[Federal Register: June 27, 2007 (Volume 72, Number 123)]
[Proposed Rules]
[Page 35204-35205]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27jn07-29]
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 344
RIN 3064-AD18
Extension of Time Period for Quarterly Reporting of Bank
Officers' and Certain Employees' Personal Securities Transactions
AGENCY: Federal Deposit Insurance Corporation (``FDIC'').
ACTION: Notice of proposed rule with request for comment.
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SUMMARY: The FDIC proposes to amend its rule concerning the period of
time that officers and all employees of state nonmember banks who make
or participate in investment decisions for the accounts of customers
(``certain employees'') have to report their personal securities
transactions after the end of the calendar quarter. The revision would
extend the time period from 10-business days to 30-calendar days after
the end of the calendar quarter for bank officers and certain employees
to report personal securities transactions to the bank. This revision
reflects certain developments in Federal securities regulations.
DATES: Comments on the rule must be received by August 27, 2007.
ADDRESSES: You may submit comments, by any of the following methods:
Agency Web Site: http://www.FDIC.gov/regulations/laws/federal/notices.html.
Follow instructions for submitting comments on
the Agency Web Site.
E-mail: Comments@FDIC.gov. Include ``Part 344 Revision''
on the subject line of the message.
Mail: Robert E. Feldman, Executive Secretary, Attention:
Comments, Federal Deposit Insurance Corporation, 550 17th Street, NW.,
Washington, DC 20429.
Hand Delivery: Comments may be hand delivered to the guard
station at the rear of the 550 17th Street Building (located on F
Street) on business days between 7 a.m. and 5 p.m.
Instructions: All comments received will be posted generally
without change to http://www.fdic.gov/regulations/laws/federal/propose.html
, including any personal information provided. Comments may
be inspected at the FDIC Public Information Center, Room E-1022, 3502
North Fairfax Drive, Arlington, VA 22226, between 9 a.m. and 5 p.m. on
business days.
FOR FURTHER INFORMATION CONTACT: Serena L. Owens, Chief, Planning and
Program Development, (202) 898-8996; or Anthony J. DiMilo, Trust
Examination Specialist, (202) 898-7496, in the Division of Supervision
and Consumer Protection; Julia E. Paris, Senior Attorney, (202) 898-
3821, in the Legal Division.
SUPPLEMENTARY INFORMATION:
I. Background
The FDIC's recordkeeping and confirmation requirements for
effecting securities transactions are set forth in 12 CFR part 344.
Part 344 includes a provision that state nonmember banks effecting such
transactions must establish written policies and procedures for
supervising all officers and all employees of state nonmember banks
who, in connection with their duties, make or participate in investment
decisions for the accounts of customers (``certain employees''). At the
time part 344 originally was adopted, it reflected the U.S. Securities
and Exchange Commission's (``SEC'') recommendations contained in the
Final Report of the Securities and Exchange Commission on Bank
Securities Activities (June 30, 1977) and generally was patterned after
SEC regulations.\1\ Section 344.9(a)(3) requires officers and certain
employees to report to the bank all securities transactions made by
them or on their behalf in which they have a beneficial interest within
10-business days after the end of the calendar quarter. As adopted,
this provision was intended to be comparable to the SEC's Rule 17j-1 of
the Investment Company Act of 1940, which required ``access persons''
to report personal securities transactions quarterly and originally
mandated a 10-business day period for reporting.\2\ Contemporaneous to
the FDIC's original rulemaking, the Office of the Comptroller of the
Currency (``OCC'') and the Board of Governors of the Federal Reserve
System adopted substantially similar rules concerning quarterly
reporting requirements that mandated a 10 day time period for
reporting.\3\ In 2002, the Office of the Thrift Supervision adopted a
substantially similar regulation.\4\
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\1\ 44 FR 43260 (July 24, 1979); see 45 FR 73898 (Nov. 7, 1980)
(SEC final rule 17j-1 adopting investment advisor code of ethics and
disclosure requirements for ``access persons,'' as defined by 17 CFR
270.17-j-1(a)(1)).
\2\ See 17 CFR 270.17j-1(c)(2) (1998); 45 FR 73898 (Nov. 7,
1980).
\3\ See 12 CFR 12.7(a)(4) (OCC's current rule), 12 CFR
208.34(g)(4) (FRB's current rule).
\4\ 67 FR 76299 (Dec. 12, 2002); 12 CFR 551.150(a) (OTS's
current rule).
