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Home > News & Events > Inactive Financial Institution Letters 




Inactive Financial Institution Letters 


[Federal Register: June 28, 1996 (Volume 61, Number 126)]
[Proposed Rules]               
[Page 33696-33702]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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[[Page 33696]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 335

RIN 3064-AB79

 
Securities of Nonmember Insured Banks

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is proposing 
revisions to its regulations, detailing registration and reporting 
requirements for non-member insured banks with securities required to 
be registered under section 12 of the Securities Exchange Act of 1934 
(Exchange Act). The proposal seeks to incorporate through cross 
reference the corresponding regulations of the Securities and Exchange 
Commission (SEC) into the provisions of the FDIC's securities 
regulations. Incorporation through cross reference will assure that the 
FDIC's regulations remain substantially similar to the SEC's 
regulations, as required by law. The FDIC is requesting comments on the 
cross reference to the SEC's regulations and what additional 
provisions, if any it should include in the regulation.

DATES: Comments must be received September 26, 1996.

ADDRESSES: Comments should be directed to Jerry L. Langley, Executive 
Secretary, Federal Deposit Insurance Corporation, 550 17th Street N.W., 
Washington, D.C. 20429. Comments may be hand delivered to room F-402, 
1776 F Street N.W., Washington, D.C., on business days between 8:30 
a.m. and 5:00 p.m. [FAX number (202) 898-3838, Internet address: 
comments@FDIC.gov] Comments may also be inspected in the FDIC Public 
Information Center, room 100, 801 17th Street, N.W., Washington, D.C. 
between 8:30 a.m. and 5:00 p.m. on business days.

FOR FURTHER INFORMATION CONTACT: M. Eric Dohm, Staff Accountant, 
Division of Supervision (202-898-8921), Lawrence H. Pierce, Securities 
Activities Officer, Division of Supervision (202-898-8902), or Gerald 
J. Gervino, Senior Attorney, Legal Division (202-898-3723), Federal 
Deposit Insurance Corporation, 550 17th Street N.W., Washington, D.C. 
20429.

SUPPLEMENTARY INFORMATION:

Background

    Section 12(i) of the Securities Exchange Act of 1934, as amended, 
15 U.S.C. 78l(i), grants authority to the FDIC to issue regulations 
applicable to the securities of insured banks (including foreign banks 
having an insured branch) which are neither members of the Federal 
Reserve System nor District banks (nonmember banks), which are 
substantially similar to the SEC's regulations under sections 12 
(securities registration), 13 (periodic reporting), 14(a) (proxies and 
proxy solicitation), 14(c) (information statements), 14(d) (tender 
offers), 14(f) (election of directors contests), and 16 (beneficial 
ownership and reporting) of the Exchange Act. Section 12(i) does not 
however, require the FDIC to issue substantially similar regulations in 
the event that the FDIC finds that implementation of such regulation is 
not necessarily in the public interest or appropriate for protection of 
investors and the FDIC publishes such findings with detailed reasons 
therefor in the Federal Register.
    To date, in 12 CFR part 335, the FDIC has generally maintained its 
own version of regulations pursuant to sections 12, 13, 14(a), 14(c), 
14(d), and 14(f) of the Exchange Act. In 1989, the FDIC incorporated by 
cross reference the SEC regulations governing going private 
transactions and issuer tender offers. (54 FR 53592, 12 CFR 335.409 and 
335.521). In 1992, SEC regulations under section 16 of the Exchange Act 
were incorporated by cross reference. (57 FR 4702, 12 CFR 335.401 and 
335.402). In 1994, part 335 was amended to conform with more recent 
changes in the comparable SEC regulations. In connection with its 
proposed rule, the FDIC requested comment on the desirability of 
incorporating the SEC rules by cross reference into its own rules (59 
FR 22555 (May 2, 1994)).
    The FDIC received six comment letters in response to its 
solicitation. Commentators were asked to comment upon the following: 
Should the FDIC consider proposing a revision to part 335, to 
incorporate by cross reference the comparable rules of the SEC, rather 
than continue to maintain the separate but substantially similar body 
of rules contained in part 335 as is done presently? Interested persons 
were asked to address: (1) The benefits and disadvantages of cross 
referencing as a method for assuring substantial similarity between the 
FDIC's and the SEC's regulations; (2) the potential cost savings or 
cost burden of cross referencing; (3) whether the FDIC should continue 
to review preliminary proxy materials and information statements; and 
(4) any other issues regarding a cross referencing proposal which 
commenters believe pertinent. Written comments were invited to be 
submitted during a 60-day comment period.
    All of the commenters supported cross referencing to some extent. 
Two felt that the FDIC should be careful to adopt or preserve 
regulations different from those of the SEC, where FDIC drafted 
regulations would be more appropriate for banks. None provided an 
estimate of cost savings from the cross referencing procedure. One 
commenter indicated that if this cross referencing procedure is 
adopted, the FDIC should provide notice to banks filing under part 335 
that the SEC has amended rules applicable to banks by cross reference.
    In the interest of quickly bringing its rules into similarity with 
those of the SEC, the FDIC adopted the rule amendments as they had been 
previously proposed. Since the cross referencing proposal was only 
described generally, it is now necessary to publish an express cross 
referencing proposal for comment upon the actual method and language to 
be used.
    The proposed revision would incorporate by cross reference the 
comparable rules of the SEC rather than continue to maintain the 
separate but substantially similar body of rules presently contained in 
part 335.
    12 CFR part 335 generally applies only to nonmember banks having 
one or more classes of securities required to be registered under 
section 12 of the Exchange Act. There are presently 191 banks whose 
securities are registered.

