Bliley Act of 1999 \15\ (the ``GLB
Act'').\16\ Briefly, the GLB Act amended the definition of ``broker''
in the Exchange Act to exclude specified bank securities activities
from such definition.\17\ It also added a de minimis exception that
permits banks to effect not more than 500 securities transactions for
customers in any calendar year without being considered a broker under
the Exchange Act.\18\ Under the Exchange Act, State savings
associations are included in the definition of ``bank.'' \19\
---------------------------------------------------------------------------
\13\ 67 FR 76293, 76299 (Dec. 12, 2002); see 67 FR 39886 (June
11, 2002).
\14\ 12 CFR 551.20(b)(1).
\15\ Public Law 106-102, 113 Stat. 1338, 1385 (1999).
\16\ 67 FR 39886, 39887 (June 11, 2002).
\17\ 15 U.S.C. 78c(a)(4)(B)(i)-(xi).
\18\ 15 U.S.C. 78c(a)(4)(B)(xi). By SEC rules, the 500-
transaction limit of the de minimis exception applies to the
combined total number of bank broker transactions and dealer
riskless principal transactions. See 17 CFR 240.3a5-1.
\19\ 15 U.S.C. 78c(a)(6).
---------------------------------------------------------------------------
In addition, the OTS's part 551 required that savings associations
that maintain and preserve records via micrographic and electronic
storage do so in a manner consistent with the SEC's requirements for
registered investment companies and investment advisors.\20\ This
provision required, among other things, that the savings association or
the person maintaining
[[Page 54406]]
records on its behalf, arrange and index the records in a certain
manner and separately store the original record from a duplicative copy
of the record.\21\
---------------------------------------------------------------------------
\20\ 67 FR 39887; see 17 CFR 270.31a-2(f); 17 CR 275.204-2(g).
\21\ 12 CFR 390.205; see 12 CFR 551.60 (2011).
---------------------------------------------------------------------------
With respect to the OTS's requirements related to micrographic and
electronic storage of records that were transferred to part 390,
subpart K, section 390.205(b), while not required by the FDIC's part
344, these provisions are largely outdated and unnecessary in light of
the current industry practice of utilizing and storing electronic
records in a manner consistent with the SEC's guidelines, especially
regarding indexing records and maintaining backup records. Further the
Agencies have specific interagency policies relating to backing up
electronic records.\22\ Accordingly, the FDIC sees no need to impose
these requirements on all FDIC-supervised institutions at this point
but solicits specific commentary on whether any existing provision of
Part 344 is outdated or unnecessary in light of industry practice or
technological advances.
---------------------------------------------------------------------------
\22\ See Fed. Fin. Inst. Examination Council, IT Examination
Handbook: Information Security (2006), available at http://ithandbook.ffiec.gov/it-booklets.aspx.
---------------------------------------------------------------------------
Despite the differences addressed above and minor technical
nuances,\23\ the OTS's rule was otherwise substantively similar to the
Agencies' recordkeeping and confirmation rules, including the FDIC's
part 344. After careful comparison of the FDIC's part 344 that existed
before the OTS rules were transferred with the transferred OTS rule on
recordkeeping and confirmation requirements for securities
transactions, the FDIC has concluded that the transferred OTS rules
found at part 390, subpart K, are substantively redundant. Therefore,
based on the above, the FDIC proposes to rescind and remove from the
Code of Federal Regulations the rules located at Part 390, Subpart K.
---------------------------------------------------------------------------
\23\ Most notably, the OTS's part 551 divided recordkeeping and
confirmation requirements into separate subparts; titled each
section of text in question-and-answer format; and included
descriptive charts.
---------------------------------------------------------------------------
Additionally, the FDIC recognizes that some State savings
associations availed themselves of the small transaction exception in
OTS's 12 CFR part 551 from certain recordkeeping and written policies
and procedures requirements if effecting and average of 500 or fewer
transactions for customers per year over a three calendar year period.
This provision was transferred to section 390.201(b)(1) of part 390,
subpart K. The threshold of FDIC's Small Transaction Exception in part
344 has been limited to 200 securities transactions since 1979, even
though bank securities activities have increased over the past three
decades. In 1999, Congress recognized the increase in bank securities
activities when it enacted Title II of the GLB Act to carve out certain
bank securities activities from the Exchange Act's definition of
``broker,'' including the de minimis exception for banks effecting not
more than 500 transactions in a calendar year. As such, it is
appropriate now for the FDIC to propose increasing, from 200
transactions to 500 transactions, the threshold for all FDIC-supervised
institutions availing themselves of the Small Transaction Exception in
Part 344. This action would ensure parity for recordkeeping and
confirmation purposes for State savings associations and all other
FDIC-supervised institutions bound by part 344.
II. The Proposal
Regarding the functions of the former OTS that were transferred to
the FDIC, section 316(b)(3) of the Dodd-Frank Act, 12 U.S.C.
5414(b)(3), in pertinent part, provides that the former OTS's
regulations will be enforceable by the FDIC until they are modified,
terminated, set aside, or superseded in accordance with applicable law.
