[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
Federal Register
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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]
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