94-31698. Form G-FIN-4  

  • [Federal Register Volume 59, Number 247 (Tuesday, December 27, 1994)]
    [Unknown Section]
    [Page 0]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 94-31698]
    
    
    [[Page Unknown]]
    
    [Federal Register: December 27, 1994]
    
    
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    DEPARTMENT OF THE TREASURY
    
    Office of the Under Secretary for Domestic Finance
    
    17 CFR Part 449
    
    RIN 1505-AA56
    
     
    
    Form G-FIN-4
    
    AGENCY: Office of the Under Secretary for Domestic Finance, Treasury.
    
    ACTION: Proposed form amendments.
    
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    SUMMARY: The Department of the Treasury (``Department'') is proposing 
    amendments to Form G-FIN-4, which is the form that associated persons 
    of financial institutions that are government securities brokers and 
    dealers are required to file with such financial institutions, pursuant 
    to sections 15C(b)(1)(B) and (b)(4) of the Securities Exchange Act of 
    1934 (the ``Exchange Act'') (15 U.S.C. 78o-5(b)(1)(B) and(b)(4)) and 
    sections 400.4 and 449.3 of the regulations issued under the Government 
    Securities Act of 1986 (``GSA'').\1\ The amendments would update the 
    disciplinary background provisions of the form to reflect amendments to 
    the federal securities laws, and would provide the financial 
    institutions of the associated persons and the appropriate regulatory 
    authorities for the financial institutions with more useful 
    information.
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        \1\Pub. L. 99-571, 100 Stat. 3208 (1986).
    
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    DATES: Comments must be submitted on or before January 26, 1995.
    
    ADDRESSES: Comments should be sent to: Government Securities 
    Regulations Staff, Bureau of the Public Debt, Department of the 
    Treasury, 999 E Street NW., room 515, Washington, DC 20239-0001. 
    Comments received will be available for public inspection and copying 
    at the Treasury Department Library, room 5030, Main Treasury Building, 
    1500 Pennsylvania Avenue NW., Washington, DC 20220.
    
    FOR FURTHER INFORMATION CONTACT: Ken Papaj (Director), or Lee Grandy 
    (Government Securities Specialist) at 202-219-3632. (TDD for hearing 
    impaired: 202-219-3988.)
    
    SUPPLEMENTARY INFORMATION:
    
