| The FDIC Board of Directors has approved revisions to
its policy statement on the use of offering circulars in
connection with the public distribution of bank securities.
The FDIC Board believes that the revisions to the original
policy statement will strengthen public confidence in the
banking system by providing for full disclosure in offering
circulars. The revisions are effective immediately.
The revisions update and clarify the standards in the
initial statement of policy, adopted July 2, 1979. The changes
are expected to enhance capital formation. The primary changes
pertain to:
- references for use of offering circulars in mutual-to-stock
conversions;
references for sales of securities on bank premises;
limitations on advertising activity, as well as minimum
requirements for subscription order forms; and
a revised list of essential items of disclosure.
FDIC-supervised banks and banks in organization selling securities
in their institutions should ensure that subscribers are fully
informed that the securities (1) are not FDIC-insured, (2)
are not deposits, and (3) involve investment risk, including
possible loss of principal. Bank management should review
the policy statement, which is attached, in the initial planning
stage of an offering to ensure compliance. Questions should
be directed to the FDIC's Registration and Disclosure Section
at 202-898-8902.
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