[Federal Register: February 14, 1997 (Volume 62, Number 31)]
[Rules and Regulations]
[Page 6852-6860]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14fe97-2]
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 335
RIN 3064-AB79
Securities of Nonmember Insured Banks
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Final rule.
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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is revising
its regulations which prescribe 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 final rule incorporates 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.
DATES: Effective date. These revisions are effective January 1, 1998,
with the exception of Sec. 335.901, which is effective July 1, 1997.
Early compliance. These revisions may be immediately followed by
the affected party, except that the SEC's regulation regarding
proposals of security holders (17 CFR 240.14a-8), which is cross
referenced in Sec. 335.401 may not be followed prior to January 1,
1998.
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 Jamey G.
Basham, Counsel, Legal Division (202-898-7265), Federal Deposit
Insurance Corporation, 550 17th Street N.W., Washington, D.C. 20429.
SUPPLEMENTARY INFORMATION:
I. 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 (collectively referred to as
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
[[Page 6853]]
and the FDIC publishes such findings with detailed reasons therefor in
the Federal Register.
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. 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 4699, 12 CFR 335.410). In 1994, part 335 was amended to conform with
more recent changes in the comparable SEC regulations. In connection
with its 1994 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 1994
proposed rule. Commentators were asked to comment upon whether the FDIC
should 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 was done historically.
All of the six commenters supported cross referencing to some
extent. Two thought 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 in 1994 as they
had been previously proposed. Since the comprehensive cross referencing
proposal was only described generally at the time of publication of the
1994 proposed rule, it was necessary to publish an express cross
referencing proposal for public comment upon the actual method and
language to be used.
Accordingly, on June 28, 1996 (61 FR 33696) the FDIC published a
proposed revision of 12 CFR part 335 which would 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.
II. Public Comment
The Board requested public comments on all aspects of the proposed
rule which was published on June 28, 1996 (61 FR 33696). Written
comments were invited to be submitted during a 90-day comment period,
and comments were specifically requested 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 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);
(5) Whether the FDIC should continue to 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.
The FDIC received two comment letters in response to its 1996
request for comments, one from a registered nonmember bank and the
other from a public accounting firm. Both commenters generally
supported the cross referencing proposal and indicated that there
should be overall benefits to incorporation by cross reference. Both
commenters also supported continuation of the FDIC's review of
preliminary proxy statements. One commenter agreed and the other
disagreed with the proposal to adopt or preserve regulations different
from those of the SEC with respect to insider loan disclosures.
Regarding costs, one commenter suggested that any additional costs
would be far outweighed by the benefits of cross referencing, while the
other stated that there should be no significant cost in adopting the
proposed rule. Neither commenter provided an estimate of specific cost
increase nor savings resulting from the cross referencing procedure.
One commenter also indicated that the FDIC should discontinue making
Exchange Act filings available at the Federal Reserve Banks, that the
FDIC should host training seminars to assist nonmember banks'
transition to and compliance with the final rule, and that the final
rule should be effective for Exchange Act filings made after December
31, 1997.
After careful consideration of all public comments received
regarding incorporation by cross reference, the FDIC has determined to
adopt this final rule in substantially the same form as previously
proposed (61 FR 33696 (June 28, 1996)). In order to allow ample time
for transition to the cross referenced SEC regulations, the final rule
will be effective January 1, 1998. Early compliance with the SEC
regulations will be permitted, except that the SEC's regulation
regarding proposals of security holders (17 CFR 240.14a-8), which is
incorporated by cross reference in section 335.401, may not be followed
prior to January 1, 1998, the effective date. Permitting early
compliance with 17 CFR 240.14a-8 prior to the effective date of this
final rule is not considered practicable.
III. Revisions to Part 335
The FDIC is revising 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. The SEC's
regulations under section 16 of the Exchange Act were previously
incorporated by cross reference (57 FR 4699, February 7, 1992). As a
result, with the exception of forms filed pursuant to section 16, the
FDIC's separate Exchange Act forms are eliminated and the SEC's
Exchange Act forms will be utilized in filings with the FDIC. The cover
pages of all forms filed with the FDIC however, will be required to
contain the name of the FDIC in lieu of that of the SEC in order to
avoid confusion as to where filings should be made. The FDIC believes
that incorporation through cross reference will cause its regulations
to remain substantially similar to those of the SEC, as well as those
of other federal financial institution regulatory agencies.
