Seal of the Board of Governors of the Federal Reserve System
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

WASHINGTON, D. C.  20551

DIVISION OF BANKING
SUPERVISION AND REGULATION

SR 98-6 (SPE)
March 27, 1998

TO THE OFFICER IN CHARGE OF SUPERVISION AND APPROPRIATE
          SUPERVISORY AND EXAMINATION STAFF AT EACH FEDERAL
          RESERVE BANK AND TO EACH SECTION 20 SUBSIDIARY


SUBJECT: Section 20 subsidiaries--Impact on Inspections Resulting from the Replacement of "Firewalls" with Operating Standards

                    On August 22, 1997, the Federal Reserve Board announced modifications, effective October 27, 1997, to the prudential limits, or firewalls, that applied to bank holding companies (BHCs) engaged in securities underwriting and dealing activities through section 20 subsidiaries.  The modifications were enacted to eliminate those restrictions that have proven to be unduly burdensome or unnecessary in light of other laws or regulations, while consolidating the remaining restrictions in a series of operating standards.1  Most recently, the Board clarified, effective March 27, 1998, the operating standard relating to customer disclosures.  Banking organizations have raised questions concerning the ramifications of these changes and the anticipated effect on inspections of section 20 subsidiaries.  Accordingly, this letter provides guidance on the impact of these modifications for inspections of section 20 subsidiaries, and discusses certain recurring issues that have been raised.

Impact on Inspections

                    In the immediate future, during inspections of these nonbank subsidiaries examiners will continue to focus on the adequacy of the risk management process, the adequacy of operational controls, including internal controls, EDP systems and the compliance and internal audit functions, and financial analysis of earnings and capital.  Matters germane to the Federal Reserve's BHC supervision that are currently reviewed in section 20 subsidiary inspections--such as the adequacy of compliance training programs and the accuracy of the FR Y-20 reports--will continue to be reviewed going forward.  Such actions are consistent with a risk-focused approach, as well as a desire to reduce burden on the industry where possible.  Examiners will continue to endeavor to rely on the results of, but not duplicate, the examination reviews conducted by section 20 subsidiaries' primary securities regulators (i.e., the SEC and self-regulatory organizations).  Also, the portion of on-site inspections that formerly dealt with the review of policies and procedures for compliance with Board firewalls will now focus on ensuring compliance with the Board's recently adopted operating standards.  However, these reviews will be dynamic and subject to change.  As part of the process of implementing risk-focused supervision, the Federal Reserve is reviewing and revising examination procedures to better focus upon risks involved in banking and nonbanking activities, including section 20 activities.  As this process progresses, further guidance will be issued on risk-focused techniques applicable to section 20 subsidiaries.

Operating Standards - Changes from Firewalls

                    Certain requirements in the operating standards were not contained in the previous firewalls, in some cases because transactions previously prohibited in their entirety are now permitted with some restrictions.  These new requirements will be reviewed during section 20 subsidiary inspections.  For example, operating standard number 8 requires foreign banks with branches or agencies in the United States to ensure that transactions between a U.S. branch or agency and an affiliated section 20 subsidiary conform to sections 23A and 23B of the Federal Reserve Act (the FRA).  (Previously these transactions were prohibited for firms engaged in Tier II underwriting activities.2)  This new requirement will impose, on transactions between these entities, the same limitations and restrictions on funding to which U.S. banks, including U.S. bank subsidiaries of foreign banks, are already subject.  One implication of imposing these provisions on transactions between U.S. branches or agencies and the affiliated section 20 subsidiary is that comprehensive procedures must be in place to assure compliance, as discussed below. 

                    Other new requirements include the disclosure requirements of operating standard number (4)(i), which has been modified from the predecessor firewall.  Now, a section 20 subsidiary operating on bank premises is subject to the Interagency Statement on Retail Sales of Nondeposit Investment Products ("Interagency Statement") and interpretations thereunder.  In addition, a section 20 subsidiary that operates off bank premises, must provide to all of its retail customers the minimum written disclosures described in the Interagency Statement when opening an account, and obtain customer acknowledgement of receipt of those disclosures.  Also, under operating standard number 7(ii), if a section 20 subsidiary is required to furnish notice concerning its capitalization to the SEC, a copy of the notice should also be filed with the Federal Reserve System.  In addition, operating standard number 5 requires and emphasizes that intra-day extensions of credit by an affiliated banking unit to a section 20 subsidiary must be on market terms consistent with section 23B of the FRA.  In effect, the Board requires that a bank apply to a section 20 affiliate the same internal exposure limits and collateral requirements for intra-day credit that it applies to third parties.  Finally, operating standards number 1(ii) and 1(iii) note that the Board may reimpose funding, credit extension and credit enhancement firewalls, or require divestiture of the section 20 subsidiary, when capital levels of affiliated banking units have fallen below Board mandated levels and the parent organization fails to promptly restore the capital position.

