[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: 12CFR344.5]

[Page 338-339]
 
                       TITLE 12--BANKS AND BANKING
 
           CHAPTER III--FEDERAL DEPOSIT INSURANCE CORPORATION
 
PART 344_RECORDKEEPING AND CONFIRMATION REQUIREMENTS FOR SECURITIES 
TRANSACTIONS--Table of Contents
 
Sec. 344.5  Content and time of notification.

    Every bank effecting a securities transaction for a customer shall 
give or send, by mail, facsimile or other means of electronic 
transmission, to the customer at or before completion of the transaction 
one of the types of written notification identified below:
    (a) Broker/dealer's confirmations. (1) A copy of the confirmation of 
a broker/dealer relating to the securities transaction. A bank may 
either have the broker/dealer send the confirmation directly to the 
bank's customer or send a copy of the broker/dealer's confirmation to 
the customer upon receipt of the confirmation by the bank. If a bank 
chooses to send a copy of the broker/dealer's confirmation, it must be 
sent within one business day from the bank's receipt of the broker/
dealer's confirmation; and
    (2) If the bank is to receive remuneration from the customer or any 
other source in connection with the transaction, a statement of the 
source and amount of any remuneration to be received if such would be 
required under paragraph (b)(6) of this section; or
    (b) Written notification. A written notification disclosing:
    (1) Name of the bank;
    (2) Name of the customer;
    (3) Whether the bank is acting as agent for such customer, as agent 
for both such customer and some other person, as principal for its own 
account, or in any other capacity;
    (4) The date and time of execution, or the fact that the time of 
execution will be furnished within a reasonable time upon written 
request of the customer, and the identity, price, and number of shares 
or units (or principal amount in the case of debt securities) of the 
security purchased or sold by the customer;
    (5) The amount of any remuneration received or to be received, 
directly or indirectly, by any broker/dealer from such customer in 
connection with the transaction;
    (6)(i) The amount of any remuneration received or to be received by 
the bank from the customer, and the source and amount of any other 
remuneration received or to be received by the bank in connection with 
the transaction, unless:
    (A) Remuneration is determined pursuant to a prior written agreement 
between the bank and the customer; or
    (B) In the case of government securities and municipal securities, 
the bank received the remuneration in other than an agency transaction; 
or
    (C) In the case of open end investment company securities, the bank 
has provided the customer with a current prospectus which discloses all 
current fees, loads and expenses at or before completion of the 
transaction;
    (ii) If the bank elects not to disclose the source and amount of 
remuneration it has or will receive from a party other than the customer 
pursuant to paragraph (b)(6)(i) (A), (B), or (C) of this section, the 
written notification must disclose whether the bank has received or will 
receive remuneration from a party other than the customer, and that the 
bank will furnish within a reasonable time the source and amount of this 
remuneration upon written request of the customer. This election is not 
available, however, if, with respect to a purchase, the bank was 
participating in a distribution of that security; or, with respect to a 
sale, the bank was participating in a tender offer for that security;

[[Page 339]]

    (7) Name of the broker/dealer utilized; or where there is no broker/
dealer, the name of the person from whom the security was purchased or 
to whom the security was sold, or a statement that the bank will furnish 
this information within a reasonable time upon written request;
    (8) In the case of a transaction in a debt security subject to 
redemption before maturity, a statement to the effect that the debt 
security may be redeemed in whole or in part before maturity, that the 
redemption could affect the yield represented and that additional 
information is available upon request;
    (9) In the case of a transaction in a debt security effected 
exclusively on the basis of a dollar price:
    (i) The dollar price at which the transaction was effected; and
    (ii) The yield to maturity calculated from the dollar price, 
provided however, that this shall not apply to a transaction in a debt 
security that either has a maturity date that may be extended by the 
issuer thereof, with a variable interest payable thereon, or is an 
asset-backed security that represents an interest in or is secured by a 
pool of receivables or other financial assets that are subject 
continuously to prepayment;
    (10) In the case of a transaction in a debt security effected on the 
basis of yield:
    (i) The yield at which the transaction was effected, including the 
percentage amount and its characterization (e.g., current yield, yield 
to maturity, or yield to call) and if effected at yield to call, the 
type of call, the call date and call price;
    (ii) The dollar price calculated from the yield at which the 
transaction was effected; and
    (iii) If effected on a basis other than yield to maturity and the 
yield to maturity is lower than the represented yield, the yield to 
maturity as well as the represented yield; provided however, that this 
paragraph (b)(10) shall not apply to a transaction in a debt security 
that either has a maturity date that may be extended by the issuer with 
a variable interest rate payable thereon, or is an asset-backed security 
that represents an interest in or is secured by a pool of receivables or 
other financial assets that are subject continuously to prepayment;
    (11) In the case of a transaction in a debt security that is an 
asset-backed security, which represents an interest in or is secured by 
a pool of receivables or other financial assets that are subject 
continuously to prepayment, a statement indicating that the actual yield 
of the asset-backed security may vary according to the rate at which the 
underlying receivables or other financial assets are prepaid and a 
statement of the fact that information concerning the factors that 
affect yield (including at a minimum estimated yield, weighted average 
life, and the prepayment assumptions underlying yield) will be furnished 
upon written request of the customer; and
    (12) In the case of a transaction in a debt security, other than a 
government security, that the security is unrated by a nationally 
recognized statistical rating organization, if that is the case.