This final rule will make appropriate SEC regulations applicable to
persons subject to part 335, except where part 335 contains a differing
or additional
[[Page 6854]]
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
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 final rule will simplify
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 final rule requires that on all forms to be filed
with the FDIC, the cover pages must 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.
The FDIC has also made one technical revision to part 335 which is
included in this final rule, but was not included in the proposed rule.
This results in the final rule including new Sec. 335.901, which
contains the provisions of presently existing Sec. 303.8(b) of the FDIC
regulations (12 CFR 303.8(b)) which are applicable to part 335. New
Sec. 335.901 contains the regulations which delegate authority to act
on certain Exchange Act disclosure matters from the FDIC Board of
Directors to the Director of the Division of Supervision. This addition
to part 335 is made as part of an agency-wide effort to streamline and
modify FDIC regulations and policies as required by section 303 of the
Riegle Community Development and Regulatory Improvement Act of 1994 (12
U.S.C. 4803). The FDIC considers the placement of the related
delegation of authority provisions into part 335 as more convenient to
users, less obscure and easier to locate, and generally a more
appropriate location than their current location in 12 CFR 303.8(b). A
technical revision has been made to the language of the delegation. The
303.8(b) language covers disclosure matters under and pursuant to part
335, which necessarily includes disclosure matters under and pursuant
to section 16 of the Securities Exchange Act of 1934; however, where
the 303.8(b) language also refers to sections 12, 13, and 14 of the
Securities Exchange Act of 1934, it omits reference to section 16. In
the interests of consistency, a reference to section 16 has been added.
IV. 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 are incorporated by cross reference under this final
rule. While there are other differences in the regulations, the FDIC
believes them to be technical or minor in nature. Upon the FDIC's
adoption of this final rule, each of these differences is eliminated.
A. Minimum Asset Test for Registration
The regulations of the SEC and the existing regulations of the FDIC
differ in establishing 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 (15 U.S.C. 78l(g)) requires any
issuing company with at least 500 shareholders and 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, while current
FDIC regulations do not alter the statutory standard. This final rule
incorporates by cross reference the SEC's minimum asset test 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 have beneficially ownership of 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. This final rule
incorporates the SEC's requirements by cross reference, 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. This final rule incorporates by
cross reference, 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
[[Page 6855]]
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 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. This final rule eliminates the availability of these Exchange
Act filings at the Federal Reserve Banks. All Exchange Act filings will
remain available for inspection at and copies may be obtained from the
FDIC in Washington, D.C.
V. Differences Between FDIC and SEC Regulations (Superseded SEC
Regulations and FDIC Substituted Regulations)
Following is a discussion of the significant differences between
the applicable requirements of this final rule, and the SEC's
regulations and procedures which will generally be applicable as a
result of incorporation 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. Through the adoption of this final 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 ``non-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 the resulting
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, this final rule continues to require the filing of
both ``routine'' and ``non-routine'' preliminary proxy materials for
FDIC 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.
B. Disclosure of Extensions of Credit to Insiders
The SEC and the FDIC regulations both contain requirements for
financial institution disclosure of loans to 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. This final rule incorporates by reference the
SEC's indebtedness of management disclosure requirements and also adds
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 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.
This final rule does 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, this final
rule does not permit and the FDIC does not 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. This final rule incorporates the SEC's legal proceedings
disclosure requirements by cross reference, and in addition, continues
to deem as material and requires 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.
VI. Regulatory Flexibility Act
Under section 605(b) of the Regulatory Flexibility Act (RFA) (5
U.S.C. 605(b)), the final regulatory flexibility analysis otherwise
required under section 604 of the RFA (5 U.S.C. 604) 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 or at the time of
publication of the final rule. Pursuant to section 605(b) of the RFA,
the FDIC certifies that this final rule would apply
[[Page 6856]]
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.
There were no significant issues raised by public commenters in
response to the Regulatory Flexibility Act certification contained in
the notice of proposed rulemaking. Accordingly, no related changes have
been made to the regulations as proposed.
The regulations contained in this final rule will incorporate SEC
regulations by cross reference. By statute, any differences must be
specifically justified through the rulemaking process. The SEC and FDIC
regulations are functionally almost identical, they are issued under
the same statutory authority, and 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 revisions to part 335 contained in this
final rule 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.
VII. Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA) (Pub. L. 104-121) provides generally for agencies to report
rules to Congress and for Congress to review the rules. The reporting
requirement is triggered when agencies issue a final rule as defined by
the Administrative Procedure Act (APA) at 5 U.S.C. 551. Because the
FDIC is issuing a final rule as defined by the APA, the FDIC will file
the reports required by SBREFA.