[[Page 33697]]

Proposed Revisions to Part 335

    The FDIC proposes to amend 12 CFR part 335 by incorporating through 
cross reference, the regulations of the SEC issued under sections 12, 
13, 14(a), 14(c), 14(d), and 14(f) of the Exchange Act. As a result, 
with the exception of forms filed pursuant to section 16, the FDIC's 
Exchange Act forms would be eliminated and the SEC's Exchange Act forms 
would be utilized in filings with the FDIC. All forms filed with the 
FDIC however, would be required to contain the name of the FDIC in lieu 
of that of the SEC in order to avoid confusion. The FDIC believes that 
incorporation through cross reference will make its regulations 
substantially similar to those of the SEC, as well as those of other 
federal financial institution regulatory agencies.
    The proposed revision would make appropriate SEC regulations 
applicable to persons subject to part 335, except where part 335 
contains a differing or additional requirement or exception. 
Incorporation through cross reference generally makes all SEC 
regulations, and amendments thereto, applicable to registered nonmember 
banks, unless the FDIC acts to vary the SEC's specific requirements. 
The FDIC believes that this is an effective way to assure that FDIC 
regulations issued under the Exchange Act remain substantially similar 
to the SEC's regulations. However, the FDIC will still retain the 
ability to exempt nonmember banks, through a separate FDIC rulemaking, 
from any particular SEC rule it determines should not apply to such 
banks. The FDIC also retains its rulemaking authority to subject 
nonmember banks to additional or different regulations where warranted.
    The FDIC believes that issuance of the proposed regulation would 
simplify the administration and enforcement of the disclosure 
provisions of the Exchange Act. This is the approach adopted by the 
Board of Governors of the Federal Reserve System (12 CFR 208.16), the 
Office of the Comptroller of the Currency (12 CFR 11.2), and the Office 
of Thrift Supervision (12 CFR 563d.1). Further, as registrants, 
investors, and their counsel acquire or expand their familiarity with 
SEC regulations, incorporation by cross reference should help promote 
uniformity and consistency of Exchange Act disclosure, without 
affecting the quality of the administration and enforcement of the 
provisions of the Exchange Act for which the FDIC is the appropriate 
regulatory agency.
    The FDIC's principal concern with respect to the elimination of 
FDIC forms and subsequent use of SEC forms is that filers may 
incorrectly forward the forms to the SEC. This can create embarrassment 
and legal liability on the part of the filers for unintentional failure 
to file the forms. Errors of this kind can interfere with the smooth 
and efficient administration of public filings under the Exchange Act. 
For this reason, the FDIC proposes that on all forms to be filed with 
the FDIC, the cover pages would be required to prominently display the 
name of the FDIC in lieu of that of the SEC in order to avoid confusion 
as to the appropriate filing agency.

Proposed Differences From Current Part 335 Regulations

    Following is a discussion of the significant differences between 
the FDIC's existing regulations and the SEC's regulations and 
procedures which would be incorporated by cross reference under this 
proposed rule. While there are other differences in the regulations, 
the FDIC believes them to be technical or minor in nature. If the FDIC 
adopts the proposed rule, each of these differences will be eliminated.

A. Minimum Asset Test for Registration

    The regulations of the SEC and the FDIC differ in the minimum total 
asset size of an issuing company. The company's asset size is used as 
one of the triggering criteria (in addition to the number of 
shareholders) for requiring registration of securities under section 12 
of the Exchange Act. Section 12(g) of the Exchange Act (17 U.S.C. 
781(g)) requires any issuing company with at least 500 shareholders and 
a minimum total assets of $1 million to register the class of 
securities, subject to limits, exemptions, and conditions prescribed by 
the SEC or other appropriate regulatory agency. The SEC's Rule 12g-1 
(17 CFR 240.12g-1) prescribes the minimum asset test to be $10 million 
in total assets. Currently, the FDIC rules do not alter the statutory 
standard. Incorporation of the SEC's regulations by cross reference, 
would adopt the SEC's threshold of $10 million.

B. Shareholder Proposal Rules

    The regulations of the SEC and the FDIC differ primarily with 
respect to the proponent's ownership requirements in stock of an 
issuing company, and the number of proposals which a proponent may 
present. The FDIC's rules presently require only that the proponent be 
a shareholder of the registrant, and that a proponent may submit a 
maximum of two proposals for inclusion in a registrant's annual meeting 
proxy statement. The SEC's Rule 14a-8 (17 CFR 240.14a-8) requires a 
proponent to beneficially own at least 1% or $1,000 in market value of 
securities entitled to be voted on the proposal, requires a proponent 
to have held such securities for at least one year, and permits a 
proponent to submit only one proposal for inclusion in a registrant's 
annual meeting proxy statement. Incorporation of the SEC's regulations 
by cross reference, would adopt the SEC's requirements which include 
the differences described above.