After reviewing the rules currently found in part 390, subpart K, the
FDIC, as the appropriate federal banking agency for State savings
associations, proposes to rescind part 390, subpart K, in its entirety.
The FDIC also proposes to amend section 344.3 to remove ``bank'' from
the list of defined terms and to add the definition of ``FDIC-
supervised institution'' to this list. ``FDIC-supervised institution''
would mean any insured depository institution for which the FDIC is the
appropriate Federal banking agency pursuant to section 3(q) of the FDI
Act, 12 U.S.C. 1813(q). Under the Proposal, the term ``FDIC-supervised
institution'' and its plural form would replace ``bank,'' ``banks,''
``state nonmember insured bank (except a District bank)'' and ``foreign
bank(s) having an insured branch'' throughout part 344. If the proposal
is finalized, the recordkeeping and confirmation requirements in part
344 would apply to all FDIC-supervised institutions that effect
securities transactions for customers, and part 390, subpart K would be
removed because it is largely redundant of those rules found in part
344. Rescinding part 390, subpart K, will serve to streamline the
FDIC's rules and eliminate unnecessary regulations.
In addition, the FDIC proposes to amend section 344.2(a)(1) to
raise the threshold for the Small Transaction Exception applicable to
all FDIC-supervised institutions effecting securities transactions for
customers, from 200 transactions to 500 transactions, per calendar year
over the prior three calendar year period.
III. Request for Comments
The FDIC invites comments on all aspects of this proposed
rulemaking, and specifically requests comments on the following:
(1) Are there any specific provisions of part 344 that are
technologically outdated or obsolete, or are behind industry standards?
If so, please describe and recommend alternate recordkeeping
methodology.
(2) Are the provisions of the proposed part 344 sufficient to
provide consistent and effective recordkeeping and confirmation
requirements for all FDIC-supervised institutions? Please substantiate
your answer.
(3) What impacts, positive or negative, can you foresee in the
FDIC's proposal to rescind part 390, subpart K?
Written comments must be received by the FDIC no later than
November 4, 2013.
IV. Regulatory Analysis and Procedure
A. The Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act
(``PRA'') of 1995 (44 U.S.C. 3501-3521), the FDIC may not conduct or
sponsor, and the respondent is not required to respond to, an
information collection unless it displays a currently valid Office of
Management and Budget (``OMB'') control number.
The Proposed Rule would rescind and remove from FDIC regulations
part 390, subpart K. This rule was transferred with only nominal
changes to the FDIC from the OTS when the OTS was abolished by Title
III of the Dodd-Frank Act. Part 390, subpart K, is largely redundant of
the FDIC's existing Part 344 regarding recordkeeping and confirmation
requirements effected by State nonmember banks and insured branches of
foreign banks. The information collections contained in part 344 are
cleared by OMB under the FDIC's ``Recordkeeping and Confirmation
Requirements for Securities Transactions'' information collection (OMB
No. 3064-0028). The FDIC's burden estimates were updated in connection
with the collection's 2012 renewal to include State savings
associations transferred from the OTS to the FDIC. Thus, this provision
of the Proposed Rule will not involve any new collections of
information pursuant to the PRA.
[[Page 54407]]
Further, with regard to part 344, the Proposed Rule would amend
section 344.2(a)(1) to increase the threshold, from 200 transactions to
500 transactions per calendar year over the prior three calendar year
period, for the Small Transaction Exception from certain of the
recordkeeping requirements applicable to all FDIC-supervised insured
depository institutions. The effect of the increased threshold will be
to increase the number of institutions that are exempt from more
elaborate recordkeeping requirements in part 344 and from the need to
have written management policies and operational procedures. However,
the FDIC's burden calculations are based on an estimated average
response time across all supervised institutions. Therefore, the
nominal increase in exempted institutions will have no significant
impact on overall current burden estimates. As such, this provision of
the Proposed Rule will not involve any new collections of information
under the PRA.
Finally, the Proposed Rule would amend section 344.3 to remove the
definition of ``bank'' from the list of defined terms and add the
definition of ``FDIC-supervised institution.'' This measure is to
clarify throughout Part 344 that State savings associations, as well as
State nonmember insured banks and foreign banks having insured branches
are all subject to part 344. Thus, this provision of the Proposed Rule
will not involve any new collections of information under the PRA or
impact current burden estimates.
Based on the above, no information collection request has been
submitted to the OMB for review.
B. The Regulatory Flexibility Act
The Regulatory Flexibility Act (``RFA''), requires that, in
connection with a notice of proposed rulemaking, an agency prepare and
make available for public comment an initial regulatory flexibility
analysis that describes the impact of the proposed rule on small
entities (defined in regulations promulgated by the Small Business
Administration to include banking organizations with total assets of
less than or equal to $500 million).\24\ However, a regulatory
flexibility analysis is not required if the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities, and publishes its certification and a short
explanatory statement in the Federal Register together with the rule.