The Office of Management and Budget has determined that this final
revision to part 335 does not constitute a ``major rule'' as defined by
SBREFA.
VIII. Paperwork Reduction Act
The collection of information in this final rule has been reviewed
and approved by the Office of Management and Budget (OMB) 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 as most recently approved by OMB for all
collections of information in this regulation is as follows:
Number of Respondents: 4,368.
Number of Responses Per Respondent: 1.42.
Total Annual Responses: 6,214.
Hours Per Response: 8.90.
Total Annual Burden Hours: 55,276.
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 8.90 hours.
IX. Cost Benefit Analysis
This final rule 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 final
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.
X. Statutory Basis
The revisions to the FDIC's regulation 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 revises 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 statements 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.
335.901 Delegation of authority to the Director (DOS) and to the
associate directors, regional directors and deputy regional
directors to act on matters with respect to disclosure laws and
regulations.
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 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
[[Page 6857]]
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 78(p)), 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 335 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 in 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 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 Exchange
Commission (17 CFR part 228). The definition of ``small business
issuer,'' generally includes banks with annual revenues of less than
$25
[[Page 6858]]
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 240.13b2-1 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 240.14a-103 and
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(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, Disclosure, and Securities Operations Unit, 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, Disclosure, and Securities Operations
Unit, 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 designated FDIC office 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 a written
objection to the public disclosure of any information contained therein
in accordance with the procedure set forth in this paragraph (c).
(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 the case
where 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 this section, the
confidential portion will not be disclosed by FDIC.
[[Page 6859]]
(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 was 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 was not made in the ordinary course
of business; or
(iii) The extension(s) of credit has involved or presently involves
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) Proxy material required to be filed. (1) Three preliminary
copies of each information statement, proxy statement, form of proxy,
and other item of soliciting material to be furnished to security
holders concurrently therewith, shall be filed with the FDIC by the
bank or any other person making a solicitation subject to 12 CFR
335.401 at least ten calendar days (or 15 calendar days in the case of
other than routine meetings, as defined in paragraph (e)(2) of this
section) prior to the date such item is first sent or given to any
security holders, or such shorter date as may be authorized.
(2) For the purposes of this paragraph (e), a routine meeting
means:
(i) A meeting with respect to which no one is soliciting proxies
subject to Sec. 335.401 other than on behalf of the bank, and at which
the bank intends to present no matters other than:
(A) The election of directors;
(B) The election, approval or ratification of accountants;
(C) A Security holder proposal included pursuant to SEC Rule 14(a)-
8 (17 CFR 240.14a-8); and
(D) The approval or ratification of a plan as defined in paragraph
(a)(7)(ii) of Item 402 of SEC Regulation S-K (17 CFR 229.402(a)(7)(ii))
or amendments to such a plan; and
(ii) The bank does not comment upon or refer to a solicitation in
opposition (as defined in 17 CFR 240.14a-6) in connection with the
meeting in its proxy material.
(3) Where preliminary copies of material are filed with the FDIC
under this section, the printing of definitive copies for distribution
to security holders should be deferred until the comments of the FDIC's
staff have been received and considered.
(f) 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.
Sec. 335.901 Delegation of authority to the Director (DOS) and to the
associate directors, regional directors and deputy regional directors
to act on matters with respect to disclosure laws and regulations.
(a) Except as provided in paragraph (b) of this section, authority
is delegated to the Director, Division of Supervision (DOS), and where
confirmed in writing by the director, to an associate director, or to
the appropriate regional director or
[[Page 6860]]
deputy regional director, to act on disclosure matters under and
pursuant to sections 12, 13, 14 and 16 of the Securities Exchange Act
of 1934 (15 U.S.C. 78) or this part.
(b) Authority to act on disclosure matters is retained by the FDIC
Board of Directors when such matters involve:
(1) Exemption from disclosure requirements pursuant to section
12(h) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(h)); or
(2) Exemption from tender offer requirements pursuant to section
14(d)(8) of the Securities Exchange Act of 1934 (15 U.S.C. 78n(d)(8)).
By Order of the Board of Directors.
Dated at Washington, D.C. this 4th day of February, 1997.
Federal Deposit Insurance Corporation.
Jerry L. Langley,
Executive Secretary.
[FR Doc. 97-3596 Filed 2-13-97; 8:45 am]
BILLING CODE 6714-01-P