    I. Background and Analysis
    
        The Department adopted Form G-FIN-4 (Disclosure Form for Person 
    Associated with a Financial Institution Government Securities Broker or 
    Dealer) in the implementing regulations for the GSA issued on July 24, 
    1987 (52 FR 27910). Sections 400.4 and 449.3\2\ of the GSA regulations 
    require the form to be used by associated persons of financial 
    institutions that are government securities brokers and dealers to 
    provide the financial institution and the appropriate regulatory agency 
    with certain information concerning employment, residence and statutory 
    disqualification. Under the GSA regulations, associated persons that 
    have a current Form U-4 (Uniform Application for Securities Industry 
    Registration or Transfer) or Form MSD-4 (Uniform Application for 
    Municipal Securities Principal or Municipal Securities Representative 
    Associated with a Bank Municipal Securities Dealer) on file with their 
    financial institution are not required to file Form G-FIN-4. Associated 
    persons are not required to file G-FIN-4 forms with their financial 
    institutions that are exempt from filing notice as government 
    securities brokers or dealers pursuant to part 401 of the GSA 
    regulations.
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        \2\17 CFR 400.4 and 17 CFR 449.3, respectively.
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        The proposed changes to the body of Form G-FIN-4 relate to Item 17, 
    which requests information concerning the disciplinary history of the 
    associated person. The changes are being made to reflect amendments to 
    the Exchange Act by the Securities Enforcement Remedies and Penny Stock 
    Reform Act of 1990 (``Remedies Act'')\3\ and the International 
    Securities Enforcement Cooperation Act of 1990 (``ISECA'').\4\ The 
    Remedies Act gave the Securities and Exchange Commission (``SEC'') the 
    authority to seek civil monetary penalties in court proceedings and to 
    impose monetary penalties and order disgorgement in administrative 
    proceedings. The Remedies Act also provided the SEC with both temporary 
    and permanent cease and desist order authority to prevent violations of 
    securities laws. The ISECA gave the SEC the authority to bar, suspend 
    or restrict the activities of broker-dealers and the associated persons 
    or those persons seeking to become associated with a broker-dealer, 
    based upon the findings of a foreign court or foreign securities 
    authority. By amending the GSA, the ISECA also gave similar authority 
    to the appropriate regulatory agencies for financial institutions that 
    are government securities brokers or dealers regarding associated 
    persons or those persons seeking to become associated with such 
    entities.\5\ The ISECA added a definition of the term ``foreign 
    financial regulatory authority'' to section 3(a) of the Exchange 
    Act,\6\ and provided that certain types of actions taken by foreign 
    financial regulatory authorities will be deemed a statutory 
    disqualification.
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        \3\Pub. L. No. 101-429, 104 Stat. 931 (October 15, 1990).
        \4\Pub. L. No. 101-550, 104 Stat. 2713 (November 15, 1990).
        \5\15 U.S.C. 78o-5(c).
        \6\15 U.S.C. 78c(a)(52).
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        Specifically, the amendments to Form G-FIN-4 would amend question C 
    of Item 17 to add paragraph (5), which would ask the associated person 
    whether the SEC or the Commodity Futures Trading Commission (``CFTC'') 
    has ever imposed a civil money penalty on the associated person, or 
    ordered the associated person to cease and desist from any activity. 
    The new inquiry would require a yes or no response, and if the response 
    is yes, details must be provided, as is currently required for any 
    affirmative response in Item 17. The disclosure of this additional 
    information would correspond to the SEC's expanded administrative and 
    civil enforcement authorities under the Remedies Act.
        The amendments to Form G-FIN-4 would also add a definition of 
    ``foreign financial regulatory authority'' to Item 17, and would add 
    this term to question 17.D. Thus, question 17.D would now inquire 
    whether any federal regulatory agency, any state regulatory agency or 
    ``foreign financial regulatory authority'' has ever found the 
    associated person to have: made a false statement or omission or been 
    dishonest, unfair or unethical; been involved in a violation of 
    investment regulations or statutes; been the cause of an investment-
    related business having its authorization to do business denied, 
    suspended, revoked or restricted; been subject to an order concerning 
    investment-related activity; had its registration or license denied, 
    suspended, or revoked, or otherwise been prevented from associating 
    with an investment-related business, or been disciplined by the 
    restriction of its activities; or had its license as an attorney, 
    accountant or federal contractor suspended. The definition of ``foreign 
    financial regulatory authority'' which would be added to Form G-FIN-4 
    is essentially the definition the ISECA added to section 3(a)(52) of 
    the Exchange Act. Questions 17.A and 17.B would be amended to clarify 
    that the inquiries now apply to information related to foreign as well 
    as domestic courts.
        The amendments would modify Item 5 to reflect the Office of Thrift 
    Supervision as the successor to the Federal Home Loan Bank Board. Thus, 
    the ``Director, Office of Thrift Supervision'' would now be listed as 
    one of the appropriate regulatory agencies with which the financial 
    institutions may be required to file the form.
        In light of the technical changes made by the Government Securities 
    Act Amendments of 1993 to the definition of ``appropriate regulatory 
    agency'',\7\ these amendments would also make corresponding changes to 
    Item 3 of the general instructions for Form G-FIN-4.
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        \7\Pub. L. 103-202, 107 Stat. 2344 (1993).
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        These amendments would ensure that Form G-FIN-4 will provide a more 
    complete description of the associated person's disciplinary history. 
    The amendments to Form G-FIN-4 would also conform to similar changes 
    made by the National Association of Securities Dealers (``NASD'') to 
    Form U-4 in November, 1991,\8\ and by the SEC to Form BD (Uniform 
    Application for Broker-Dealer Registration) in July, 1992.\9\ The 
    Treasury was unable to propose amendments to Form G-FIN-4 at the same 
    time the NASD and SEC made changes to their respective forms since its 
    rulemaking authority under the GSA expired on October 1, 1991, and was 
    not reauthorized until December 17, 1993.\10\
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        \8\National Association of Securities Dealers Notice to Members 
    No. 91-73 (November, 1991).
        \9\Securities Exchange Act Release No. 30958 (July 27, 1992), 57 
    FR 34028 (July 31, 1992).
        \10\See supra note 7.
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        If the Department adopts the amendments to Form G-FIN-4 as 
    proposed, associated persons of financial institutions that are 
    government securities brokers or dealers would need to file amendments 
    to their existing Form G-FIN-4 to the extent that any information is 
    inaccurate or incomplete. Associated persons would need to review their 
    current Form G-FIN-4 filings to determine whether the forms contain all 
    the information required by these amendments, and if not, the 
    associated person would need to file an amendment to their G-FIN-4 with 
    the updated information. An appropriate transition period would be 
    provided for associated persons to file any required updates.
    
