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Extension of Time Period for Quarterly Reporting of Bank Officers' and Certain Employees' Personal Securities Transactions

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Information about this document as published in the Federal Register.

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Federal Deposit Insurance Corporation (“FDIC”).


Final rule.


The FDIC is amending its regulation governing personal securities trading reporting to extend the time period from 10-business to 30-calendar days after the end of the calendar quarter that officers and all employees of state nonmember banks who make or participate in investment decisions for the accounts of customers have to report their personal securities transactions.


This final rule will become effective on: November 26, 2007.

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Anthony J. DiMilo, Trust Examination Specialist, (202) 898-7496, in the Division of Supervision and Consumer Protection; Julia E. Paris, Senior Attorney, (202) 898-3821, in the Legal Division.

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I. Background

Section 344.9(a)(3) of Part 344 of the FDIC's recordkeeping and confirmation requirements for effecting securities transactions requires all bank officers of state nonmember banks and all employees who, in connection with their duties, make or participate in investment decisions for the accounts of customers (“certain employees”) to report to the bank all securities transactions made by them or on their behalf in which they have a beneficial interest within 10-business days after the end of the calendar quarter.[1] At the time it was adopted, this provision, among others, reflected the U.S. Securities and Exchange Commission's (“SEC”) recommendations contained in the Final Report of the Securities and Exchange Commission on Bank Securities Activities (June 30, 1977) and generally was patterned after SEC regulations.[2] Specifically, section 344.9(a)(3) was intended to be comparable to the SEC's Rule 17j-1 of the Investment Company Act of 1940, which required “access persons” to report personal securities transactions quarterly and originally mandated a 10-business day period for reporting.[3]

The SEC, in July 2004, amended Rule 17j-1 to extend the reporting time period to 30-calendar days after the end of the calendar quarter.[4] The effective date of the SEC's amendments to Rule 17j-1 was August 31, 2004, with a compliance date of January 7, 2005.

II. Summary of Proposed Rule

On June 27, 2007, the FDIC published for comment a Notice of Proposed Start Printed Page 60547Rulemaking to amend section 344.9(a)(3) to extend the time period for reporting quarterly personal securities transactions to 30-calendar days after the end of the calendar quarter.[5] The comment period was 60 days, and expired on August 27, 2007. The FDIC received one comment on this proposal. The commenter supported the proposed amendment and agreed that the purpose of extending the reporting deadline was to align the FDIC's requirements with the SEC's, and to promote practical and uniform recordkeeping requirements.

III. Final Rule

As explained above, the FDIC received one industry comment on its proposal to extend the personal securities transactions reporting requirement to 30-calendar days after the end of the calendar quarter, which comment endorsed the FDIC's reasoning for its proposal. Accordingly, the FDIC is adopting the rule as proposed with no revisions.

IV. Regulatory Analysis and Procedure

A. Plain Language

Section 722 of the Gramm-Leach-Bliley Act (12 U.S.C. 4809) requires the FDIC to use “plain language” in all proposed and final rules published after January 1, 2000. The proposed rule requested comments on how the rule might be changed to reflect the requirements of GLBA. No comments were received.

B. Regulatory Flexibility Act

Under section 605(b) of the Regulatory Flexibility Act (“RFA”) (5 U.S.C. 605(b)) the 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 and a statement explaining the factual basis for such a certification in the Federal Register along with its rule.

Pursuant to section 605(b) of the RFA, the FDIC certifies that this final rule will not have a significant impact on a substantial number of small entities. The FDIC does not expect that this rule will create any additional burden on small entities. In effect, the rule extends to 30-calendar days the reporting period within which officers and certain employees of state nonmember banks have to report their personal securities transactions and gives these individuals more latitude to report their quarterly securities transactions. Accordingly, a regulatory flexibility analysis is not required.

C. Paperwork Reduction Act

The recordkeeping and reporting requirements for securities transactions in Part 344 constitute a collection of information as defined by the Paperwork Reduction Act. The information collection has been approved by the Office of Management and Budget under control number 3064-0028. The reporting requirements and burden associated with that collection would not be affected by this rule.

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List of Subjects in 12 CFR Part 344

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For the reasons set forth in the preamble, title 12, chapter III, part 344, is amended as follows:

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1. The authority citation for Part 344 continues to read as follows:

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Authority: 12 U.S.C. 1817, 1818, and 1819.

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2. In § 344.9, paragraph (a)(3) is revised to read as follows:

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Personal securities trading reporting by bank officers and employees.

(a) * * *

(3) In connection with their duties, obtain information concerning which securities are being purchased or sold or recommend such action, must report to the bank, within 30-calendar days after the end of the calendar quarter, all transactions in securities made by them or on their behalf, either at the bank or elsewhere in which they have a beneficial interest. The report shall identify the securities purchased or sold and indicate the dates of the transactions and whether the transactions were purchases or sales.

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By Order of the Board of Directors.

Dated at Washington, DC, the 16th day of October, 2007.

Federal Deposit Insurance Corporation

Robert E. Feldman,

Executive Secretary.

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2.  44 FR 43260, 43263 (July 24, 1979); see 45 FR 73898 (Nov. 7, 1980) (SEC final rule 17j-1 adopting investment advisor code of ethics and disclosure requirements for “access persons,” as defined by 17 CFR 270.17-j-1(a)(1)).

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3.  See 17 CFR 270.17j-1(c)(2) (1998); 45 FR 73898 (Nov. 7, 1980).

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4.  69 FR 41696 (July 9, 2004).

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5.  72 FR 35204 (June 27, 2007).

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[FR Doc. E7-20998 Filed 10-24-07; 8:45 am]