[Federal Register Volume 60, Number 19 (Monday, January 30, 1995)]
[Proposed Rules]
[Pages 5602-5603]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2135]



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DEPARTMENT OF THE TREASURY

Office of the Under Secretary for Domestic Finance

17 CFR Part 449


Form G-405

AGENCY: Office of the Under Secretary for Domestic Finance, Treasury.

ACTION: Proposed form amendments.

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SUMMARY: The Department of the Treasury (``Department'') is proposing 
amendments to Form G-405 (Report on Finances and Operations of 
Government Securities Brokers and Dealers, or the ``FOGS Report''), 
which is the form that registered government securities brokers and 
dealers are required to file pursuant to sections 405.2 and 449.51 
of the regulations issued under the Government Securities Act of 1986 
(the ``Government Securities Act'' or ``GSA'').2 The purpose of 
the proposed amendments is to revise Schedule I of the FOGS Report 
filed by registered government securities brokers and dealers with the 
Securities and Exchange Commission (the ``Commission'' or ``SEC'') to 
require such brokers and dealers to disclose their affiliations, if 
any, with U.S. banks.

    \1\17 CFR 405.2 and 17 CFR 449.5, respectively.
    \2\Pub. L. No. 99-571, 100 Stat. 3208 (1986).
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DATES: Comments must be submitted on or before March 1, 1995.

ADDRESSES: Comments should be sent to: Government Securities 
Regulations Staff, Bureau of the Public Debt, Department of the 
Treasury, 999 E Street, N.W., Room 515, Washington, D.C. 20239-0001. 
Comments received will be available for public inspection and copying 
at the Treasury Department Library, Room 5030, Main Treasury Building, 
1500 Pennsylvania Avenue NW., Washington, D.C. 20220.

FOR FURTHER INFORMATION CONTACT: Ken Papaj (Director) or Ron Couch 
(Government Securities Specialist) at 202-219-3632. (TDD for hearing 
impaired: 202-219-3988.)

SUPPLEMENTARY INFORMATION:

I. Background and Analysis

    The Department adopted Form G-405 in the implementing regulations 
for the GSA issued on July 24, 1987 (52 FR 27910). Sections 405.2 and 
449.5 of the GSA regulations require that registered government 
securities brokers and dealers use the form to make the required 
monthly, quarterly and annual financial reports to the SEC or to their 
appropriate regulatory agency in accordance with any plan approved by 
the SEC. Pursuant to the regulations, registered government securities 
brokers and dealers are required to file financial reports which 
include information on their assets, liabilities, liquid capital, total 
haircuts, and ratio of liquid capital to total haircuts as determined 
in accordance with section 402.2, among other items, on Form G-405.
    To supplement either Part II or IIA of the FOGS Report, registered 
government securities brokers and dealers are also required to file 
Schedule I at the end of each calendar year. The purpose of this 
schedule is to obtain information about the economic and financial 
characteristics of the reporting government securities broker or 
dealer.
    Item 15 of Schedule I to the FOGS report currently requests 
information about the broker's or dealer's affiliation with any foreign 
broker or dealer, or bank. In addition to information about any foreign 
affiliations, the Department believes that it would be useful for 
regulatory purposes to obtain information about registered government 
securities brokers' and dealers' affiliations with U.S. banks. The 
Department therefore is proposing to amend Schedule I to require 
registered government securities brokers and dealers to disclose 
whether they are an affiliate or subsidiary of a U.S. bank, and if so, 
to give the name of that affiliate or parent company, and the type of 
institution. The ``General Instructions'' to Schedule I also would be 
amended to refer to the definition of ``bank'' in section 3(a)(6) of 
the Securities Exchange Act of 1934 (``Exchange Act'').3

