[Code of Federal Regulations]
[Title 12, Volume 4]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR344.2]

[Page 335]
 
                       TITLE 12--BANKS AND BANKING
 
           CHAPTER III--FEDERAL DEPOSIT INSURANCE CORPORATION
 
PART 344_RECORDKEEPING AND CONFIRMATION REQUIREMENTS FOR SECURITIES 
TRANSACTIONS--Table of Contents
 
Sec. 344.2  Exceptions.

    (a) A bank effecting securities transactions for customers is not 
subject to all or part of this part 344 to the extent that they qualify 
for one or more of the following exceptions:
    (1) Small number of transactions. The requirements of Sec. Sec. 
344.4(a) (2) through (4) and 344.8(a) (1) through (3) do not apply to a 
bank effecting an average of fewer than 200 securities transactions per 
year for customers over the prior three calendar year period. The 
calculation of this average does not include transactions in government 
securities.
    (2) Government securities. The recordkeeping requirements of Sec. 
344.4 do not apply to banks effecting fewer than 500 government 
securities brokerage transactions per year. This exemption does not 
apply to government securities dealer transactions by banks.
    (3) Municipal securities. This part does not apply to transactions 
in municipal securities effected by a bank registered with the 
Securities and Exchange Commission as a ``municipal securities dealer'' 
as defined in title 15 U.S.C. 78c(a)(30). See 15 U.S.C. 78o-4.
    (4) Foreign branches. Activities of foreign branches of a bank shall 
not be subject to the requirements of this part.
    (5) Transactions effected by registered broker/dealers. (i) This 
part does not apply to securities transactions effected for a bank 
customer by a registered broker/dealer if:
    (A) The broker/dealer is fully disclosed to the bank customer; and
    (B) The bank customer has a direct contractual agreement with the 
broker/dealer.
    (ii) This exemption extends to bank arrangements with broker/dealers 
which involve bank employees when acting as employees of, and subject to 
the supervision of, the registered broker/dealer when soliciting, 
recommending, or effecting securities transactions.
    (b) Safe and sound operations. Notwithstanding this section, every 
bank effecting securities transactions for customers shall maintain, 
directly or indirectly, effective systems of records and controls 
regarding their customer securities transactions to ensure safe and 
sound operations. The records and systems maintained must clearly and 
accurately reflect the information required under this part and provide 
an adequate basis for an audit.