    II. Special Analysis
    
        Based on the very limited impact of the proposed amendments, it is 
    the Department's view that the proposed changes to Form G-FIN-4 are not 
    a ``significant regulatory action'' for the purposes of Executive Order 
    12866.
        In addition, pursuant to the Regulatory Flexibility Act (5 U.S.C. 
    601, et seq.), it is hereby certified that the amendments to Form G-
    FIN-4, if adopted, will not have a significant economic impact on a 
    substantial number of small entities and, as a result, a regulatory 
    flexibility analysis is not required.
        The collection of information in these proposed amendments to Form 
    G-FIN-4 is contained in revised Items 5 and 17 of the form. Form G-FIN-
    4 is required to be submitted by associated persons of financial 
    institutions that are government securities brokers and dealers, in 
    accordance with Secs. 400.4 and 449.3. The collection of information is 
    intended to give the financial institutions and the appropriate 
    regulatory authorities of the financial institutions a more complete 
    and meaningful description of the disciplinary history of the 
    associated person. The rule applies only to associated persons of 
    financial institutions that are not exempt from filing notice as 
    government securities brokers and dealers.
        Although the Department is proposing to add a new paragraph to an 
    existing question and modify several other questions on Form G-FIN-4, 
    and cannot be certain as to the exact impact on associated persons 
    completing the form, it does believe that the changes will not have 
    more than a de minimis effect on the amount of time necessary to 
    complete the form. The Department's most recent Paperwork Reduction Act 
    Filing with respect to Form G-FIN-4 shows an annual estimate of 800 
    respondents filing once per year, with a burden of two hours per 
    respondent. No modification is projected to the reporting burden.
        The Paperwork Reduction Act (44 U.S.C. 3504(h)) requires that 
    collections of information prescribed in proposed rules be submitted to 
    the Office of Management and Budget for review and approval. Since 
    these proposed amendments result in no increase in burden hours to 
    complete Form G-FIN-4 and more importantly do not represent any program 
    change, the submission described in the Paperwork Reduction Act is 
    inapplicable.
    
    List of Subjects in 17 CFR Part 449
    
        Banks, Banking, Brokers, Government securities, Reporting and 
    recordkeeping requirements.
    
        For the reasons set out in the preamble, it is proposed to amend 17 
    CFR part 449 as follows:
    
    PART 449--FORMS, SECTION 15C OF THE SECURITIES EXCHANGE ACT OF 1934
    
        1. The authority citation for part 449 is revised to read as 
    follows:
    
        Authority: Sec. 101, Pub. L. 99-571, 100 Stat. 3208; Sec. 4(b), 
    Pub. L. 101-432, 104 Stat. 963; Sec. 102, Sec. 106, Pub. L. 103-202, 
    107 Stat. 2344 (15 U.S.C. 78o-5(a), (b)(1)(B), (b)(4)).
    
        2. By amending Form G-FIN-4 to revise Item 5, Item 17 and the 
    general instructions to read as follows:
    
        Note: The text of Form G-FIN-4 does not appear in the Code of 
    Federal Regulations.
    