                    Certain of the predecessor firewalls that had prohibited various transactions between bank subsidiaries and their section 20 affiliates were eliminated.  As a consequence, banks are now able to conduct financial transactions with securities affiliates engaged in underwriting corporate debt and equity securities.  Those financial transactions, however, must conform to the quantitative and qualitative restrictions of sections 23A and 23B of the FRA.  Accordingly, a focus of the inspection process will be to verify compliance with those statutory provisions.  Additionally, firewall restrictions on the sharing of non-public customer information have been removed; hence, care should be taken to ensure adequate "Chinese Walls" are in place to prevent violations of federal securities laws.

Sections 23A and 23B of the Federal Reserve Act

                    Sections 23A and 23B apply to certain transactions between banks, savings associations and their affiliates.  As noted above, the Board has now imposed section 23A and 23B restrictions on transactions by a U.S. branch or agency of a foreign bank with an affiliated section 20 subsidiary.3  It is emphasized that this operating standard is intended to apply to all transactions that would be subject to sections 23A and 23B (e.g., service contracts) for a U.S. bank--not only extensions of credit.

                    The Federal Reserve addresses sections 23A and 23B examination and compliance procedures applicable to banking organizations, including their section 20 subsidiaries, in Section 2020.1 of the BHC Supervision Manual.  Additionally, various sections of the Commercial Bank Examination Manual, such as section 2030.1 on Bank Dealer Activities, address examination procedures related to sections 23A and 23B of the FRA.  In addition, other federal regulatory agencies have adopted examination procedures for ensuring compliance with sections 23A and 23B.  Section 23A and 23B issues that frequently arise with respect to transactions with section 20 affiliates are discussed below.

                    Section 23A(a)(2) of the FRA4--commonly known as section 23A's "attribution rule"--states that any transaction by a bank or savings association with any person or entity shall be deemed to be a transaction with an affiliate to the extent that the proceeds of the transaction are used for the benefit of, or are transferred to, the affiliate.  Accordingly, a bank may not enter into a transaction with another affiliate or a third party in order to circumvent section 23A's restrictions and limitations on inter-affiliate transactions.  This rule, therefore, subjects a bank's transactions with customers to section 23A's quantitative and other limitations to the extent that the proceeds are transferred to or used for the benefit of a section 20 affiliate.  Accordingly, banks need to maintain systems to identify, measure and monitor transactions with affiliates or third parties in which the proceeds of the transactions are used for the benefit of or have been transferred to the section 20 affiliate.  The Federal Reserve System is currently reviewing the attribution rule as it affects a bank's transactions with customers of the section 20 affiliate, including whether an exemption from this rule may be warranted for certain transactions.

                    A bank's purchase of a security or other asset from a section 20 affiliate is a covered transaction under section 23A.  A bank's purchase of a security from an affiliate, however, is exempt from the quantitative restrictions of section 23A if the security has a "readily identifiable and publicly available market quotation and is purchased at that market quotation."5  The Board's staff has opined that this standard would be met if the price of the security were substantiated by quotations appearing in a widely disseminated news source such as the Wall Street Journal.  The Federal Reserve System is currently reviewing this interpretation to determine whether other sources would provide sufficient information on market prices to satisfy the section 23A standard.  Unless additional guidance is issued, however, a bank's purchase from an affiliate of a security with a "readily identifiable and publicly available market quotation" must meet the current interpretation of that standard.