For the reasons provided below, the FDIC certifies that the Proposed
Rule, if adopted in final form, would not have a significant economic
impact on a substantial number of small entities. Accordingly, a
regulatory flexibility analysis is not required.
---------------------------------------------------------------------------
\24\ 5 U.S.C. 601 et seq.
---------------------------------------------------------------------------
As discussed in this notice of proposed rulemaking, part 390,
subpart K, was transferred from OTS's part 551, which governed
recordkeeping and confirmation requirements for Federal and State
savings associations that effect securities transactions for customers.
OTS's part 551 had been in effect since 2002, and all State savings
associations were required to comply with it. Because it is redundant
of existing part 344 of the FDIC's Rules, the FDIC proposes rescinding
and removing part 390, subpart K. As a result, all FDIC-supervised
institutions--including State savings associations--would be required
to comply with part 344 if they effect securities transactions for
customers. Because all State savings associations have been required to
comply with substantially similar recordkeeping and confirmation rules
when they effected securities transactions for customers since 2002,
today's Proposal would have no significant economic impact on any State
savings association.
Further, the Proposal would amend section 344.2(a)(1) to increase
the threshold for all FDIC-supervised institutions relying on the Small
Transaction Exception from 200 to 500 transactions for customers per
calendar year over the prior three calendar year period. As State
savings associations currently comply with a 500-transaction small
transaction threshold, the only impact of this portion of the proposal
would be to exempt more State nonmember insured banks and foreign banks
having insured branches from complying with certain recordkeeping and
written policy and procedure requirements, thus reducing regulatory
burden for these insured depository institutions. There is no existing
data that is helpful in determining how many State nonmember insured
banks and foreign banks having insured branches that transact on
average between 201 and 500 transactions for customers per calendar
year over the prior three calendar year period would take advantage of
an increased transaction threshold for the FDIC's Small Transaction
Exception. Nevertheless, if the Proposal reduces recordkeeping and
written policy procedure requirements for any insured depository
institutions, there still would be no significant economic impact on a
substantial number of small entities.
C. Plain Language
Section 722 of the GLB Act, codified at 12 U.S.C. 4809, requires
each Federal banking agency to use plain language in all of its
proposed and final rules published after January 1, 2000. The FDIC
invites comments on whether the Proposed Rule is clearly stated and
effectively organized, and how the FDIC might make it easier to
understand.
For example:
Has the FDIC organized the material to suit your needs? If
not, how could it present the rule more clearly?
Have we clearly stated the requirements of the rule? If
not, how could the rule be more clearly stated?
Does the rule contain technical jargon that is not clear?
If so, which language requires clarification?
Would a different format (grouping and order of sections,
use of headings, paragraphing) make the regulation easier to
understand? If so, what changes would make the regulation easier to
understand?
What else could we do to make the regulation easier to
understand?
D. The Economic Growth and Regulatory Paperwork Reduction Act
Under section 2222 of the Economic Growth and Regulatory Paperwork
Reduction Act of 1996 (``EGRPRA''), the FDIC is required to review all
of its regulations, at least once every 10 years, in order to identify
any outdated or otherwise unnecessary regulations imposed on insured
institutions.\25\ The FDIC completed the last comprehensive review of
its regulations under EGRPRA in 2006 and is commencing the next
decennial review. The action taken on this rule will be included as
part of the EGRPRA review that is currently under way. As part of that
review, the FDIC invites comments concerning whether the Proposed Rule
would impose any outdated or unnecessary regulatory requirements on
insured depository institutions. If you provide such comments, please
be specific and provide alternatives whenever appropriate.
---------------------------------------------------------------------------
\25\ Public Law 104-208 (Sept. 30, 1996).
---------------------------------------------------------------------------
List of Subjects
12 CFR Part 344
Banks, banking; Reporting and recordkeeping requirements; Savings
associations.
12 CFR Part 390
Reporting and recordkeeping requirements.
[[Page 54408]]
Authority and Issuance
For the reasons stated in the preamble, the Board of Directors of
the Federal Deposit Insurance Corporation proposes to amend parts 344
and 390 of title 12 of the Code of Federal Regulations as set forth
below:
0
1. Revise part 344 to read as follows:
PART 344--RECORDKEEPING AND CONFIRMATION REQUIREMENTS FOR
SECURITIES TRANSACTIONS
Sec.
344.1 Purpose and scope.
344.2 Exceptions.
344.3 Definitions.
344.4 Recordkeeping.
344.5 Content and time of notification.
344.6 Notification by agreement; alternative forms and times of
notification.
344.7 Settlement of securities transactions.
344.8 Securities trading policies and procedures.
344.9 Personal securities trading reporting by officers and
employees of FDIC-supervised institutions.
344.10 Waivers.
Authority: 12 U.S.C. 1817, 1818, 1819, and 5412.
Sec. 344.1 Purpose and scope.
