[Federal Register Volume 73, Number 75 (Thursday, April 17, 2008)]
[Rules and Regulations]
[Pages 20779-20780]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-8270]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 73, No. 75 / Thursday, April 17, 2008 / Rules
and Regulations
[[Page 20779]]
FEDERAL RESERVE SYSTEM
12 CFR Part 218
[Regulation R; Docket No. R-1274]
SECURITIES AND EXCHANGE COMMISSION
17 CFR Part 247
[Release No. 34-56501A; File No. S7-22-06]
RIN 3235-AJ74
Definitions of Terms and Exemptions Relating to the ``Broker''
Exceptions for Banks
AGENCIES: Board of Governors of the Federal Reserve System (``Board'')
and Securities and Exchange Commission (``SEC'' or ``Commission'')
(collectively, the Agencies).
ACTION: Final rule; technical amendments.
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SUMMARY: The Board and the Commission jointly are adopting technical
amendments to Regulation R, which the Agencies jointly adopted in
September 2007. Regulation R implements certain of the exceptions for
banks from the definition of the term ``broker'' in section 3(a)(4) of
the Securities Exchange Act of 1934 (``Exchange Act''), as amended by
the Gramm-Leach-Bliley Act (``GLBA''). The technical amendments correct
cross-references and other typographical errors in the regulation.
DATES: Effective Date: The technical amendments are effective April 17,
2008.
Compliance Date: As provided in 12 CFR 218.781 and 17 CFR 247.100
of Regulation R, banks are exempt from complying with Regulation R and
the ``broker'' exceptions in section 3(a)(4)(B) of the Exchange Act
until the first day of their first fiscal year that commences after
September 30, 2008.
FOR FURTHER INFORMATION CONTACT: Board: Andrea Tokheim, Counsel, (202)
452-2300, or Brian Knestout, Attorney, (202) 452-2249, Legal Division,
Board of Governors of the Federal Reserve System, 20th Street and
Constitution Avenue, NW., Washington, DC 20551. Users of
Telecommunication Device for Deaf (TDD) only, call (202) 263-4869.
SEC: Linda Stamp Sundberg, Senior Special Counsel, at (202) 551-
5550, Office of the Chief Counsel, Division of Trading and Markets,
Securities and Exchange Commission, 100 F Street, NE., Washington, DC
20549.
SUPPLEMENTARY INFORMATION:
A. Overview of Technical Amendment
In September 2007, the Board and the SEC jointly adopted a single
set of final rules called Regulation R that implement certain of the
exceptions for banks from the definition of the term ``broker'' in
section 3(a)(4) of the Exchange Act, as amended by the GLBA.\1\
Regulation R defines terms used in these statutory exceptions and
includes certain related exemptions. The Board and the SEC are jointly
adopting these technical amendments to correct certain cross-references
and typographical errors in the final rules.
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\1\ See 72 FR 56514, Oct. 3, 2007, which added parts 12 CFR 218
and 17 CFR 247 to the Code of Federal Regulations.
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In particular, paragraph (b) of Rule 701 is revised to add a colon
at the end of the paragraph.\2\ Paragraphs (a)(6) and (a)(7) of Rule
721 are redesignated as paragraphs (a)(5) and (a)(6) because there was
no numbered paragraph (a)(5). Paragraph (c)(2) of Rule 721 is revised
to correctly cross-reference paragraph (h)(2), rather than paragraph
(g)(2). Paragraph (e)(3) of Rule 723 is revised to correctly refer to
``this paragraph (e)'', rather than ``this paragraph (d)''. For
consistency, paragraphs (a)(1)(A) and (a)(1)(B) of Rule 741 are
redesignated as paragraphs (a)(1)(i) and (a)(1)(ii). Finally, paragraph
(b)(1)(i) of Rule 775 is revised to add a dash to the citation of 15
U.S.C. 80a-5(a)(1).
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\2\ The final rules adopted by the Board and the SEC within
their respective titles of the Code of Federal Regulations (12 CFR
part 218 for the Board and 17 CFR part 247 for the SEC) are
identically numbered from Sec. --.100 to Sec. --.781. For ease of
reference, the single set of final rules adopted by each Agency are
referred to in this release as Rule --, excluding title and part
designations. A similar format was used to refer to the single set
of rules issued by the Agencies.
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B. Administrative Procedure Act
The Agencies find, in accordance with sections 553(b) and (d) of
the Administrative Procedure Act,\3\ that good cause exists to make
these amendments effective upon publication in the Federal Register
without providing prior notice and an opportunity for comment.