C. Certification, Suspension of Trading, and Removal From Listing by 
Exchanges; Unlisted Trading; and Related Filing Requirements

    The SEC's rules currently require a national securities exchange to 
formally certify that a registrant's security has been approved for 
listing. The SEC's rules contain provisions applicable to suspension of 
trading on a national securities exchange, withdrawal, and striking of 
a security from listing and registration. Also, SEC rules prescribe 
requirements relative to applications, changes, termination, 
suspension, or exemption of securities admitted to unlisted trading on 
a national securities exchange. The FDIC's rules currently also require 
certification by a national securities exchange, but do not contain the 
additional provisions summarized above. Incorporation of the SEC's 
regulations by cross reference, would adopt the SEC's rules on 
Certification By Exchanges (17 CFR 240.12d1-1 through 12d1-6), 
Suspension Of Trading, Withdrawal, And Striking From Listing And 
Registration (17 CFR 240.12d2-1 through 12d2-6), and Unlisted Trading 
(17 CFR 240.12f-1 through 12f-6).

D. Availability of Exchange Act Filings at Federal Reserve Banks

    FDIC regulations currently require that copies of all registration 
statements and periodic reports required by 12 CFR 335.301 through 
335.365 (exclusive of exhibits), the proxy and information statements 
required by 12 CFR 335.201, and annual reports to security holders 
required by 12 CFR 335.203 will be available for inspection at the 
Federal Reserve Bank (FRB) of the District in which the bank making the 
submission is located. The FDIC staff believes that there has been 
extremely little if any public interest in inspecting these Exchange 
Act filings at the Federal Reserve Banks. It is also believed that it 
is difficult for the public to access these filings. Adoption of this 
proposed rule would eliminate the availability of these Exchange Act 
filings at the Federal Reserve Banks. All Exchange Act filings

[[Page 33698]]

will still be available for inspection at and copies may be obtained 
from the FDIC in Washington, D.C.

Proposed Differences From SEC Regulations (Superseded SEC Regulations 
and FDIC Substituted Regulations)

    Following is a discussion of the significant differences between 
the applicable requirements assuming adoption of this proposed rule by 
FDIC, and the SEC's regulations and procedures which would be 
incorporated by cross reference. Unless any particular provisions of 
the SEC's Exchange Act regulations are specifically superseded by the 
FDIC, incorporation by cross reference would make such provisions 
applicable to nonmember banks, related parties and investors. The FDIC 
rules under 12 CFR part 335 currently contain these provisions or 
requirements and retention thereof is considered warranted. If the FDIC 
adopts this proposed rule, each of the following differences between 
the rules of the FDIC and the rules of the SEC will remain in effect.

A. Review of Proxy and Information Statements

    The SEC and the FDIC regulations differ significantly in the type 
of proxy and information statements subject to regulatory review prior 
to distribution to shareholders. The SEC requires preliminary filings 
of proxy and information statements, but only concerning those 
shareholder meetings which are other than ``routine'' annual meetings. 
In such cases, the SEC requires preliminary filings to be filed ten 
days prior to distribution to shareholders (17 CFR 240.14a-6 and 17 CFR 
240.14c-5). The FDIC however, currently requires preliminary filings 
for all shareholder meetings, and requires that the preliminary filings 
be made at least ten days before routine meetings and 15 days before 
other than routine meetings (12 CFR 335.204).
    The SEC regulations exempt proxy statements for ``routine'' annual 
meetings from the requirement of preliminary filing and advance review. 
While the FDIC receives a moderate number of ``routine'' meeting 
filings, the staff has found that it is this category of filings where 
the most fundamental errors are made. Proxy statements for ``routine'' 
annual meetings often contain more basic errors and omissions than in 
the case of ``non-routine'' meetings. In the absence of an advance 
filing, the FDIC must choose between requiring a new meeting after the 
problem is belatedly discovered or overlooking noncompliance until the 
following year. A similar problem may occur in enforcing the 
regulations with banks that misread or are negligent in interpreting 
the term ``routine''.
    Accordingly, the FDIC is proposing that its rules under 12 CFR part 
335 continue to require the filing of both routine and non-routine 
preliminary proxy materials for staff review and comment prior to their 
distribution to shareholders. The FDIC staff believes that the overall 
benefits resulting from the current requirement under 12 CFR part 335 
to file ``routine'' preliminary proxy statements, exceed the costs 
attributed to making those filings. Although the FDIC considers a 
continuation of these requirements appropriate subsequent to adoption 
of a cross referencing rule, it intends to perform a periodic 
assessment of this requirement in light of its experience and will 
propose revisions as warranted.

B. Disclosure of Extensions of Credit to Insiders

    The SEC and the FDIC regulations contain requirements for financial 
institution disclosure of loans to its insiders. SEC regulations 
generally require the disclosure of certain insider indebtedness in 
excess of $60,000 which have preferential terms, were not made in the 
ordinary course of business, or which involve more than the normal risk 
of collectibility or involve other unfavorable features. In contrast, 
since 1965, the FDIC has required: (a) disclosure of insiders' 
indebtedness on a basis substantially similar to that of the SEC, but 
without the $60,000 threshold; and (b) basic disclosure of relatively 
large extensions of credit to insiders and to insiders as a group, 
based strictly upon the amount of indebtedness.
    Even though loans to insiders are often subject to amount 
limitations in banking law and regulation, significant amounts of 
insider loans yet occur. The proposed rule would incorporate the SEC's 
indebtedness of management disclosure requirements and would also add a 
requirement to disclose large extensions of credit to insiders and to 
insiders as a group, based solely upon the amount of indebtedness. The 
FDIC staff believes that the overall benefit resulting from 
continuation of the FDIC's current disclosure requirements under 12 CFR 
part 335 is in the public interest and is appropriate to the banking 
industry.