(a) Purpose. The purpose of this part is to ensure that purchasers
of securities in transactions effected by FDIC-supervised institutions
are provided adequate information regarding transactions. This part is
also designed to ensure that FDIC-supervised institutions subject to
this part maintain adequate records and controls with respect to the
securities transactions they effect.
(b) Scope; general. Any security transaction effected for a
customer by an FDIC-supervised institution is subject to this part
unless excepted by Sec. 344.2. An FDIC-supervised institution
effecting transactions in government securities is subject to the
notification, recordkeeping, and policies and procedures requirements
of this part. This part also applies to municipal securities
transactions by an FDIC-supervised institution that is not registered
as a ``municipal securities dealer'' with the Securities and Exchange
Commission. See 15 U.S.C. 78c(a)(30) and 78o-4.
Sec. 344.2 Exceptions.
(a) An FDIC-supervised institution effecting securities
transactions for customers is not subject to all or part of this part
344 to the extent that they qualify for one or more of the following
exceptions:
(1) Small number of transactions. The requirements of Sec. Sec.
344.4(a)(2) through (4) and 344.8(a)(1) through (3) do not apply to an
FDIC-supervised institution effecting an average of fewer than 500
securities transactions per year for customers over the prior three
calendar year period. The calculation of this average does not include
transactions in government securities.
(2) Government securities. The recordkeeping requirements of Sec.
344.4 do not apply to FDIC-supervised institutions effecting fewer than
500 government securities brokerage transactions per year. This
exemption does not apply to government securities dealer transactions
by FDIC-supervised institutions.
(3) Municipal securities. This part does not apply to transactions
in municipal securities effected by an FDIC-supervised institution
registered with the Securities and Exchange Commission as a ``municipal
securities dealer'' as defined in title 15 U.S.C. 78c(a)(30). See 15
U.S.C. 78o-4.
(4) Foreign branches. Activities of foreign branches of FDIC-
supervised institutions shall not be subject to the requirements of
this part.
(5) Transactions effected by registered broker/dealers. (i) This
part does not apply to securities transactions effected for an FDIC-
supervised institution's customer by a registered broker/dealer if:
(A) The broker/dealer is fully disclosed to the customer; and
(B) The customer has a direct contractual agreement with the
broker/dealer.
(ii) This exemption extends to arrangements with broker/dealers
which involve FDIC-supervised institution employees when acting as
employees of, and subject to the supervision of, the registered broker/
dealer when soliciting, recommending, or effecting securities
transactions.
(b) Safe and sound operations. Notwithstanding this section, every
FDIC-supervised institution effecting securities transactions for
customers shall maintain, directly or indirectly, effective systems of
records and controls regarding their customer securities transactions
to ensure safe and sound operations. The records and systems maintained
must clearly and accurately reflect the information required under this
part and provide an adequate basis for an audit.
Sec. 344.3 Definitions.
(a) Asset-backed security means a security that is serviced
primarily by the cash flows of a discrete pool of receivables or other
financial assets, either fixed or revolving, that by their terms
convert into cash within a finite time period plus any rights or other
assets designed to assure the servicing or timely distribution of
proceeds to the security holders.
(b) Cash management sweep account means a prearranged, automatic
transfer of funds above a certain dollar level from a deposit account
to purchase a security or securities, or any prearranged, automatic
redemption or sale of a security or securities when a deposit account
drops below a certain level with the proceeds being transferred into a
deposit account.
(c) Collective investment fund means funds held by an FDIC-
supervised institution as fiduciary and, consistent with local law,
invested collectively:
(1) In a common trust fund maintained by such FDIC-supervised
institution exclusively for the collective investment and reinvestment
of monies contributed thereto by the FDIC-supervised institution in its
capacity as trustee, executor, administrator, guardian, or custodian
under the Uniform Gifts to Minors Act; or
(2) In a fund consisting solely of assets of retirement, pension,
profit sharing, stock bonus or similar trusts which are exempt from
Federal income taxation under the Internal Revenue Code (26 U.S.C.).
(d) Completion of the transaction means:
(1) For purchase transactions, the time when the customer pays the
FDIC-supervised institution any part of the purchase price (or the time
when the FDIC-supervised institution makes the book-entry for any part
of the purchase price, if applicable), however, if the customer pays
for the security prior to the time payment is requested or becomes due,
then the transaction shall be completed when the FDIC-supervised
institution transfers the security into the account of the customer;
and
(2) For sale transactions, the time when the FDIC-supervised
institution transfers the security out of the account of the customer
or, if the security is not in its custody, then the time when the
security is delivered to it, however, if the customer delivers the
security to the FDIC-supervised institution prior to the time delivery
is requested or becomes due then the transaction shall be completed
when the FDIC-supervised institution makes payment into the account of
the customer.
(e) Crossing of buy and sell orders means a security transaction in
which the same FDIC-supervised institution acts as agent for both the
buyer and the seller.