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The SEC, in July 2004, amended Rule 17j-1 to extend the reporting
time period to 30-calendar days after the end of the calendar
quarter.\5\ The effective date of the SEC's amendments to Rule 17j-1
was August 31, 2004, with a compliance date of January 7, 2005. To
date, no federal banking agency has amended its rule to conform to the
SEC's amended Rule 17j-1 of the Investment Company Act of 1940.\6\
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\5\ 69 FR 41696 (July 9, 2004).
\6\ See 12 CFR 12.7(a)(4) (OCC's current rule), 12 CFR
208.34(g)(4) (FRB's current rule), 12 CFR 551.150(a) (OTS's final
rule). However, in OCC Interpretative Letter No. 1062 (May 2006),
the OCC granted a waiver of its 10-day reporting time period in
favor of a 30-calendar day time period in order to be consistent
with revised Rule 17j-1.
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II. Description of Proposal
Consistent with the 2004 amendments to SEC's Rule 17j-1, the FDIC
proposes to amend section 344.9(a)(3) to extend to 30-calendar days
after the end of the calendar quarter the time period for reporting
quarterly personal securities transactions. In addition, the FDIC
proposes this amendment in order to
[[Page 35205]]
promote practical and uniform recordkeeping requirements consistent
with the purpose of part 344.\7\
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\7\ See 60 FR 7111 (Feb. 7, 1995) (amending part 344 to include
express waiver authority in order to tailor application of rule to
promote practical compliance without undermining intent of part
344).
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III. Regulatory Analysis and Procedure
A. Solicitation of Comments on Use of Plain Language
Section 722 of the Gramm-Leach-Bliley Act (12 U.S.C. 4809) requires
the FDIC to use ``plain language'' in all proposed and final rules
published after January 1, 2000. The FDIC invites comments on whether
the proposal is clearly stated and effectively organized, and how the
FDIC might make the proposed text easier to understand.
B. Regulatory Flexibility Act
In accordance with section 3(a) of the Regulatory Flexibility Act
(``RFA''), 5 U.S.C. 603(a), the FDIC must publish an initial regulatory
flexibility analysis with this rulemaking or certify that the proposed
rule, if adopted, will not have a significant economic impact on a
substantial number of small entities. For purposes of the RFA analysis
or certification, financial institutions with total assets of $165
million or less are considered to be ``small entities.'' For the
reasons set forth below, the FDIC hereby certifies pursuant to 5 U.S.C.
605(b) that the proposed rule, if adopted, will not have a significant
economic impact on a substantial number of small entities. The proposed
rule would amend the FDIC's rule to extend to 30-calendar days after
the end of the calendar quarter the period of time for officers and
certain employees of state nonmember banks to report their personal
securities transactions. In effect, it would extend the existing time
period to give these individuals more latitude to report their
quarterly securities transactions and to allow state nonmember banks
more time to comply with part 344. The proposed rule does not impose
any new or different substantive requirements that are not already
imposed under part 344. Accordingly, if adopted in final form, the
proposed rule would not impose any additional burden or economic impact
on small entities.
C. Paperwork Reduction Act
No new collections of information pursuant to the Paperwork
Reduction Act (44 U.S.C. 3501 et seq.) are contained in the proposed
rule.
D. The Treasury and General Government Appropriations Act of 1999--
Assessment of Federal Rules and Policies on Families
The FDIC has determined that this proposal will not affect family
well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, enacted as part of the Omnibus
Consolidated and Emergency Supplemental Appropriations Act of 1999
(Pub. L. 105-277, 112 Stat. 2681).
List of Subjects in 12 CFR Part 344
Banks, banking, Reporting and recordkeeping requirements,
Securities, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Board of Directors
of the FDIC proposes to amend part 344 of title 12 of chapter III of
the Code of Federal Regulations 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, and 1819.
2. In Sec. 344.9, revise paragraph (a)(3) to read as follows:
Sec. 344.9 Personal securities trading reporting by bank officers and
employees.
(a) * * *
* * * * *
(3) In connection with their duties, obtain information concerning
which securities are being purchased or sold or recommend such action,
must report to the bank, within 30-calendar days after the end of the
calendar quarter, all transactions in securities made by them or on
their behalf, either at the bank or elsewhere in which they have a
beneficial interest. The report shall identify the securities purchased
or sold and indicate the dates of the transactions and whether the
transactions were purchases or sales.
* * * * *
By Order of the Board of Directors.
Dated at Washington, DC, the 19th day of June, 2007.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. E7-12239 Filed 6-26-07; 8:45 am]
BILLING CODE 6714-01-P