C. Filing Fees

    The regulations of SEC include very specific requirements for the 
payment of filing fees which are applicable to and must be paid by any 
person or entity filing reports with the SEC under the Exchange Act. 
The FDIC's proposed rules will not require filing fees to be paid by 
any person, registrant, or entity making Exchange Act filings with the 
FDIC.

D. Electronic Data Gathering Analysis and Retrieval (EDGAR)

    The SEC's Regulation S-T (17 CFR part 232) requires all registrants 
to submit filings in electronic format pursuant to its EDGAR system. 
Although the FDIC is studying the feasibility of the acceptance and 
administration of electronic filings under the Exchange Act, the FDIC 
does not accept and is not proposing to accept electronic filings at 
this time.

E. Legal Proceedings

    The SEC and the FDIC regulations currently both require disclosure 
of legal proceedings in certain filings under the Exchange Act. The 
FDIC generally requires disclosure of all legal proceedings required to 
be disclosed by the SEC, and in addition, the FDIC's regulations deem 
as material and require disclosure of administrative or judicial 
proceedings arising under section 8 of the Federal Deposit Insurance 
Act. The FDIC is proposing that its rules under 12 CFR part 335 
incorporate the SEC's legal proceedings disclosure requirements by 
cross reference, and in addition, continue to deem as material and 
require disclosure of administrative or judicial proceedings arising 
under section 8 of the Federal Deposit Insurance Act. The FDIC staff 
believes that the overall benefit resulting from the explicit 
requirement to disclose proceedings arising under section 8 of the 
Federal Deposit Insurance Act is in the public interest and is 
appropriate to the banking industry.

Request for Public Comments

    The Board hereby requests comment on all aspects of the proposed 
rule, particularly those specifically mentioned above. The FDIC 
requests specific written comments from the public regarding:
    (1) The benefits and disadvantages of cross referencing as a method 
for assuring substantial similarity between FDIC and SEC regulations;
    (2) The potential cost savings or cost burden of cross referencing; 
Please include estimates of specific dollar amounts of any anticipated 
benefits, as well as amounts of transitionary and continuing costs such 
as purchase of reference aides, staff training, and any

[[Page 33699]]

necessary additional professional assistance;
    (3) Whether the FDIC should provide any specific exemptions from, 
or separate additions to the SEC's regulations;
    (4) Whether the FDIC should continue to require disclosure of 
insider extensions of credit as it currently does under its rules in 12 
CFR 335.212 Item 7(b); and
    (5) Whether the FDIC should continue to also make Exchange Act 
filings available for inspection at the Federal Reserve Banks.
    (6) The appropriate time frame for implementation of the final 
rule, including the amount of time which should pass after publication 
of the final rule before compliance with the final rule is required; 
and
    (7) Any other issues regarding the proposal which commenters 
believe would assist in this rulemaking.

Regulatory Flexibility Act

    Under section 605(b) of the Regulatory Flexibility Act (RFA) (5 
U.S.C. 605(b)), the initial regulatory flexibility analysis otherwise 
required under section 603 of the RFA (5 U.S.C. 603) is not required if 
the head of the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities 
and the agency publishes such certification in the Federal Register 
along with its general notice of proposed rulemaking. Pursuant to 
section 605(b) of the RFA, the FDIC certifies that this proposed rule 
would apply only to those banks whose securities are publicly held. 
Other covered persons include: insiders of banks; large shareholders of 
banks; and bidders for bank stock.
    These regulations will cross-reference SEC regulations. By statute 
any differences must be specifically justified through the rulemaking 
process. The regulations are functionally almost identical. They are 
issued under the same statutory authority. They share a common 
legislative purpose. The FDIC considers the applicable SEC rule, 
defining ``small entities'', a necessary standard in order to maintain 
fair and comparable regulation. The FDIC is comparing FDIC regulated 
banks and SEC regulated nonbank entities, including bank holding 
companies. The applicable SEC definition of ``small entities'' sets the 
upper limit at $5 million. The SEC has delayed raising this limit until 
it completes its current and future initiatives in this area. Any SEC 
revisions in this area should pass through to entities subject to part 
335. Currently, there are no banks below this limit filing under part 
335. Further, this rulemaking does not substantially change existing 
filing requirements for any individual. Based upon this factual 
background, the FDIC certifies that the proposed amendments will have 
no economic impact on any identifiable small entities as defined for 
the class by SEC which is the general regulator in the area.

Paperwork Reduction Act

    The collection of information in this proposed rule has been 
reviewed and approved by the Office of Management and Budget under 
control number 3064-0030 in accordance with the Paperwork Reduction Act 
of 1980 (44 U.S.C. 3501 et seq.). Comments on the accuracy of the 
burden estimate and suggestions for reducing the burden should be 
directed to the Office of Management and Budget, Paperwork Reduction 
Project (3064-0030), Washington, D.C. 20503, with copies of such 
comments to be sent to Steven F. Hanft, Office of the Executive 
Secretary, room F-400, 550 17th Street, N.W., Washington, D.C. 20429.
    This information is needed to assure compliance with the Exchange 
Act and to provide information to investors and the public about the 
condition of registered nonmember banks. The likely respondents are 
for-profit financial institutions--registered nonmember banks, as well 
as their directors, executive officers and principal shareholders. The 
total reporting burden for all collections of information in this 
regulation is currently estimated as follows:

Number of Respondents.............................................3,213
Number of Responses Per
  Respondent.......................................................1.67
Total Annual Responses............................................5,363
Hours Per Response.................................................8.60
Total Annual Burden Hours........................................46,036

    The estimated annual burden per respondent varies from 30 minutes 
to 200 hours, depending on the particular form and individual 
circumstances, with an estimated average of 8.60 hours.