(f) Customer means any person or account, including any agency,
trust, estate, guardianship, or other fiduciary account for which an
FDIC-supervised
[[Page 54409]]
institution effects or participates in effecting the purchase or sale
of securities, but does not include a broker, dealer, insured
depository institution acting as a broker or a dealer, issuer of the
securities that are the subject of the transaction or a person or
account having a direct, contractual agreement with a fully disclosed
broker/dealer.
(g) Debt security means any security, such as a bond, debenture,
note, or any other similar instrument that evidences a liability of the
issuer (including any security of this type that is convertible into
stock or a similar security) and fractional or participation interests
in one or more of any of the foregoing; provided, however, that
securities issued by an investment company registered under the
Investment Company Act of 1940, 15 U.S.C. 80a-1 et seq., shall not be
included in this definition.
(h) FDIC-supervised institution means any insured depository
institution for which the Federal Deposit Insurance Corporation is the
appropriate Federal banking agency pursuant to section 3(q) of the
Federal Deposit Insurance Act, 12 U.S.C. 1813(q).
(i) Government security means:
(1) A security that is a direct obligation of, or obligation
guaranteed as to principal and interest by, the United States;
(2) A security that is issued or guaranteed by a corporation in
which the United States has a direct or indirect interest and which is
designated by the Secretary of the Treasury for exemption as necessary
or appropriate in the public interest or for the protection of
investors;
(3) A security issued or guaranteed as to principal and interest by
any corporation whose securities are designated, by statute
specifically naming the corporation, to constitute exempt securities
within the meaning of the laws administered by the Securities and
Exchange Commission; or
(4) Any put, call, straddle, option, or privilege on a security
described in paragraph (i)(1), (2), or (3) of this section other than a
put, call, straddle, option, or privilege that is traded on one or more
national securities exchanges, or for which quotations are disseminated
through an automated quotation system operated by a registered
securities association.
(j) Investment discretion means that, with respect to an account,
an FDIC-supervised institution directly or indirectly:
(1) Is authorized to determine what securities or other property
shall be purchased or sold by or for the account; or
(2) Makes decisions as to what securities or other property shall
be purchased or sold by or for the account even though some other
person may have responsibility for these investment decisions.
(k) Municipal security means a security which is a direct
obligation of, or an obligation guaranteed as to principal or interest
by, a State or any political subdivision, or any agency or
instrumentality of a State or any political subdivision, or any
municipal corporate instrumentality of one or more States or any
security which is an industrial development bond (as defined in 26
U.S.C. 103(c)(2)) the interest on which is excludable from gross income
under 26 U.S.C. 103(a)(1) if, by reason of the application of paragraph
(4) or (6) of 26 U.S.C. 103(c) (determined as if paragraphs (4)(A), (5)
and (7) were not included in 26 U.S.C. 103(c), paragraph (1) of 26
U.S.C. 103(c) does not apply to such security. See 15. U.S.C.
78c(a)(29).
(l) Periodic plan means any written authorization for an FDIC-
supervised institution to act as agent to purchase or sell for a
customer a specific security or securities, in a specific amount
(calculated in security units or dollars) or to the extent of dividends
and funds available, at specific time intervals, and setting forth the
commission or charges to be paid by the customer or the manner of
calculating them. Periodic plans include dividend reinvestment plans,
automatic investment plans, and employee stock purchase plans.
(m) Security means any note, stock, treasury stock, bond,
debenture, certificate of interest or participation in any profit-
sharing agreement or in any oil, gas, or other mineral royalty or
lease, any collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-trust
certificate, and any put, call, straddle, option, or privilege on any
security or group or index of securities (including any interest
therein or based on the value thereof), or, in general, any instrument
commonly known as a ``security''; or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, or
warrant or right to subscribe to or purchase, any of the foregoing. The
term security does not include:
(1) A deposit or share account in a federally or state insured
depository institution;
(2) A loan participation;
(3) A letter of credit or other form of insured depository
institution indebtedness incurred in the ordinary course of business;
(4) Currency;
(5) Any note, draft, bill of exchange, or bankers acceptance which
has a maturity at the time of issuance of not exceeding nine months,
exclusive of days of grace, or any renewal thereof the maturity of
which is likewise limited;
(6) Units of a collective investment fund;
(7) Interests in a variable amount (master) note of a borrower of
prime credit; or
(8) U.S. Savings Bonds.
Sec. 344.4 Recordkeeping.
