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Offering Circulars

Accounting, Auditing, and Securities Disclosure
October 4, 1996
TO: CHIEF EXECUTIVE OFFICER 
 
SUBJECT: Revised Policy Statement on the Use of Offering Circulars in Connection With the Public Distribution of Bank Securities 
 

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. 

Nicholas J. Ketcha Jr. 

Director

 

Attachments

PDF Format (29 kb, PDF help or hard copy ), HTML Format 

Distribution

FDIC-Supervised Banks (Commercial and Savings) 

Note

Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434 ((703) 562-2200). 

Last Updated: October 4, 1996