[Federal Register Volume 60, Number 71 (Thursday, April 13, 1995)]
[Rules and Regulations]
[Pages 18734-18736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9056]
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DEPARTMENT OF THE TREASURY
17 CFR Part 449
Form G-FIN-4
AGENCY: Office of the Under Secretary for Domestic Finance, Treasury.
ACTION: Adoption of form amendments.
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SUMMARY: The Department of the Treasury (``Department'' or
``Treasury'') is adopting 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(a), (b)(1)(B) and (b)(4) of the
Securities Exchange Act of 1934 (the ``Exchange Act'') (15 U.S.C. 78o-
5(a), (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''). The amendments update the disciplinary background provisions
of the form to reflect amendments to the federal securities laws, and
provide the financial institutions of the associated persons and the
appropriate regulatory authorities for the financial institutions with
more useful information. The Department is adopting the amendments
unchanged from their proposed form.
EFFECTIVE DATE: June 12, 1995.
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 449.31 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 institutions and the appropriate
regulatory agencies 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
[[Page 18735]]
G-FIN-4. Associated persons are not required to file G-FIN-4 forms with
their financial institutions if the institutions are exempt from filing
notice as government securities brokers or dealers pursuant to Part 401
of the GSA regulations.
\1\17 CFR 400.4 and 17 CFR 449.3, respectively.
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The Department published the amendments to Form G-FIN-4 in proposed
form on December 27, 1994,2 and the comment period closed on
January 26, 1995. Treasury received no comments in response to the
proposed changes.
\2\59 FR 66496 (December 27, 1994).
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The 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 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
\3\Pub. L. No. 101-429, 104 Stat. 931 (October 15, 1990). 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.
\4\Pub. L. No. 101-550, 104 Stat. 2713 (November 15, 1990). The
ISECA gave the SEC the authority to bar, suspend or restrict the
activities of broker-dealers and 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. The ISECA also provided that certain types of actions
taken by foreign financial regulatory authorities will be deemed a
statutory disqualification.
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Specifically, the amendments to Form G-FIN-4 amend question C of
Item 17 to add paragraph (5), which asks 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 disclosure
of this additional information corresponds to the SEC's expanded
administrative and civil enforcement authorities under the Remedies
Act.
The amendments to Form G-FIN-4 also add a definition of ``foreign
financial regulatory authority''5 to Item 17, and add this term to
question 17.D. Thus, question 17.D. now inquires whether the associated
person has ever been the subject of a finding by any federal regulatory
agency, any state regulatory agency or ``foreign financial regulatory
authority''. The definition of ``foreign financial regulatory
authority'' 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. have been amended to clarify that the inquiries now apply to
information related to foreign as well as domestic courts.
\5\15 U.S.C. 78c(a)(52).
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Any associated person that determines that additional disclosure is
required under revised Item 17 will need to file an amendment to Form
G-FIN-4 on or promptly after the effective date of the Form amendments.
See part II below for discussion of new filing requirements.
The amendments also 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'' is now 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'',6 the amendments also make corresponding changes to Item
3 of the general instructions for Form G-FIN-4.
\6\Pub. L. No. 103-202, 107 Stat. 2344 (1993).
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These amendments 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 also conform to similar changes made by
the National Association of Securities Dealers (``NASD'') to Form U-4
in November 1991,7 and by the SEC to Form BD (Uniform Application
for Broker-Dealer Registration) in July 1992.8
\7\National Association of Securities Dealers Notice to Members
No. 91-73 (November, 1991).
\8\Securities Exchange Act Release No. 34-30958 (July 27, 1992),
57 FR 34028 (July 31, 1992).
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II. Filing Instructions
The amendments to Form G-FIN-4 become effective June 12, 1995.
Thus, all new associated persons of financial institutions that are
government securities brokers and dealers filing on or after that date
will be required to file the revised Form G-FIN-4 with their
institutions, though those filing before the effective date are
encouraged to use the revised form. In addition, associated persons
that have previously filed a G-FIN-4 should review their G-FIN-4
filings to determine whether they contain all of the information
required by amended Item 17. To the extent that revisions to Form G-
FIN-4 result in an affirmative answer to a question in Item 17,
associated persons will be required to file with their institution an
amendment to their Form G-FIN-4 by June 12, 1995 (or as soon as
possible after that date). Financial institution government securities
brokers or dealers are required to file the new or revised G-FIN-4
forms with their appropriate regulatory agency in accordance with
section 400.4(d)(1). Associated persons who answer ``no'' to all of the
questions in amended Item 17 will not be required to file an updated
Form G-FIN-4 at that time.
In consultations with the appropriate regulatory agencies on the
implementation of the form changes, the Department understands that the
agencies will distribute the revised Form G-FIN-4 to their financial
institutions that are government securities brokers and dealers so that
the institutions can provide the form to their associated persons.
Copies of the G-FIN-4 may also be obtained by contacting the
appropriate regulatory agencies for financial institutions.
III. Special Analysis
It has been determined that these amendments are not a
``significant regulatory action'' as defined in Executive Order 12866.
Therefore, a Regulatory Assessment is not required.
In the preamble to the proposal, pursuant to the Regulatory
Flexibility Act (5 U.S.C. 601, et seq.), the Department certified that
these amendments to Form G-FIN-4, if adopted, would not have a
significant economic impact on a substantial number of small entities.
Accordingly, a regulatory flexibility analysis was not prepared. In
reviewing the final form amendment herein and in light of the fact that
no comments were received, the Department has concluded that there is
no reason to alter the previous certification.
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, 17 CFR Part 449 is amended
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: 15 U.S.C. 78o-5(a), (b)(1)(B), (b)(4).
[[Page 18736]]
2. Form G-FIN-4 is amended 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'' is deleted and
``Director, Office of Thrift Supervision'' is added so that the
modified question reads: ``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'' is 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'' is added so that the
modified question reads: ``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'' is added so that the modified
question reads: ``Has any domestic or foreign court ever:''
Item 17.C.(5) is 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'' is added so
that the modified question reads: ``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.'' is
added so that the modified question reads: ``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. are 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: April 3, 1995.
Frank N. Newman,
Deputy Secretary.
[FR Doc. 95-9056 Filed 4-12-95; 8:45 am]
BILLING CODE 4810-39-W