Cost Benefit Analysis

    This proposed revision is generally not expected to result in 
material increases in costs and burden to respondents. Some filers, 
however, may realize an increase in costs due to an increased need for 
professional guidance in order to facilitate the making of filings 
under the Exchange Act. Any overall increase in costs resulting from 
this proposed rule should be moderate, however, due to the existing 
general familiarity with the SEC's regulations on the part of 
registrants, investors, and their counsel. Any such increase in overall 
costs should be offset by elimination of the need for potential filers 
to become familiar with two separate sets of regulations implementing 
the filing requirements of the Exchange Act.

Statutory Basis

    The revisions to the FDIC's rules under sections 12, 13, 14(a), 
14(c), 14(d), 14(f) and 16 of the Exchange Act, are being adopted by 
the FDIC pursuant to Exchange Act section 12(i).

List of Subjects in 12 CFR Part 335

    Accounting, Banks, banking, Confidential business information, 
Reporting and recordkeeping requirements, Securities.

    For the reasons set forth in the preamble, the FDIC proposes to 
revise part 335 to read as follows:

PART 335--SECURITIES OF NONMEMBER INSURED BANKS

Sec.
335.101  Scope of part, authority and OMB control number.
335.111  Forms and schedules.
335.201  Securities exempted from registration.
335.211  Registration and reporting.
335.221  Forms for registration of securities and similar matters.
335.231  Certification, suspension of trading, and removal from 
listing by exchanges.
335.241  Unlisted trading.
335.251  Forms for notification of action taken by national 
securities exchanges.
335.261  Exemptions; terminations; and definitions.
335.301  Reports of issuers of securities registered pursuant to 
section 12.
335.311  Forms for annual, quarterly, current, and other reports of 
issuers.
335.321  Maintenance of records and issuer's representations in 
connection with required reports
335.331  Acquisition statements and acquisitions of securities by 
issuers.
335.401  Solicitations of proxies.
335.501  Tender offers.
335.601  Requirements of section 16 of the Securities Exchange Act 
of 1934.
335.611  Initial statement of beneficial ownership of securities 
(Form F-7).
335.612  Statement of changes in beneficial ownership of securities 
(Form F-8).
335.613  Annual statement of beneficial ownership of securities 
(Form F-8A).
335.701  Filing requirements, public reference, and confidentiality.
335.801  Inapplicable SEC regulations; FDIC substituted regulations; 
additional information.

    Authority: 15 U.S.C. 78l(i).


Sec. 335.101  Scope of part, authority and OMB control number.

    (a) This part is issued by the Federal Deposit Insurance 
Corporation (the

[[Page 33700]]

FDIC) under section 12(i) of the Securities Exchange Act of 1934, as 
amended (15 U.S.C. 78)(the Exchange Act) and applies to all securities 
of FDIC insured banks (including foreign banks having an insured 
branch) which are neither a member of the Federal Reserve System nor a 
District bank (collectively referred to as nonmember banks) that are 
subject to the registration requirements of section 12(b) or section 
12(g) of the Exchange Act (registered nonmember banks). The FDIC is 
vested with the powers, functions, and duties vested in the Securities 
and Exchange Commission (the Commission or SEC) to administer and 
enforce the provisions of sections 12, 13, 14(a), 14(c), 14(d), 14(f), 
and 16 of the Securities Exchange Act of 1934, as amended (the Exchange 
Act)(15 U.S.C. 78l, 78m, 78n(a), 78n(c), 78n(d), 78n(f), and 78p)), 
regarding nonmember banks with one or more classes of securities 
subject to the registration provisions of sections 12(b) and 12(g).
    (b) This part generally incorporates through cross reference, the 
regulations of the SEC issued under sections 12, 13, 14(a), 14(c), 
14(d), 14(f), and 16 of the Exchange Act. References to the Commission 
are deemed to refer to the FDIC unless the context otherwise requires.
    (c) The Office of Management and Budget has reviewed and approved 
the recordkeeping and reporting required by this part (OMB control 
number 3064-0030).


Sec. 335.111  Forms and schedules.

    The Exchange Act regulations of the SEC, which are incorporated by 
cross reference under this part, require the filing of forms and 
schedules as applicable. Reference is made to SEC Exchange Act 
regulation 17 CFR
249.0-1 regarding the availability of all applicable SEC Exchange Act 
forms. Required schedules are codified and are found within the context 
of the SEC's regulations. The filings of all applicable SEC forms and 
schedules shall be made with the FDIC at the address in this section. 
They shall be titled with the name of the FDIC in substitution for the 
name of the SEC. Forms F-7 (Sec. 335.611), F-8 (Sec. 335.612), F-8A 
(Sec. 335.613), are FDIC forms which are issued under section 16 of the 
Exchange Act and can be obtained from the Registration and Disclosure 
Section, Division of Supervision, Federal Deposit Insurance 
Corporation, 550 17th Street N.W., Washington, D.C. 20429. Reference is 
also made to Sec. 335.701 for general filing requirements, public 
reference, and confidentiality provisions.