                    The arm's length standard enumerated in section 23B(a)(1)(A) requires that transactions (including the provision of services) be on terms and under circumstances, including credit standards, that are substantially the same, or at least as favorable to the bank or savings association or its subsidiary, as those prevailing at the time for comparable transactions with or involving other nonaffiliated companies.  The new operating standard number 5 emphasizes that intra-day extensions of credit to a section 20 subsidiary by an affiliated banking unit also must be on market terms.  Examiners expect organizations to be able to demonstrate that covered transactions are in compliance with these arm's length standards.  Examiners will review transactions subject to section 23B to ensure that all terms and circumstances, including internal exposure limits, costs and collateral requirements, are comparable to those applied to third parties.

Mergers and Acquisitions

                    It is vital to closely scrutinize situations involving mergers and acquisitions of independent broker-dealers to ensure that a banking organization that has never engaged in, or owned a firm engaged in, corporate securities activities is able to make a smooth transition into the securities business consistent with the limitations placed on those activities by the Board.  In addition, the System must ensure that an independent broker-dealer being acquired understands the new regime it is operating under (i.e., the Board's revenue test and operating standards), and monitor the integration of risk management and information technology with that of the parent organization.  Accordingly, Reserve Bank staffs need to monitor closely the process of integrating independent broker-dealers into banking organizations.  To accomplish this objective, Reserve Banks have discretion in the means for maintaining quarterly contact with affected bank holding companies (i.e., teleconferences, meetings, or targeted inspections, if necessary) until the next inspection of the legal entity, or longer if warranted.  Quarterly financial reports also will need to be monitored closely to follow business trends during the assimilation process.

Other Issues

                    In certain instances, the Board has eliminated firewalls that were administrative in nature or redundant with current supervisory standards.  Although the Board has eliminated the firewall requiring an on-site inspection before section 20 subsidiaries may commence corporate debt or equity underwriting, Federal Reserve examiners will continue to conduct infrastructure reviews.  These reviews will be conducted prior to consummation, or in certain instances, shortly thereafter (as discussed above, mergers and acquisitions should be closely monitored until the next comprehensive legal entity inspection).  Similarly, the Board has eliminated the firewall that required banking organizations to adopt limits governing their total exposure (i.e., credit, investment banking, and portfolio investments) to individual issuer customers.  A formal standard requiring such limits was deemed no longer necessary because prudent risk management practices, which are now a focal point of all examinations and inspections, would require that total customer exposure limits be maintained and monitored.  Accordingly, in evaluating the risk management process at the section 20 subsidiary, examiners will review whether there are systems in place within the banking organization to adequately identify and monitor consolidated exposure.  Additionally, the Board has eliminated the firewall requiring that a BHC obtain prior approval to transfer activities into the section 20 subsidiary or establish subsidiaries.  The Board's order approving section 20 activities is based upon the application record, which includes the scope of activities and structure of proposal.  The Board's order may not be modified without concurrence of the Federal Reserve. 

                    Two of the new operating standards (number 2 and number 5) are based on firewalls to which section 20 subsidiaries engaged in Tier I securities powers under the Board's 1987 Order were not formally subject.  However, these firewalls were based on safe and sound banking practices under which all section 20 subsidiaries should operate, even without a formal condition of approval.  Going forward, all section 20 subsidiaries will be subject to the same formal operating standards.

                    The Board's August 22, 1997, action also rescinded the requirement that section 20 subsidiaries maintain adequate capital in accordance with industry norms.  Accordingly, examiners will no longer focus on a particular net liquid capital to haircuts ratio, but will instead expect a section 20 subsidiary to maintain capital levels commensurate with the risks of the activities in which it is engaged.

                    Finally, in a related matter, the Federal Reserve System's modification of Regulation Y in February 1997, added both private placement activities and riskless principal transactions to the list of activities permissible under Regulation Y.  The conditions imposed on these activities in the regulation are fewer than those imposed in specific orders approving these activities for section 20 subsidiaries.  The revised regulatory framework contained in the regulation supersedes previous orders and applies uniformly to those section 20 subsidiaries with authority to engage in private placement and riskless principal activities.

                    This guidance was developed by a group consisting of staff from the Federal Reserve Bank of New York led by Mr. James Keogh, Examining Officer, and Board staff.

Action Requested

                    Reserve Banks are instructed to distribute a copy of this SR letter to all section 20 companies.  Reserve Banks should also ensure that all appropriate supervision staff have copies of this letter and are fully informed of its contents.

                    If you should have any questions, please feel free to contact Mr. Michael G. Martinson (202)452-3640 or Mr. Michael J. Schoenfeld (202)452-2781.


