For immediate release

The Federal Reserve Board today announced a clarification of the operating standards relating to customer disclosures of section 20 subsidiaries of bank holding companies. The clarification is effective March 27, 1998. The Board is modifying the customer disclosure operating standard to make clear that a section 20 subsidiary operating off bank premises may satisfy the standard by providing a one-time disclosure in writing when an investment account is opened. The clarification requires section 20 subsidiaries to provide to each of its retail customers, in writing, at the time an investment account is opened, the same minimum disclosures, and to obtain the same customer acknowledgment, as described in the Interagency Statement on Retail Sales of Nondeposit Investment Products. This clarification will relieve section 20 subsidiaries operating off the premises of depository institutions, from providing oral disclosures to retail customers on a continuing basis. The Board's notice is attached.

Summary only | Summary and final conditions (20 KB PDF)

1998 Banking and consumer regulatory policy