[Federal Register Volume 60, Number 25 (Tuesday, February 7, 1995)]
[Rules and Regulations]
[Pages 7111-7112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2858]



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 Rules and Regulations
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  Federal Register / Vol. 60, No. 25 / Tuesday, February 7, 1995 / 
Rules and Regulations  
[[Page 7111]]

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 344

RIN 3064-AB55


Recordkeeping Requirements for Securities Transactions

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Final rule.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is amending 
its regulation which establishes recordkeeping and confirmation 
requirements for securities transactions undertaken by an insured state 
nonmember bank for its customers. The amendment provides the FDIC the 
express authority to waive the requirements of the regulation for good 
cause. The purpose of the amendment is to afford the FDIC more 
flexibility in applying its regulations.

EFFECTIVE DATE: The amendment is effective February 7, 1995.

For Further Information Contact: Gerald J. Gervino, Senior Attorney, 
(202) 898-3723, or Cristeena Naser, Attorney, (202) 898-3687, Legal 
Division, FDIC, 550 17th Street, NW., Washington, DC 20429 or Curtis L. 
Vaughn, Examination Specialist, (202) 898-6759, Division of 
Supervision, FDIC, 550 17th Street NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: Part 344 generally sets forth the 
recordkeeping requirements for insured state nonmember banks effecting 
customer securities transactions whether conducted as discount or full-
service brokerage or through the bank's trust department. Part 344 
specifies the content and timing of the bank's internal records as well 
as customer statements and disclosures. An insured state nonmember bank 
involved in an arrangement with a third party selling securities on 
bank premises is generally considered subject to Part 344 if the bank 
receives transaction-based compensation. Part 344 also requires that 
banks effecting securities transactions for customers establish written 
policies and procedures for supervising securities personnel generally 
and for avoiding conflicts of interest both between the bank and its 
customers and between customers. The Office of the Comptroller of the 
Currency (OCC) and the Board of Governors of the Federal Reserve System 
(Board of Governors) have securities recordkeeping regulations that are 
virtually identical to Part 344 except that the OCC's regulations have 
specific waiver authority (12 CFR Part 12 and 12 CFR 208.8(k) 
respectively).
    Recently it has come to the FDIC's attention that some banks are 
having practical difficulty complying with Part 344 and in particular 
with Sec. 344.4 which sets forth requirements for the content of 
confirmations of customers' securities transactions effected by the 
bank. We understand that this difficulty results from developments in 
the industry. The practical difficulty in complying with Sec. 344.4 
illustrates how developments in the industry as well as changes in 
industry practice can cause a regulation to be burdensome or make 
compliance difficult.
    The FDIC is generally concerned that to the fullest extent possible 
its regulations should not impose any undue or unnecessary burden or 
expense (competitive or otherwise) on insured banks. Having the 
flexibility to readily tailor the application of a regulation to 
particular circumstances if warranted furthers that objective. In 
keeping with that goal the FDIC has therefore determined that it is 
appropriate to add express waiver authority to Part 344. The addition 
of the waiver allows an insured state nonmember bank to obtain a waiver 
of all or any part of Part 344 if the FDIC determines that there is 
good cause for a waiver to be granted. The adoption of the amendment 
will enable the FDIC to more readily adapt the application of its 
regulation to developments in the industry and changes in industry wide 
practice as well as to unique problems faced by particular 
institutions. It is the FDIC's intent to provide relief as appropriate 
taking due care not to undermine the purposes of Part 344.
    The amendment is being adopted in final form without opportunity 
for public comment pursuant to the authority of section 553(b)(A) of 
the Administrative Procedure Act (5 U.S.C. 553(b)(A)) which authorizes 
the waiver of notice and public comment in the case of procedural 
rules. The amendment will be effective immediately upon publication in 
the Federal Register. This action is taken pursuant to the authority of 
section 553(d) of the Administrative Procedure Act (5 U.S.C. 553(d)) 
which permits waiver of the 30 day delayed effective date requirement 
if a rule grants an exemption or relieves a restriction. The amendment 
is not required by section 302(b) of the Reigle Community Development 
and Regulatory Improvement Act of 1994 (Pub. L. 103-325) to be made 
effective on the first day of a calendar quarter after the date of 
publication of the amendment as the amendment does not impose 
additional reporting, disclosure or other new requirements on insured 
depository institutions.

Paperwork Reduction Act

    The final amendment does not create any new recordkeeping, 
reporting or collection of information requirements within the meaning 
of the Paperwork Reduction Act (44 U.S.C. 3500 et seq.).

List of Subjects in 12 CFR Part 344

    Insured banks, Banking, Securities transactions, Recordkeeping, 
Confirmations.

    For the reasons set forth in the preamble, Part 344 of Chapter III 
of Title 12 is amended as set forth below:

PART 344--RECORDKEEPING AND CONFIRMATION REQUIREMENTS FOR 
SECURITIES TRANSACTIONS

    1. The authority citation for Part 344 continues to read as 
follows:

    Authority: 12 U.S.C. 1817, 1818, 1819.

    2. Section 344.8 is added to read as follows:


Sec. 344.8  Waiver.

    The Board of Directors of the FDIC, in its discretion, may waive 
for good cause all or any part of this part 344.

    By Order of the Board of Directors.

    Dated at Washington, DC, this 31st day of January 1995.

[[Page 7112]] Federal Deposit Insurance Corporation.
Robert E. Feldman,
Acting Executive Secretary.
[FR Doc. 95-2858 Filed 2-6-95; 8:45 am]
BILLING CODE 6714-01-P