Richard Spillenkothen
Director


ATTACHMENTS TRANSMITTED ELECTRONICALLY BELOW




Attachment A

SUMMARY OF THE SECTION 20 OPERATING STANDARDS


Operating Standard
Number and Summary

 
Operating Standard Description
 
  1. Capital
(i) BHC shall maintain adequate consolidated capital, and if authorized to underwrite and deal in all types of debt and equity securities, shall maintain strong consolidated capital; (ii) & (iii) the Board may reimpose the funding, credit extension and credit enhancement firewalls or order divestiture of the section 20 subsidiary, if a bank or thrift affiliate becomes less than well capitalized and the BHC fails to restore it promptly to the well capitalized level, or (for a foreign bank operating a U.S. branch or agency) if such foreign bank ceases to maintain strong capital and fails to restore it promptly on a fully consolidated basis above the minimum levels required by the Basle Capital Accord.
 
  1. Internal Controls
(i) BHCs and foreign banks shall cause subsidiary banks, thrifts and U.S. branches or agencies to adopt policies and procedures (including appropriate exposure limits) to govern participation in section 20 affiliate-underwritten or -arranged transactions; (ii) in connection with such transactions, BHCs and foreign banks shall ensure the undertaking of an independent and thorough credit evaluation and maintenance of adequate related documentation.
 
  1. Interlocks Restrictions
(i), (ii) and (iii) Directors, officers and employees of a bank or thrift subsidiary or a U.S. branch or agency of a foreign bank shall not serve as a majority of the board of directors or the CEO of an affiliated section 20 subsidiary, and vice versa, except that the manager of a branch or agency (generally considered to be the branch or agency's CEO) may act as a director of the section 20 subsidiary.
 
  1. Customer Disclosure
(i)When a new account is opened, section 20 subsidiaries shall provide retail customers with the same minimum written disclosures, and obtain the same customer acknowledgment, that would be required by the Interagency Statement on Retail Sales of Nondeposit Investment Products for accounts opened on the premises of a depository institution; (ii) a director, officer or employee of a bank, thrift or U.S. branch or agency may not provide an opinion on the value or purchase/sale advisability of an ineligible security known to being underwritten or dealt in by a section 20 affiliate unless the customer is notified of the affiliate's role.
 
  1. Intra-day Credit
Intra-day extensions of credit by a bank, thrift or U.S. branch or agency to a section 20 affiliate shall be on market terms consistent with section 23B of the FRA.
 
  1. Funding Restrictions--
    Purchases of Under-
    Written Securities
A bank, thrift or U.S. branch or agency shall not knowingly extend credit to a customer secured by or to purchase any bank-ineligible security being underwritten or which has been underwritten within the last 30 days by a section 20 affiliate, unless (i) the credit is extended pursuant to and consistent with a preexisting line of credit not established in contemplation of the underwriting, or (ii) the credit is extended in connection with clearing transactions for the section 20 affiliate.
 
  1. Reporting Requirements   
(i) BHCs and foreign banks shall submit quarterly to the appropriate Federal Reserve Bank their section 20 subsidiaries' FOCUS report filings and information to monitor compliance with the operating standards and section 20 of the Glass-Steagall Act; (ii) a copy of any required notice to the SEC by a section 20 subsidiary concerning its capitalization pursuant to 17 CFR 240.17a-11 shall be filed concurrently with the appropriate Federal Reserve Bank.
 
  1. Foreign Banks--
    Sections 23A and 23B
    of the FRA
Foreign banks shall ensure that all transactions between their U.S. branches or agencies and section 20 affiliates are conducted as if such branches or agencies were member banks.  For example, foreign banks must ensure that any extension of credit to the section 20 affiliates by their U.S. branches or agencies, and any purchases by such branches and agencies, as principal or fiduciary, of securities for which their section 20 affiliates are a principal underwriter, conform to sections 23A and 23B of the FRA, and that the branches and agencies do not advertise or suggest that they are responsible for the obligations of section 20 affiliates, consistent with section 23B(c) of the FRA.
 




