[Federal Register Volume 60, Number 71 (Thursday, April 13, 1995)]
[Rules and Regulations]
[Pages 18733-18734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9057]



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DEPARTMENT OF THE TREASURY

Office of the Under Secretary for Domestic Finance

17 CFR Parts 400, 403, 405 and 449


Form G-405

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

ACTION: Adoption of form amendments.

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SUMMARY: The Department of the Treasury (``Department'' or 
``Treasury'') is adopting 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 
Secs. 405.2 and 449.5 of the regulations issued under the Government 
Securities Act of 1986 (the ``Government Securities Act'' or ``GSA''). 
The amendments revise Schedule I of the FOGS Report filed with the 
Securities and Exchange Commission (``SEC'') to require registered 
government securities brokers and dealers to disclose their 
affiliations, if any, with U.S. banks. The Department is adopting the 
amendments unchanged from their proposed form.

EFFECTIVE DATE: June 12, 1995.

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

SUPPLEMENTARY INFORMATION:

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 
449.51 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 
self-regulatory organization in accordance with a 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 Sec. 402.2, among other items, on Form G-405.

    \1\17 CFR 405.2 and 17 CFR 449.5, respectively.
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    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.
    The Department published the amendments to Form G-405 in proposed 
form on January 30, 1995,2 and the comment period closed on March 
1, 1995. Treasury received no comments and these final changes to the 
form are identical to the proposed changes.

    \2\60 FR 5602 (January 30, 1995).
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    The amendments to Form G-405 add a new item 15 to request 
information about an affiliation with, or control by, a U.S. bank. 
Current items 15 through 18 become items 16 through 19, respectively. 
The new inquiry requires a yes or no response, and if the response 

[[Page 18734]]
is yes, the respondent must provide the name of the parent or affiliate 
and the type of institution. The ``General Instructions'' to Schedule I 
also are amended to refer to the definition of ``bank'' in Sec. 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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    Form G-405 is required to be submitted by registered government 
securities brokers and dealers to the SEC or to a self-regulatory 
organization according to an SEC approved plan. Financial institutions 
that have filed notice as government securities brokers and dealers are 
not required to file Form G-405.
    The disclosure of this additional information would correspond to 
similar changes made by the SEC to Form X-17A-5, also known as the 
``FOCUS'' Report, in November 1992.4 The Treasury shares the SEC's 
belief that having knowledge of the economic and financial 
characteristics of brokers and dealers, including organizational 
affiliations with U.S. banks, is useful for regulatory purposes. This 
form change will also achieve consistency with the SEC approach and 
will assure consistent treatment for all government securities brokers 
and dealers.

    \4\Securities Exchange Act Release No. 31398 (November 4, 1992), 
57 FR 53261 (November 9, 1992).
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    The amendments to Form G-405 become effective June 12, 1995. The 
Department has consulted with the National Association of Securities 
Dealers (``NASD'') regarding the implementation of the form changes. 
The Department understands that the NASD will distribute the amended 
Form G-405 to its members that are registered government securities 
brokers and dealers. Copies of the Form G-405 may also be obtained by 
contacting the NASD.

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, 17 CFR Chapter IV is 
amended as follows:

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

    1. The authority citation for Part 449 continues to read as 
follows:

    Authority: 15 U.S.C. 78o-5(a), (b)(1)(B), (b)(4).

    2. Schedule I of Form G-405 is amended to add new 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 Sec. 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 ____________

* * * * *


Secs. 400.6 and 405.3  [Amended]

    3. For each section indicated in the list above, remove the Office 
of Management and Budget control number from the parenthetical 
statement at the end of each section, and add in its place ``1535-
0089''.


Sec. 403.4  [Amended]

    4. Add at the end of Sec. 403.4 the following parenthetical:


Sec. 403.4  Customer protection--reserves and custody of securities.

(Approved by the Office of Management and Budget under control number 
1535-0089)

    Dated: April 3, 1995.
Frank N. Newman,
Deputy Secretary.
[FR Doc. 95-9057 Filed 4-12-95; 8:45 am]
BILLING CODE 4810-39-W