    \3\15 U.S.C. 78c(a)(6). Under this section, the term ``bank'' is 
defined as: (a) A banking institution organized under the laws of 
the United States; (b) a member bank of the Federal Reserve System; 
(c) any other banking institution doing business under the laws of 
any state or the United States, a substantial portion of which 
consists of receiving deposits or exercising fiduciary powers 
similar to those permitted to national banks under the authority of 
the Comptroller of the Currency, and which is supervised and 
examined by state or federal authority having supervision over 
banks; and (d) a receiver, conservator, or other liquidating agent 
of any institution or firm included in the above paragraphs.
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    Specifically, the amendments to Form G-405 would add a new item 15 
to request information about an affiliation with or control by a U.S. 
bank. Current items 15 through 18 will become items 16 through 19, 
respectively. The new inquiry would require a yes or no response, and 
if the response is yes, the respondent must provide the name of the 
parent or affiliate and the type of institution.
    The disclosure of this additional information would correspond to 
the SEC's recently revised Form X-17A-5, also known as the ``FOCUS'' 
Report. The amendments are similar to changes made by the SEC to Form 
X-17A-5 in November 1992.4 The Form X-17A-5 is filed by registered 
brokers and dealers with the Commission pursuant to Rule 17a-5 under 
the Exchange Act,5 and is similar to the Form G-405 filed by 
registered government securities brokers and dealers. The Treasury 
shares the SEC's belief that this information would be useful for 
regulatory purposes and this proposal is consistent with the recent SEC 
changes to Form X-17A-5. The Treasury seeks consistency with the SEC 
approach in order to assure equal treatment for all government 
securities brokers and dealers. The Treasury was [[Page 5603]] unable 
to propose amendments to Form G-405 at the same time the SEC made 
changes to its respective form since the Treasury's rulemaking 
authority under the GSA expired on October 1, 1991, and was not 
reauthorized until December 17, 1993.6

    \4\Securities Exchange Act Release No. 31398 (November 4, 1992), 
57 FR 53261 (November 9, 1992).
    \5\17 CFR 240.17a-5.
    \6\Pub. L. No. 103-202, 107 Stat. 2344 (1993).
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    The collection of information in these proposed amendments to Form 
G-405 is contained in the new Item 15 of the form which poses a simple, 
factual question. Form G-405 is required to be submitted by registered 
government securities brokers and dealers to the SEC or to the 
appropriate regulatory authority according to an SEC approved plan. The 
requirement to file Form G-405 is not applicable to financial 
institutions that have filed notice as government securities brokers 
and dealers.
    The Department is proposing to add only the new item 15 to Schedule 
I, and it believes that the changes will not have more than a de 
minimis effect on the amount of time necessary to complete the form. 
The Department's most recent Paperwork Reduction Act Filing with 
respect to all parts of Form G-405, which includes Part I, Part IA, 
Part II, Part IIA, and Part III as well as the proposed amended 
Schedule I, shows an annual estimate of 41 respondents filing 12 times 
per year, with a burden of 144 hours per respondent per year. Since 
Schedule I is only filed once per year while the other parts are filed 
monthly or quarterly, the burden represented by the entire Schedule I 
is only a fraction of the burden imposed by the complete form. The 
requirements for filing Form G-405 have been previously reviewed and 
approved by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act (44 U.S.C. 3504(h)) and assigned control number 
1535-0089. No modification is projected to the reporting burden.

List of Subjects in 17 CFR Part 449

    Banks, banking, Brokers, Government securities, Reporting and 
recordkeeping requirements.

    For the reasons set out in the preamble, it is proposed to amend 17 
CFR part 449 as follows:

PART 449--FORMS, SECTION 15C OF THE SECURITIES EXCHANGE ACT OF 1934

    1. The authority citation for part 449 is revised to read as 
follows:

    Authority: Sec. 101, Pub. L. 99-571, 100 Stat. 3208; Sec. 4(b), 
Pub. L. 101-432, 104 Stat. 963; Sec. 102, Sec. 106, Pub. L. 103-202, 
107 Stat. 2344 (15 U.S.C. 78o-5(a), (b)(1)(B), (b)(4)).


Sec. 449.5  [Amended]

    2. Amend Form G-405, referenced in Sec. 449.5, in Schedule I to add 
instruction 15 a, b and c to the General Instructions, to redesignate 
Questions 15-18 as Questions 16-19, and add new Question 15 to read as 
follows:

    Note: The text of Form G-405 does not appear in the Code of 
Federal Regulations.

Form G-405, Report on Finances and Operations of Government Securities 
Brokers and Dealers, Schedule I:

* * * * *

General Instructions

* * * * *
    15 a, b & c--Report whether respondent directly or indirectly 
controls, is controlled by, or is under common control with, a U.S. 
bank. If the answer is ``yes,'' provide the name of the affiliated 
bank and/or bank holding company, and describe the type of 
institution. The term ``bank'' is defined in section 3(a)(6) of the 
Securities Exchange Act of 1934.
* * * * *
    15. (a) Respondent directly or indirectly controls, is 
controlled by, or is under common control with, a U.S. bank.
(Enter applicable code: 1=Yes 2=No)________
    (b) Name of parent or affiliate________
    (c) Type of institution________
* * * * *
    Dated: January 19, 1995.
Frank N. Newman,
Deputy Secretary.
[FR Doc. 95-2135 Filed 1-27-95; 8:45 am]
BILLING CODE 4810-39-P