Specifically, the Agencies find that notice and comment and a delayed
effective date are unnecessary because the amendments make only
technical changes to Regulation R and there is no substantive change on
which the public could provide meaningful comment.\4\
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\3\ 5 U.S.C. 553(b)(3)(A) and (d)(3).
\4\ For similar reasons, the amendments do not require analysis
under the Regulatory Flexibility Act or analysis of major rule
status under the Small Business Regulatory Enforcement Fairness Act.
See 5 U.S.C. 601(2) (for purposes of Regulatory Flexibility Act
analyses, the term ``rule'' means any rule for which the agency
publishes a general notice of proposed rulemaking); 5 U.S.C.
804(3)(C) (for purposes of Congressional review of agency
rulemaking, the term ``rule'' does not include any rule of agency
organization, procedure, or practice that does not substantially
affect the rights or obligations of non-agency parties).
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C. Paperwork Reduction Act
Finally, the technical amendments do not contain any new or
additional collections of information as defined by the Paperwork
Reduction Act of 1995, as amended.\5\
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\5\ 44 U.S.C. 3501.
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List of Subjects
12 CFR Part 218
Banks, Brokers, Securities.
17 CFR Part 247
Banks, Brokers, Securities.
Federal Reserve System
Authority and Issuance
0
For the reasons set forth in the preamble, the Board amends 12 CFR part
218 as set forth below:
PART 218--REGULATION R--EXCEPTIONS FOR BANKS FROM THE DEFINITION OF
BROKER IN THE SECURITIES EXCHANGE ACT OF 1934 (REGULATION R)
0
1. The Authority citation for part 218 continues to read as follows:
Authority: 15 U.S.C. 78c(a)(4)(F).
[[Page 20780]]
Securities and Exchange Commission
Authority and Issuance
0
For the reasons set forth in the preamble, the Commission amends 17 CFR
part 247 as set forth below:
PART 247--REGULATION R--EXEMPTIONS AND DEFINITIONS RELATED TO THE
EXCEPTIONS FOR BANKS FROM THE DEFINITION OF BROKER
0
2. The authority citation for part 247 continues to read as follows:
Authority: 15 U.S.C. 78c, 78o, 78q, 78w, and 78mm.
Common Rules
The common rules adopted by the Board as Part 218 of Title 12,
Chapter II of the Code of Federal Regulations and by the Commission as
Part 247 of Title 17, Chapter II of the Code of Federal Regulations are
amended as follows:
0
3. Paragraph (b) of common rule Sec. --.701 is revised to read as
follows:
Sec. --.701 Exemption from the definition of ``broker'' for certain
institutional referrals.
* * * * *
(b) Required disclosures. The disclosures provided to the high net
worth customer or institutional customer pursuant to paragraphs
(a)(2)(i) or (a)(3)(i) of this section shall clearly and conspicuously
disclose:
* * * * *
0
4. In common rule Sec. --.721, paragraphs (a)(6) and (a)(7) are
redesignated as paragraphs (a)(5) and (a)(6), respectively, and
paragraph (c)(2) is revised to read as follows:
Sec. --.721 Defined terms relating to the trust and fiduciary
activities exception from the definition of ``broker.''
* * * * *
(c) * * *
(2) Advertisement. For purposes of this section, the term
advertisement has the same meaning as in Sec. --.760(h)(2).
0
5. Paragraph (e)(3) of common rule Sec. --.723 is revised to read as
follows:
Sec. --.723 Exemptions for special accounts, transferred accounts,
foreign branches and a de minimis number of accounts.
* * * * *
(e) * * *
(3) The bank did not rely on this paragraph (e) with respect to
such account during the immediately preceding year.
Sec. --.741 [Amended]
0
6. In common rule Sec. --.741, paragraphs (a)(1)(A) and (a)(1)(B) are
redesignated as paragraphs (a)(1)(i) and (a)(1)(ii), respectively.
0
7. In common rule Sec. --.775, paragraph (b)(1)(i) is revised to read
as follows:
Sec. --.775 Exemption from the definition of ``broker'' for banks
effecting certain excepted or exempted transactions in investment
company securities.
* * * * *
(b) * * *
(1) * * *
(i) Any security issued by an open-end company, as defined by
section 5(a)(1) of the Investment Company Act (15 U.S.C. 80a-5(a)(1)),
that is registered under that Act; and
* * * * *
By order of the Board of Governors of the Federal Reserve
System, acting through the Secretary of the Board under delegated
authority, April 11, 2008.
Robert deV. Frierson,
Deputy Secretary of the Board.
Dated: April 11, 2008.
Florence Harmon,
By the Securities and Exchange Commission, Deputy Secretary.
[FR Doc. E8-8270 Filed 4-16-08; 8:45 am]
BILLING CODE 6210-01-P; 8010-01-P