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Comptroller of the Currency, Treasury § 151.40

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Comptroller of the Currency, Treasury § 151.40 § 150.590 12 CFR Ch. I (1–1–21 Edition) § 150.590 What standards must I ob- Subpart A—Recordkeeping Requirements serve when acting in exempt fidu- ciary capacities? 151.50 What records must I maintain for se- curities transactions? You must observe principles of sound 151.60 How must I maintain my records? fiduciary administration, including those related to recordkeeping and seg- Subpart B—Content and Timing of Notice regation of assets. 151.70 What type of notice must I provide § 150.600 How may funds be invested when I effect a securities transaction for when I act in an exempt fiduciary a customer? capacity? 151.80 How do I provide a registered broker- dealer confirmation? If you act in an exempt fiduciary ca- 151.90 How do I provide a written notice? pacity under § 150.580, the funds of the 151.100 What are the alternate notice re- fiduciary account may be invested only quirements? in the following: 151.120 May I charge a fee for a notice? (a) Your accounts, deposits, obliga- Subpart C—Settlement of Securities tions, or securities. Transactions (b) Other assets as the customer may direct, provided you do not exercise 151.130 When must I settle a securities any investment discretion and do not transaction? directly or indirectly provide any in- vestment advice for the fiduciary ac- Subpart D—Securities Trading Policies and count. Procedures 151.140 What policies and procedures must I § 150.610 What disclosures must I maintain and follow for securities trans- make when acting in exempt fidu- actions? ciary capacities? 151.150 How do my officers and employees (a) If you act in an exempt fiduciary file reports of personal securities trading capacity under § 150.580 and fiduciary transactions? investments are not limited to ac- AUTHORITY: 12 U.S.C. 1462a, 1463, 1464, counts or deposits insured by the FDIC, 5412(b)(2)(B). you must include the following lan- SOURCE: 76 FR 49008, Aug. 9, 2011, unless guage in bold type on the first page of otherwise noted. any contract documents: (b) Funds invested pursuant to this § 151.10 What does this part do? agreement are not insured by the FDIC This part establishes recordkeeping merely because the trustee or custo- and confirmation requirements that dian is a Federal savings association apply when a Federal savings associa- the accounts of which are covered by tion (‘‘you’’) effects certain securities such insurance. Only investments in transactions for customers. the accounts of a Federal savings asso- ciation are insured by the FDIC, sub- § 151.20 Must I comply with this part? ject to its rules and regulations. (a) General. Except as provided under § 150.620 May I receive compensation paragraph (b) of this section, you must for acting in exempt fiduciary ca- comply with this part when: pacities? (1) You effect a securities transaction You may receive reasonable com- for a customer. pensation. (2) You effect a transaction in gov- ernment securities. PART 151—RECORDKEEPING AND (3) You effect a transaction in munic- ipal securities and are not registered as CONFIRMATION REQUIREMENTS a municipal securities dealer with the FOR SECURITIES TRANSACTIONS SEC. (4) You effect a securities transaction Sec. as fiduciary. You also must comply 151.10 What does this part do? 151.20 Must I comply with this part? with 12 CFR part 150 when you effect 151.30 What requirements apply to all trans- such a transaction. actions? (b) Exceptions—(1) Small number of 151.40 What definitions apply to this part? transactions. You are not required to 1038 VerDate Sep<11>2014 16:17 Mar 19, 2021 Jkt 253035 PO 00000 Frm 01048 Fmt 8010 Sfmt 8010 Q:\12\12V1.TXT PC31 kpayne on VMOFRWIN702 with $$_JOB Comptroller of the Currency, Treasury § 151.40 comply with §§ 151.50(b) through (d) or revolving, that by their terms con- (recordkeeping) and 151.140(a) through vert into cash within a finite time pe- (c) (policies and procedures), if you ef- riod. Asset-backed security includes any fected an average of fewer than 500 se- rights or other assets designed to en- curities transactions per year for cus- sure the servicing or timely distribu- tomers over the three prior calendar tion of proceeds to the security hold- years. You may exclude transactions in ers. government securities when you cal- Common or collective investment fund culate this average. means any fund established under 12 (2) Government securities. If you effect CFR 150.260(b) or 12 CFR 9.18. fewer than 500 government securities Completion of the transaction means: brokerage transactions per year, you (1) If the customer purchases a secu- are not required to comply with § 151.50 (recordkeeping) for those transactions. rity through or from you, except as This exception