Sec. 335.201  Securities exempted from registration.

    Persons generally subject to registration requirements under 
Exchange Act section 12 and subject to this part, shall follow the 
applicable and currently effective SEC regulations relative to 
exemptions from registration issued under sections 3 and 12 of the 
Exchange Act as codified at 17 CFR 240.3a12-1 through 240.3a12-11; 
240.12a-4 through 240.12a-7; 240.12g-1 through 240.12h-4.


Sec. 335.211  Registration and reporting.

    Persons with securities subject to registration under Exchange Act 
sections 12(b) and 12(g), required to report under Exchange Act section 
13, and subject to this part shall follow the applicable and currently 
effective SEC regulations issued under section 12(b) of the Exchange 
Act as codified at 17 CFR 240.12b-1 through 240.12b-36.


Sec. 335.221  Forms for registration of securities and similar matters.

    (a) The applicable forms for registration of securities and similar 
matters are codified in subpart C of 17 CFR part 249. All forms shall 
be filed with the FDIC as appropriate and shall be titled with the name 
of the FDIC instead of the SEC.
    (b) The requirements for Financial Statements can generally be 
found in Regulation S-X (17 CFR part 210). Banks may also refer to the 
instructions for FFIEC Reports of Income and Reports of Condition when 
preparing unaudited interim statements. The requirements for 
Management's Discussion and Analysis of Financial Condition and Results 
of Operations can be found at 17 CFR 229.300. Industry Guide 3, 
Statistical Disclosure by Bank Holding Companies, is codified at 17 CFR 
229.802.
    (c) A ``small business issuer'', as defined under 17 CFR 240.12b-2, 
has the option of filing Small Business (SB) Forms (as codified in 17 
CFR part 249) in lieu of the Exchange Act forms otherwise required to 
be filed, which provide for financial and other item disclosures in 
conformance with Regulation S-B of the Securities and Exchange 
Commission (17 CFR part 228). The definition of ``small business 
issuer'', generally includes banks with annual revenues of less than 
$25 million, whose voting stock does not have a public float of $25 
million or more.


Sec. 335.231  Certification, suspension of trading, and removal from 
listing by exchanges.

    The provisions of the applicable and currently effective SEC 
regulations under section 12(d) of the Exchange Act shall be followed 
as codified at 17 CFR 240.12d1-1 through 240.12d2-2.


Sec. 335.241  Unlisted trading.

    The provisions of the applicable and currently effective SEC 
regulations under section 12(f) of the Exchange Act shall be followed 
as codified at 17 CFR 240.12f-1 through 17 CFR 240.12f-6.


Sec. 335.251  Forms for notification of action taken by national 
securities exchanges.

    The applicable forms for notification of action taken by national 
securities exchanges are codified in subpart A of 17 CFR part 249. All 
forms shall be filed with the FDIC as appropriate and shall be titled 
with the name of the FDIC instead of the SEC.


Sec. 335.261  Exemptions; terminations; and definitions.

    The provisions of the applicable and currently effective SEC 
regulations under sections 12(g) and 12(h) of the Exchange Act shall be 
followed as codified at 17 CFR 240.12g-1 through 240.12h-4.


Sec. 335.301  Reports of issuers of securities registered pursuant to 
section 12.

    The provisions of the applicable and currently effective SEC 
regulations under section 13(a) of the Exchange Act shall be followed 
as codified at 17 CFR 240.13a-1 through 240.13a-17.


Sec. 335.311  Forms for annual, quarterly, current and other reports of 
issuers.

    (a) The applicable forms for annual, quarterly, current, and other 
reports are codified in subpart D of 17 CFR part 249. All forms shall 
be filed with the FDIC as appropriate and shall be titled with the name 
of the FDIC instead of the SEC.
    (b) The requirements for Financial Statements can generally be 
found in Regulation S-X (17 CFR part 210). Banks may also refer to the 
instructions for FFIEC Reports of Income and Reports of Condition when 
preparing unaudited interim reports. The requirements for Management's 
Discussion and Analysis of Financial Condition and Results of 
Operations can be found at 17 CFR 229.300. Industry Guide 3, 
Statistical Disclosure by Bank Holding Companies, is codified at 17 CFR 
229.802.
    (c) A ``small business issuer'', as defined under 17 CFR 240.12b-2, 
has the option of filing Small Business (SB) Forms (as codified in 17 
CFR part 249) in lieu of the Exchange Act forms otherwise required to 
be filed, which provide for financial and other item disclosures in 
conformance with Regulation S-B of the Securities and

[[Page 33701]]

Exchange Commission (17 CFR part 228). The definition of ``small 
business issuer'', generally includes banks with annual revenues of 
less than $25 million, whose voting stock does not have a public float 
of $25 million or more.


Sec. 335.321  Maintenance of records and issuer's representations in 
connection with required reports.

    The provisions of the applicable and currently effective SEC 
regulations under section 13(b) of the Exchange Act shall be followed 
as codified at 17 CFR 240.13d2-1 through 240.13b2-2.


Sec. 335.331  Acquisition statements and acquisitions of securities by 
issuers.

    The provisions of the applicable and currently effective SEC 
regulations under section 13(d) and 13(e) of the Exchange Act shall be 
followed as codified at 17 CFR 240.13d-1 through 240.13e-102.