    Form G-FIN-4--Disclosure Form for Person Associated with a Financial 
    Institution Government Securities Broker or Dealer
    
    Item 5
    
    Item 17
    
    General Instructions
    
    * * * * *
        In Item 5, ``Federal Home Loan Bank Board'' would be deleted and 
    ``Director, Office of Thrift Supervision'' would be added so that the 
    modified question would read: ``To be filed with the following 
    (indicate one): Board of Governors of the Federal Reserve System * * * 
    Comptroller of the Currency * * * Federal Deposit Insurance Corporation 
    * * * Director, Office of Thrift Supervision * * * Securities and 
    Exchange Commission.''
        In Item 17, Definitions, the term ``Foreign Financial Regulatory 
    Authority'' would be added with the following meaning: ``Foreign 
    Financial Regulatory Authority--Includes any (A) foreign securities 
    authority; (B) other governmental body or foreign equivalent of a self-
    regulatory organization empowered by a foreign government to administer 
    or enforce its laws relating to the regulation of investment or 
    investment-related activities; or (C) membership organization, a 
    function of which is to regulate the participation of its members in 
    the activities listed above.''
        Item 17.A., ``in a domestic or foreign court'' would be added so 
    that the modified question would read: ``Have you, within the 10 years 
    preceding the date of this filing, been convicted of or plead guilty or 
    nolo contendere (``no contest'') in a domestic or foreign court to:''
        Item 17.B., ``domestic or foreign'' would be added so that the 
    modified question would read: ``Has any domestic or foreign court 
    ever:''
        Item 17.C.(5) would be added to read as follows: ``(5) imposed a 
    civil money penalty on you, or ordered you to cease and desist from any 
    activity?''
        Item 17.D., ``foreign financial regulatory authority'' would be 
    added so that the modified question would read: ``Has any other federal 
    regulatory agency, any state regulatory agency or foreign financial 
    regulatory authority ever:''
        Item 17.F., ``other than as reported in Items 17.A., B., or D.'' 
    would be added so that the modified question would read: ``Has any 
    foreign government, court, regulatory agency, or exchange ever entered 
    an order against you related to investments or fraud other than as 
    reported in Items 17.A., B., or D.?''
        In the general instructions to Form G-FIN-4, Items 3.b., 3.c., and 
    3.d. would be revised to read as follows:
        3.b. ``The Board of Governors of the Federal Reserve System, in the 
    case of a State member bank of the Federal Reserve System, a foreign 
    bank, an uninsured State branch or State agency of a foreign bank, a 
    commercial lending company owned or controlled by a foreign bank (as 
    such terms are used in the International Banking Act of 1978), or a 
    corporation organized or having an agreement with the Board of 
    Governors of the Federal Reserve System pursuant to section 25 or 
    section 25A of the Federal Reserve Act;''
        3.c. ``The Federal Deposit Insurance Corporation, in the case of a 
    bank insured by the Federal Deposit Insurance Corporation (other than a 
    member of the Federal Reserve System or a Federal savings bank) or an 
    insured State branch of a foreign bank (as such terms are used in the 
    International Banking Act of 1978);''
        3.d. ``The Director of the Office of Thrift Supervision, in the 
    case of a savings association (as defined in section 3(b) of the 
    Federal Deposit Insurance Act) the deposits of which are insured by the 
    Federal Deposit Insurance Corporation; and''
    
        Dated: November 18, 1994.
    Frank N. Newman,
    Deputy Secretary.
    [FR Doc. 94-31698 Filed 12-23-94; 8:45 am]
    BILLING CODE 4810-39-W
    
    
    

Document Information

Published:
12/27/1994
Department:
Treasury Department
Entry Type:
Uncategorized Document
Action:
Proposed form amendments.
Document Number:
94-31698
Dates:
Comments must be submitted on or before January 26, 1995.
Pages:
0-0 (1 pages)
Docket Numbers:
Federal Register: December 27, 1994
RINs:
1505-AA56
CFR: (1)
17 CFR 449