does not apply to gov- provided in paragraph (2) of this defini- ernment securities dealer transactions. tion, the time the customer pays you See 17 CFR 404.4(a). any part of the purchase price. If pay- (3) Municipal securities. If you are reg- ment is made by a bookkeeping entry, istered with the SEC as a ‘‘municipal the time you make the bookkeeping securities dealer,’’ as defined in 15 entry for any part of the purchase U.S.C. 78c(a)(30) (see 15 U.S.C. 78o–4), price. you are not required to comply with (2) If the customer purchases a secu- this part when you conduct municipal rity through or from you and pays for securities transactions. the security before you request pay- (4) Foreign branches. You are not re- ment or notify the customer that pay- quired to comply with this part when ment is due, the time you deliver the you conduct a transaction at your for- security to or into the account of the eign branch. customer. (5) Transactions by registered broker- (3) If the customer sells a security dealers. You are not required to comply through or to you, except as provided with this part for securities trans- in paragraph (4) of this definition, the actions effected by a registered broker- time the customer delivers the security dealer, if the registered broker-dealer to you. If you have custody of the secu- directly provides the customer with a rity at the time of sale, the time you confirmation. These transactions in- transfer the security from the cus- clude a transaction effected by your tomer’s account. employee who also acts as an employee (4) If the customer sells a security of a registered broker-dealer (‘‘dual through or to you and delivers the se- employee’’). curity to you before you request deliv- § 151.30 What requirements apply to ery or notify the customer that deliv- all transactions? ery is due, the time you pay the cus- tomer or pay into the customer’s ac- You must effect all transactions, in- count. cluding transactions excepted under § 151.20, in a safe and sound manner. Customer means a person or account, You must maintain effective systems including an agency, trust, estate, of records and controls regarding your guardianship, or other fiduciary ac- customers’ securities transactions. count for which you effect a securities These systems must clearly and accu- transaction. Customer does not include rately reflect all appropriate informa- a broker or dealer, or you when you: tion and provide an adequate basis for act as a broker or dealer; act as a fidu- an audit. ciary with investment discretion over an account; are a trustee that acts as § 151.40 What definitions apply to this the shareholder of record for the pur- part? chase or sale of securities; or are the Asset-backed security means a security issuer of securities that are the subject that is primarily serviced by the cash of the transaction. flows of a discrete pool of receivables Debt security means any security, or other financial assets, either fixed such as a bond, debenture, note, or any 1039 VerDate Sep<11>2014 16:17 Mar 19, 2021 Jkt 253035 PO 00000 Frm 01049 Fmt 8010 Sfmt 8010 Q:\12\12V1.TXT PC31 kpayne on VMOFRWIN702 with $$_JOB § 151.40 12 CFR Ch. I (1–1–21 Edition) other similar instrument that evi- the Investment Company Act of 1940 dences a liability of the issuer (includ- under: ing any security of this type that is (i) An individual retirement or indi- convertible into stock or a similar se- vidual pension plan qualified under the curity). Debt security also includes a Internal Revenue Code; or fractional or participation interest in (ii) A contractual or systematic these debt securities. Debt security does agreement under which the customer not include securities issued by an in- purchases at the applicable public of- vestment company registered under fering price, or redeems at the applica- the Investment Company Act of 1940, 15 ble redemption price, securities in U.S.C. 80a–1, et seq. specified amounts (calculated in secu- Government security means: rity units or dollars) at specified time (1) A security that is a direct obliga- intervals, and stating the commissions tion of, or an obligation that is guaran- or charges (or the means of calculating teed as to principal and interest by, the them) that the customer will pay in United States; connection with the purchase. (2) A security that is issued or guar- Municipal security means: anteed by a corporation in which the (1) A security that is a direct obliga- United States has a direct or indirect tion of, or an obligation guaranteed as interest if the Secretary of the Treas- to principal or interest by, a state or ury has designated the security for ex- any political subdivision, or any agen- emption as necessary or appropriate in cy or instrumentality of a state or any the public interest or for the protec- political subdivision.
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