(a) General rule. An FDIC-supervised institution effecting
securities transactions for customers shall maintain the following
records for at least three years:
(1) Chronological records. An itemized daily record of each
purchase and sale of securities maintained in chronological order, and
including:
(i) Account or customer name for which each transaction was
effected;
(ii) Description of the securities;
(iii) Unit and aggregate purchase or sale price;
(iv) Trade date; and
(v) Name or other designation of the broker/dealer or other person
from whom the securities were purchased or to whom the securities were
sold;
(2) Account records. Account records for each customer, reflecting:
(i) Purchases and sales of securities;
(ii) Receipts and deliveries of securities;
(iii) Receipts and disbursements of cash; and
(iv) Other debits and credits pertaining to transactions in
securities;
(3) A separate memorandum (order ticket) of each order to purchase
or sell securities (whether executed or canceled), which shall include:
(i) The accounts for which the transaction was effected;
(ii) Whether the transaction was a market order, limit order, or
subject to special instructions;
(iii) The time the order was received by the trader or other FDIC-
supervised institution employee responsible for effecting the
transaction;
(iv) The time the order was placed with the broker/dealer, or if
there was no broker/dealer, time the order was executed or canceled;
(v) The price at which the order was executed; and
(vi) The broker/dealer utilized;
(4) Record of broker/dealers. A record of all broker/dealers
selected by the FDIC-supervised institution to effect securities
transactions and the amount of commissions paid or allocated to each
broker during the calendar year; and
[[Page 54410]]
(5) Notifications. A copy of the written notification required by
Sec. Sec. 344.5 and 344.6.
(b) Manner of maintenance. Records may be maintained in whatever
manner, form or format an FDIC-supervised institution deems
appropriate, provided however, the records required by this section
must clearly and accurately reflect the information required and
provide an adequate basis for the audit of the information. Records may
be maintained in hard copy, automated or electronic form provided the
records are easily retrievable, readily available for inspection, and
capable of being reproduced in a hard copy. An FDIC-supervised
institution may contract with third party service providers, including
broker/dealers, to maintain records required under this part.
Sec. 344.5 Content and time of notification.
Every FDIC-supervised institution effecting a securities
transaction for a customer shall give or send, by mail, facsimile or
other means of electronic transmission, to the customer at or before
completion of the transaction one of the types of written notification
identified below:
(a) Broker/dealer's confirmations. (1) A copy of the confirmation
of a broker/dealer relating to the securities transaction. An FDIC-
supervised institution may either have the broker/dealer send the
confirmation directly to the FDIC-supervised institution's customer or
send a copy of the broker/dealer's confirmation to the customer upon
receipt of the confirmation by the FDIC-supervised institution. If an
FDIC-supervised institution chooses to send a copy of the broker/
dealer's confirmation, it must be sent within one business day from the
institution's receipt of the broker/dealer's confirmation; and
(2) If the FDIC-supervised institution is to receive remuneration
from the customer or any other source in connection with the
transaction, a statement of the source and amount of any remuneration
to be received if such would be required under paragraph (b)(6) of this
section; or
(b) Written notification. A written notification disclosing:
(1) Name of the FDIC-supervised institution;
(2) Name of the customer;
(3) Whether the FDIC-supervised institution is acting as agent for
such customer, as agent for both such customer and some other person,
as principal for its own account, or in any other capacity;
(4) The date and time of execution, or the fact that the time of
execution will be furnished within a reasonable time upon written
request of the customer, and the identity, price, and number of shares
or units (or principal amount in the case of debt securities) of the
security purchased or sold by the customer;
(5) The amount of any remuneration received or to be received,
directly or indirectly, by any broker/dealer from such customer in
connection with the transaction;
(6)(i) The amount of any remuneration received or to be received by
the FDIC-supervised institution from the customer, and the source and
amount of any other remuneration received or to be received by the
FDIC-supervised institution in connection with the transaction, unless:
(A) Remuneration is determined pursuant to a prior written
agreement between the FDIC-supervised institution and the customer; or
(B) In the case of government securities and municipal securities,
the FDIC-supervised institution received the remuneration in other than
an agency transaction; or
(C) In the case of open end investment company securities, the
FDIC-supervised institution has provided the customer with a current
prospectus which discloses all current fees, loads and expenses at or
before completion of the transaction;
(ii) If the FDIC-supervised institution elects not to disclose the
source and amount of remuneration it has or will receive from a party
other than the customer pursuant to paragraph (b)(6)(i)(A), (B), or (C)
of this section, the written notification must disclose whether the
FDIC-supervised institution has received or will receive remuneration
from a party other than the customer, and that the FDIC-supervised
institution will furnish within a reasonable time the source and amount
of this remuneration upon written request of the customer. This
election is not available, however, if, with respect to a purchase, the
FDIC-supervised institution was participating in a distribution of that
security; or, with respect to a sale, the FDIC-supervised institution
was participating in a tender offer for that security;
(7) Name of the broker/dealer utilized; or where there is no
broker/dealer, the name of the person from whom the security was
purchased or to whom the security was sold, or a statement that the
FDIC-supervised institution will furnish this information within a
reasonable time upon written request;
(8) In the case of a transaction in a debt security subject to
redemption before maturity, a statement to the effect that the debt
security may be redeemed in whole or in part before maturity, that the
redemption could affect the yield represented and that additional
information is available upon request;
(9) In the case of a transaction in a debt security effected
exclusively on the basis of a dollar price:
(i) The dollar price at which the transaction was effected; and
(ii) The yield to maturity calculated from the dollar price,