Attachment B

CONDITIONS TO ORDERS

12 CFR 225.200 Conditions to Board's section 20 orders.

           (a) Introduction.  Under section 20 of the Glass-Steagall Act (12 U.S.C. 377) and section 4(c)(8) of the Bank Holding Company Act (12 U.S.C. 1843(c)(8)), a nonbank subsidiary of a bank holding company may to a limited extent underwrite and deal in securities for which underwriting and dealing by a member bank is prohibited.  Pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, these so-called section 20 subsidiaries are required to register with the SEC as broker-dealers and are subject to all the financial reporting, anti-fraud and financial responsibility rules applicable to broker-dealers.  In addition, transactions between insured depository institutions and their section 20 affiliates are restricted by sections 23A and 23B of the Federal Reserve Act (12 U.S.C. 371c and 371c-1).  The Board expects a section 20 subsidiary, like any other subsidiary of a bank holding company, to be operated prudently.  Doing so would include observing corporate formalities (such as the maintenance of separate accounting and corporate records), and instituting appropriate risk management, including independent trading and exposure limits consistent with parent company guidelines.

           (b) Conditions.  As a condition of each order approving establishment of a section 20 subsidiary, a bank holding company shall comply with the following conditions.

           (1) Capital.  (i) A bank holding company shall maintain adequate capital on a fully consolidated basis.  If operating a section 20 authorized to underwrite and deal in all types of debt and equity securities, a bank holding company shall maintain strong capital on a fully consolidated basis.

           (ii) In the event that a bank or thrift affiliate of a section 20 subsidiary shall become less than well capitalized (as defined in section 38 of the Federal Deposit Insurance Act, 12 U.S.C. 1831o), and the bank holding company shall fail to restore it promptly to the well capitalized level, the Board may, in its discretion, reimpose the funding, credit extension and credit enhancement firewalls contained in its 1989 order allowing underwriting and dealing in bank-ineligible securities,6 or order the bank holding company to divest the section 20 subsidiary.

           (iii) A foreign bank that operates a branch or agency in the United States shall maintain strong capital on a fully consolidated basis at levels above the minimum levels required by the Basle Capital Accord.  In the event that the Board determines that the foreign bank's capital has fallen below these levels and the foreign bank fails to restore its capital position promptly, the Board may, in its discretion, reimpose the funding, credit extension and credit enhancement firewalls contained in its 1990 order allowing foreign banks to underwrite and deal in bank-ineligible securities,7 or order the foreign bank to divest the section 20 subsidiary.

           (2) Internal controls.  (i) Each bank holding company or foreign bank shall cause its subsidiary banks, thrifts, branches or agencies8 to adopt policies and procedures, including appropriate limits on exposure, to govern their participation in transactions underwritten or arranged by a section 20 affiliate.

           (ii) Each bank holding company or foreign bank shall ensure that an independent and thorough credit evaluation has been undertaken in connection with participation by a bank, thrift, or branch or agency in such transactions, and that adequate documentation of that evaluation is maintained for review by examiners of the appropriate federal banking agency and the Federal Reserve.

           (3) Interlocks restriction.  (i) Directors, officers or employees of a bank or thrift subsidiary of a bank holding company, or a bank or thrift subsidiary or branch or agency of a foreign bank, shall not serve as a majority of the board of directors or the chief executive officer of an affiliated section 20 subsidiary.

           (ii) Directors, officers or employees of a section 20 subsidiary shall not serve as a majority of the board of directors or the chief executive officer of an affiliated bank or thrift subsidiary or branch or agency, except that the manager of a branch or agency may act as a director of the underwriting subsidiary.

           (iii) For purposes of this standard, the manager of a branch or agency of a foreign bank generally will be considered to be the chief executive officer of the branch or agency.

           (4) Customer disclosure.  (i) Disclosure to section 20 customers.  A section 20 subsidiary shall provide, in writing, to each of its retail customers,9 at the time an investment account is opened, the same minimum disclosures, and obtain the same customer acknowledgment, described in the Interagency Statement on Retail Sales of Nondeposit Investment Products ("Statement") as applicable in such situations.  These disclosures must be provided regardless of whether the section 20 subsidiary is itself engaged in activities through arrangements with a bank that are covered by the Statement.

           (ii) Disclosures accompanying investment advice.  A director, officer, or employee of a bank, thrift, branch or agency may not express an opinion on the value or the advisability of the purchase or the sale of a bank-ineligible security that he or she knows is being underwritten or dealt in by a section 20 affiliate unless he or she notifies the customer of the affiliate's role.

