[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