Sec. 335.401  Solicitations of proxies.

    The provisions of the applicable and currently effective SEC 
regulations under section 14(a) and 14(c) of the Exchange Act shall be 
followed as codified at 17 CFR 240.14a-1 through 17 CFR 240.14a-103 and 
17 CFR 240.14c-1 through 240.14c-101.


Sec. 335.501  Tender offers.

    The provisions of the applicable and currently effective SEC 
regulations under section 14(d), 14(e), and 14(f) of the Exchange Act 
shall be followed as codified at 17 CFR 240.14d-1 through 240.14f-1.


335.601  Requirements of section 16 of the Securities Exchange Act of 
1934.

    Persons subject to section 16 of the Act with respect to securities 
registered under this part shall follow the applicable and currently 
effective SEC regulations issued under section 16 of the Act (17 CFR 
240.16a-1 through 240.16e-1), except that the forms described in 
Sec. 335.611 (Form F-7), Sec. 335.612 (Form F-8), and Sec. 335.613 
(Form F-8A) shall be used in lieu of SEC Form 3 (17 CFR 249.103), Form 
4 (17 CFR 249.104), or Form 5 (17 CFR 249.105), respectively. Copies of 
Forms F-7, F-8, F-8A and the instructions thereto can be obtained from 
the Registration and Disclosure Section, Division of Supervision, 
Federal Deposit Insurance Corporation, 550 17th Street N.W., 
Washington, D.C. 20429.


Sec. 335.611  Initial statement of beneficial ownership of securities 
(Form F-7).

    This form shall be filed in lieu of SEC Form 3 pursuant to SEC rule 
16a-3 (17 CFR 240.16a-3) for initial statements of beneficial ownership 
of securities. The FDIC is authorized to solicit the information 
required by this form pursuant to sections 16(a) and 23(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78p and 78w) and the rules 
and regulations thereunder. SEC regulations referenced in this form are 
codified at 17 CFR 240.16a-1 through 240.16e-1.


Sec. 335.612  Statement of changes in beneficial ownership of 
securities (Form F-8).

    This form shall be filed pursuant to SEC rule 16a-3 (17 CFR 
240.16a-3) for statements of changes in beneficial ownership of 
securities. The FDIC is authorized to solicit the information required 
by this form pursuant to sections 16(a) and 23(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78p and 78w) and the rules and 
regulations thereunder. SEC regulations referenced in this form are 
codified at 17 CFR 240.16a-1 through 240.16e-1.


Sec. 335.613  Annual statement of beneficial ownership of securities 
(Form F-8A).

    This form shall be filed pursuant to SEC rule 16a-3 (17 CFR 
240.16a-3) for annual statements of beneficial ownership of securities. 
The FDIC is authorized to solicit the information required by this form 
pursuant to sections 16(a) and 23(a) of the Securities Exchange Act of 
1934 (15 U.S.C. 78p and 78w), and the rules and regulations thereunder. 
SEC regulations referenced in this form are codified at 17 CFR 240.16a-
1 through 240.16e-1.


Sec. 335.701  Filing requirements, public reference, and 
confidentiality.

    (a) Filing requirements. Unless otherwise indicated in this part, 
one original and four conformed copies of all papers required to be 
filed with the FDIC under the Exchange Act or regulations thereunder 
shall be filed at its office in Washington, D.C. Official filings made 
at the FDIC's office in Washington, D.C. should be addressed as 
follows: Attention: Registration and Disclosure Section, Division of 
Supervision, Federal Deposit Insurance Corporation, 550 17th Street 
N.W., Washington, D.C. 20429. Material may be filed by delivery to the 
FDIC through the mails or otherwise. The date on which papers are 
actually received by the FDIC shall be the date of filing thereof if 
all of the requirements with respect to the filing have been complied 
with.
    (b) Inspection. Except as provided in paragraph (c) of this 
section, all information filed regarding a security registered with the 
FDIC will be available for inspection at the Federal Deposit Insurance 
Corporation, 550 17th Street N.W., Washington, D.C.
    (c) Nondisclosure of certain information filed. Any person filing 
any statement, report, or document under the Act may make written 
objection to the public disclosure of any information contained therein 
in accordance with the procedure set forth below.
    (1) The person shall omit from the statement, report, or document, 
when it is filed, the portion thereof that it desires to keep 
undisclosed (hereinafter called the confidential portion). In lieu 
thereof, it shall indicate at the appropriate place in the statement, 
report, or document that the confidential portion has been so omitted 
and filed separately with the FDIC.
    (2) The person shall file with the copies of the statement, report, 
or document filed with the FDIC:
    (i) As many copies of the confidential portion, each clearly marked 
``Confidential Treatment'', as there are copies of the statement, 
report, or document filed with the FDIC and with each exchange, if any. 
Each copy shall contain the complete text of the item and, 
notwithstanding that the confidential portion does not constitute the 
whole of the answer, the entire answer thereto; except that in case the 
confidential portion is part of a financial statement or schedule, only 
the particular financial statement or schedule need be included. All 
copies of the confidential portion shall be in the same form as the 
remainder of the statement, report, or document;
    (ii) An application making objection to the disclosure of the 
confidential portion. Such application shall be on a sheet or sheets 
separate from the confidential portion, and shall contain:
    (A) An identification of the portion of the statement, report, or 
document that has been omitted;
    (B) a statement of the grounds of objection;
    (C) consent that the FDIC may determine the question of public 
disclosure upon the basis of the application, subject to proper 
judicial reviews;
    (D) the name of each exchange, if any, with which the statement, 
report, or document is filed;
    (iii) The copies of the confidential portion and the application 
filed in accordance with this paragraph shall be enclosed in a separate 
envelope marked ``Confidential Treatment'' and addressed to Executive 
Secretary, Federal Deposit Insurance Corporation, Washington, D.C. 
20429.
    (3) Pending the determination by the FDIC as to the objection filed 
in accordance with paragraph (c)(2)(ii) of