provided however, that this shall not apply to a transaction in a debt
security that either has a maturity date that may be extended by the
issuer thereof, with a variable interest payable thereon, or is an
asset-backed security that represents an interest in or is secured by a
pool of receivables or other financial assets that are subject
continuously to prepayment;
(10) In the case of a transaction in a debt security effected on
the basis of yield:
(i) The yield at which the transaction was effected, including the
percentage amount and its characterization (e.g., current yield, yield
to maturity, or yield to call) and if effected at yield to call, the
type of call, the call date and call price;
(ii) The dollar price calculated from the yield at which the
transaction was effected; and
(iii) If effected on a basis other than yield to maturity and the
yield to maturity is lower than the represented yield, the yield to
maturity as well as the represented yield; provided however, that this
paragraph (b)(10) shall not apply to a transaction in a debt security
that either has a maturity date that may be extended by the issuer with
a variable interest rate payable thereon, or is an asset-backed
security that represents an interest in or is secured by a pool of
receivables or other financial assets that are subject continuously to
prepayment;
(11) In the case of a transaction in a debt security that is an
asset-backed security, which represents an interest in or is secured by
a pool of receivables or other financial assets that are subject
continuously to prepayment, a statement indicating that the actual
yield of the asset-backed security may vary according to the rate at
which the underlying receivables or other financial assets are prepaid
and a statement of the fact that information concerning the factors
that affect yield (including at a minimum estimated yield, weighted
average life, and the prepayment assumptions underlying yield) will be
furnished upon written request of the customer; and
(12) In the case of a transaction in a debt security, other than a
government
[[Page 54411]]
security, that the security is unrated by a nationally recognized
statistical rating organization, if that is the case.
Sec. 344.6 Notification by agreement; alternative forms and times of
notification.
An FDIC-supervised institution may elect to use the following
alternative notification procedures if the transaction is effected for:
(a) Notification by agreement. Accounts (except periodic plans)
where the FDIC-supervised institution does not exercise investment
discretion and the FDIC-supervised institution and the customer agree
in writing to a different arrangement as to the time and content of the
written notification; provided however, that such agreement makes clear
the customer's right to receive the written notification pursuant to
Sec. 344.5(a) or (b) at no additional cost to the customer.
(b) Trust accounts. Accounts (except collective investment funds)
where the FDIC-supervised institution exercises investment discretion
in other than in an agency capacity, in which instance it shall, upon
request of the person having the power to terminate the account or, if
there is no such person, upon the request of any person holding a
vested beneficial interest in such account, give or send to such person
the written notification within a reasonable time. The FDIC-supervised
institution may charge such person a reasonable fee for providing this
information.
(c) Agency accounts. Accounts where the FDIC-supervised institution
exercises investment discretion in an agency capacity, in which
instance:
(1) The FDIC-supervised institution shall give or send to each
customer not less frequently than once every three months an itemized
statement which shall specify the funds and securities in the custody
or possession of the FDIC-supervised institution at the end of such
period and all debits, credits and transactions in the customer's
accounts during such period; and
(2) If requested by the customer, the FDIC-supervised institution
shall give or send to each customer within a reasonable time the
written notification described in Sec. 344.5. The FDIC-supervised
institution may charge a reasonable fee for providing the information
described in Sec. 344.5.
(d) Cash management sweep accounts. An FDIC-supervised institution
effecting a securities transaction for a cash management sweep account
shall give or send its customer a written statement, in the same form
as required under paragraph (f) of this section, for each month in
which a purchase or sale of a security takes place in the account and
not less than once every three months if there are no securities
transactions in the account. Notwithstanding the provisions of this
paragraph (d), FDIC-supervised institutions that retain custody of
government securities that are the subject of a hold-in-custody
repurchase agreement are subject to the requirements of 17 CFR
403.5(d).
(e) Collective investment fund accounts. The FDIC-supervised
institution shall at least annually give or send to the customer a copy
of a financial report of the fund, or provide notice that a copy of
such report is available and will be furnished upon request to each
person to whom a regular periodic accounting would ordinarily be
rendered with respect to each participating account. This report shall
be based upon an audit made by independent public accountants or
internal auditors responsible only to the board of directors of the
FDIC-supervised institution.
(f) Periodic plan accounts. The FDIC-supervised institution shall
give or send to the customer not less than once every three months a
written statement showing:
(1) The funds and securities in the custody or possession of the
FDIC-supervised institution;
(2) All service charges and commissions paid by the customer in
connection with the transaction; and
(3) All other debits and credits of the customer's account involved
in the transaction; provided that upon written request of the customer,
the FDIC-supervised institution shall give or send the information
described in Sec. 344.5, except that any such information relating to
remuneration paid in connection with the transaction need not be
provided to the customer when the remuneration is paid by a source
other than the customer. The FDIC-supervised institution may charge a
reasonable fee for providing information described in Sec. 344.5.
Sec. 344.7 Settlement of securities transactions.
(a) An FDIC-supervised institution shall not effect or enter into a
contract for the purchase or sale of a security (other than an exempted
security as defined in 15 U.S.C. 78c(a)(12), government security,
municipal security, commercial paper, bankers' acceptances, or
commercial bills) that provides for payment of funds and delivery of
securities later than the third business day after the date of the
contract unless otherwise expressly agreed to by the parties at the
time of the transaction.