           (5) Intra-day credit.  Any intra-day extension of credit to a section 20 subsidiary by an affiliated bank, thrift, branch or agency shall be on market terms consistent with section 23B of the Federal Reserve Act.

           (6) Restriction on funding purchases of securities during underwriting period.  No bank, thrift, branch or agency shall knowingly extend credit to a customer secured by, or for the purpose of purchasing, any bank-ineligible security that a section 20 affiliate is underwriting or has underwritten within the past 30 days, unless:

           (i) The extension of credit is made pursuant to, and consistent with any conditions imposed in a preexisting line of credit that was not established in contemplation of the underwriting; or

           (ii) The extension of credit is made in connection with clearing transactions for the section 20 affiliate.

           (7) Reporting requirement.  (i) Each bank holding company or foreign bank shall submit quarterly to the appropriate Federal Reserve Bank any FOCUS report filed with the NASD or other self-regulatory organizations, and any information required by the Board to monitor compliance with these operating standards and section 20 of the Glass-Steagall Act, on forms provided by the Board.

           (ii) In the event that a section 20 subsidiary is required to furnish notice concerning its capitalization to the Securities and Exchange Commission pursuant to 17 CFR 240.17a-11, a copy of the notice shall be filed concurrently with the appropriate Federal Reserve Bank.

           (8) Foreign banks.  A foreign bank shall ensure that any extension of credit by its branch or agency to a section 20 affiliate, and any purchase by such branch or agency, as principal or fiduciary, of securities for which a section 20 affiliate is a principal underwriter, conforms to sections 23A and 23B of the Federal Reserve Act, and that its branches and agencies not advertise or suggest that they are responsible for the obligations of a section 20 affiliate, consistent with section 23B(c) of the Federal Reserve Act.



Footnotes

1.   Attachment A provides a summary and description of the eight new operating standards, and Attachment B contains the actual operating standards.  The former firewalls can be found at 62 FR 45,295 (1997), or the Board's web site:  http://www.bog.frb.fed.us/boarddocs/press/BoardActs/1997/19970822/.  Return to text

2.   A section 20 subsidiary with Tier II powers may be authorized to underwrite and deal in any debt or equity security, except mutual funds.  In contrast, section 20 firms with Tier I powers are generally limited to such activities in commercial paper, 1-4 family conventional mortgage-backed securities, consumer-related asset-backed securities, and "public purpose" municipal revenue bonds.  Return to text

3.   In applying the quantitative limitations of sections 23A and 23B, a U.S. branch or agency shall refer to the cpaital of its foreign bank parent as calculated under its home country capital standards.  However, if the home country supervisor has not adopted capital standards consistent in all respects with the Capital Accord of the Basle Committee on Banking Supervision, the branch or agency shall refer to the capital of its foreign bank parent as calculated under standards applicable to U.S. banking organizations.  Return to text

4.   Section 23A(a)(2) defines a transaction with any person (including an unaffiliated entity) to be a transaction with an affiliate if the proceeds of the transaction are used for the benefit of or transferred to, that affiliate.  For example, a loan by a bank to a customer for the purchase of securities underwritten or dealt in by the bank's section 20 affiliate could be considered a transaction with an affiliate.  The Board's August 22 notice stated that the Board may revisit this provision to determine whether an exemption may be granted.  Absent any such exemption, this would be considered a covered transaction.  Return to text

5.   Under the statute, the transaction must, nonetheless, be on terms and conditions that are consistent with safe and sound banking practices, and of course, must be a permissible bank investment.  Return to text

6.   Firewalls 5-8, 19, 21 and 22 of J.P. Morgan & Co., The Chase Manhattan Corp., Bankers Trust New York Corp., Citicorp, and Security Pacific Corp., 75 Federal Reserve Bulletin 192, 214-16 (1989).  Return to text

7.   Firewalls 5-8, 19, 21 and 22 of Canadian Imperial Bank of Commerce, The Royal Bank of Canada, Barclays PLC and Barclays Bank PLC, 76 Federal Reserve Bulletin 158, (1990).  Return to text

8.   The terms "branch" and "agency" refer to a U.S. branch and agency of a foreign bank.  Return to text

9.   For purposes of this operating standard, a retail customer is any customer that is not an "accredited investor" as defined in 17 CFR 230.501(a).  Return to text


SR letters | 1998