[[Page 33702]]

this section, the confidential portion will not be disclosed by FDIC.
    (4) If the FDIC determines that the objection shall be sustained, a 
notation to that effect will be made at the appropriate place in the 
statement, report, or document.
    (5) If the FDIC shall have determined that disclosure of the 
confidential portion is in the public interest, a finding and 
determination to that effect will be entered and notice of the finding 
and determination will be sent by registered or certified mail to the 
person.
    (6) The confidential portion shall be made available to the public:
    (i) Upon the lapse of 15 days after the dispatch of notice by 
registered or certified mail of the finding and determination of the 
FDIC described in paragraph (c)(5) of this section, if prior to the 
lapse of such 15 days the person shall not have filed a written 
statement that he intends in good faith to seek judicial review of the 
finding and determination;
    (ii) Upon the lapse of 60 days after the dispatch of notice by 
registered or certified mail of the finding and determination of the 
FDIC, if the statement described in paragraph (c)(6)(i) of this section 
shall have been filed and if a petition for judicial review shall not 
have been filed within such 60 days; or
    (iii) If such petition for judicial review shall have been filed 
within such 60 days upon final disposition, adverse to the person, of 
the judicial proceedings.
    (7) If the confidential portion is made available to the public, a 
copy thereof shall be attached to each copy of the statement, report, 
or document filed with the FDIC and with each exchange concerned.


Sec. 335.801  Inapplicable SEC regulations; FDIC substituted 
regulations; additional information.

    (a) Filing fees. Filing fees will not be charged relative to any 
filings or submissions of materials made with the FDIC pursuant to the 
cross reference to regulations of the SEC issued under sections 12, 13, 
14(a), 14(c), 14(d), 14(f), and 16 of the Exchange Act, and this part.
    (b) Electronic filings. The FDIC does not participate in the SEC's 
EDGAR (Electronic Data Gathering Analysis and Retrieval) electronic 
filing program (17 CFR part 232), and does not permit electronically 
transmitted filings or submissions of materials in electronic format to 
the FDIC.
    (c) Legal proceedings. Whenever this part or cross referenced 
provisions of the SEC regulations require disclosure of legal 
proceedings, administrative or judicial proceedings arising under 
section 8 of the Federal Deposit Insurance Act shall be deemed material 
and shall be described.
    (d) Indebtedness of management. Whenever this part or cross 
referenced provisions of the SEC regulations require disclosure of 
indebtedness of management, extensions of credit to specified persons 
in excess of ten (10) percent of the equity capital accounts of the 
bank or $5 million, whichever is less, shall be deemed material and 
shall be disclosed in addition to any other required disclosure. The 
disclosure of this material indebtedness shall include the largest 
aggregate amount of indebtedness (in dollar amounts, and as a 
percentage of total equity capital accounts at the time), including 
extensions of credit or overdrafts, endorsements and guarantees 
outstanding at any time since the beginning of the bank's last fiscal 
year and as of the latest practicable date.
    (1) If aggregate extensions of credit to all specified persons as a 
group exceeded 20 percent of the equity capital accounts of the bank at 
any time since the beginning of the last fiscal year, the aggregate 
amount of such extensions of credit shall also be disclosed.
    (2) Other loans are deemed material and shall be disclosed where:
    (i) The extension(s) of credit were not made on substantially the 
same terms, including interest rates, collateral and repayment terms as 
those prevailing at the time for comparable transactions with other 
than the specified persons;
    (ii) The extension(s) of credit were not made in the ordinary 
course of business; or
    (iii) The extension(s) of credit have involved or presently involve 
more than a normal risk of collectibility or other unfavorable features 
including the restructuring of an extension of credit, or a delinquency 
as to payment of interest or principal.
    (e) Additional information; filing of other statements in certain 
cases. (1) In addition to the information expressly required to be 
included in a statement, form, schedule or report, there shall be added 
such further material information, if any, as may be necessary to make 
the required statements, in light of the circumstances under which they 
are made, not misleading.
    (2) The FDIC may, upon the written request of the bank, and where 
consistent with the protection of investors, permit the omission of one 
or more of the statements or disclosures herein required, or the filing 
in substitution therefor of appropriate statements or disclosures of 
comparable character.
    (3) The FDIC may also require the filing of other statements or 
disclosures in addition to, or in substitution for those herein 
required in any case where such statements are necessary or appropriate 
for an adequate presentation of the financial condition of any person 
whose financial statements are required, or disclosure about which is 
otherwise necessary for the protection of investors.

    By Order of the Board of Directors.

    Dated at Washington, DC this 17th day of June, 1996.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Deputy Executive Secretary.
[FR Doc. 96-16256 Filed 6-27-96; 8:45 am]
BILLING CODE 6714-01-P


Last Updated 07/17/1999 communications@fdic.gov