December 16, 1997
Debra Reul, Portfolio Analyst
Financial Services Group
Duncan-Williams, Inc.
5860 Ridgeway Center Pkwy.
Memphis, TN 38120
Dear Ms. Reul:
You have asked whether Duncan-Williams may continue to safekeep
securities for its federal credit union (FCU) clients under Section
703.60 of the revised rules governing investment and deposit activities
issued by the National Credit Union Administration (NCUA) Board
in June 1997. 62 Fed. Reg. 32989 (1997). It may under an interim
final rule issued by the NCUA Board on November 24, 1997, which
further amended Section 703.60. 62 Fed. Reg. 64146 (1997).
The interim final rule replaced the prohibition against a selling
broker-dealer acting as a safekeeper with the requirement, "Any
safekeeper you [an FCU] use must be regulated or supervised by
either the Securities and Exchange Commission or a federal or
state depository institution regulatory agency." Since Duncan-Williams
is regulated by the Securities and Exchange Commission, it may
safekeep securities for FCUs.
Sincerely,
Sheila A. Albin
Associate General Counsel
GC/LH:bhs
SSIC 4660
97-1047