(b) Paragraphs (a) and (c) of this section shall not apply to
contracts:
(1) For the purchase or sale of limited partnership interests that
are not listed on an exchange or for which quotations are not
disseminated through an automated quotation system of a registered
securities association; or
(2) For the purchase or sale of securities that the Securities and
Exchange Commission (SEC) may from time to time, taking into account
then existing market practices, exempt by order from the requirements
of paragraph (a) of SEC Rule 15c6-1, 17 CFR 240.15c6-1(a), either
unconditionally or on specified terms and conditions, if the SEC
determines that an exemption is consistent with the public interest and
the protection of investors.
(c) Paragraph (a) of this section shall not apply to contracts for
the sale for cash of securities that are priced after 4:30 p.m. Eastern
time on the date the securities are priced and that are sold by an
issuer to an underwriter pursuant to a firm commitment underwritten
offering registered under the Securities Act of 1933, 15 U.S.C. 77a et
seq., or sold to an initial purchaser by an FDIC-supervised institution
participating in the offering. An FDIC-supervised institution shall not
effect or enter into a contract for the purchase or sale of the
securities that provides for payment of funds and delivery of
securities later than the fourth business day after the date of the
contract unless otherwise expressly agreed to by the parties at the
time of the transaction.
(d) For the purposes of paragraphs (a) and (c) of this section, the
parties to a contract shall be deemed to have expressly agreed to an
alternate date for payment of funds and delivery of securities at the
time of the transaction for a contract for the sale for cash of
securities pursuant to a firm commitment offering if the managing
underwriter and the issuer have agreed to the date for all securities
sold pursuant to the offering and the parties to the contract have not
expressly agreed to another date for payment of funds and delivery of
securities at the time of the transaction.
Sec. 344.8 Securities trading policies and procedures.
(a) Policies and procedures. Every FDIC-supervised institution
effecting securities transactions for customers shall establish written
policies and procedures providing:
(1) Assignment of responsibility for supervision of all officers or
employees who:
[[Page 54412]]
(i) Transmit orders to or place orders with broker/dealers; or
(ii) Execute transactions in securities for customers;
(2) Assignment of responsibility for supervision and reporting,
separate from those in paragraph (a)(1) of this section, with respect
to all officers or employees who process orders for notification or
settlement purposes, or perform other back office functions with
respect to securities transactions effected for customers;
(3) For the fair and equitable allocation of securities and prices
to accounts when orders for the same security are received at
approximately the same time and are placed for execution either
individually or in combination; and
(4) Where applicable, and where permissible under local law, for
the crossing of buy and sell orders on a fair and equitable basis to
the parties to the transaction.
(b) [Reserved]
Sec. 344.9 Personal securities trading reporting by bank officers and
employees.
(a) Officers and employees subject to reporting. FDIC-supervised
institution officers and employees who:
(1) Make investment recommendations or decisions for the accounts
of customers;
(2) Participate in the determination of such recommendations or
decisions; or
(3) In connection with their duties, obtain information concerning
which securities are being purchased or sold or recommend such action,
must report to the FDIC-supervised institution, within 30-calendar days
after the end of the calendar quarter, all transactions in securities
made by them or on their behalf, either at the FDIC-supervised
institution or elsewhere in which they have a beneficial interest. The
report shall identify the securities purchased or sold and indicate the
dates of the transactions and whether the transactions were purchases
or sales.
(b) Exempt transactions. Excluded from this reporting requirement
are:
(1) Transactions for the benefit of the officer or employee over
which the officer or employee has no direct or indirect influence or
control;
(2) Transactions in registered investment company shares;
(3) Transactions in government securities; and
(4) All transactions involving in the aggregate $10,000 or less
during the calendar quarter.
(c) Alternative report. Where an FDIC-supervised institution acts
as an investment adviser to an investment company registered under the
Investment Company Act of 1940, the FDIC-supervised institution's
officers and employees may fulfill their reporting requirement under
paragraph (a) of this section by filing with the FDIC-supervised
institution the ``access persons'' personal securities trading report
required by SEC Rule 17j-1, 17 CFR 270.17j-1.
Sec. 344.10 Waivers.
The Board of Directors of the FDIC, in its discretion, may waive
for good cause all or any part of this part 344.
PART 390--REGULATIONS TRANSFERRED FROM THE OFFICE OF THRIFT
SUPERVISION
0
2. The authority citation for part 390 is amended by removing the
additional authority for subpart K.
Authority: 12 U.S.C. 1819.
* * * * *
Subpart K--[Removed and Reserved]
0
3. Remove and reserve subpart K, consisting of Sec. Sec. 390.200
through 390.255.
Dated at Washington, DC, this 28th day of August, 2013.
By order of the Board of Directors.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2013-21357 Filed 9-3-13; 8:45 am]
BILLING CODE 6714-01-P