Volume 17, Number 1--JANUARY 1997

Associated Persons of Bank Dealers: Rule G-37

The Federal Reserve Board recently lifted restrictions on how bank securities underwriting units market and conduct business with other bank affiliates. The new rules will eliminate bans on connections between officers, dealers, and employees of Section 20 subsidiaries and affiliated banks. The Board is reminding bank dealers of the application of rule G-37, on political contributions and prohibitions on municipal securities business, to "municipal finance professionals," including associated persons of dealers (see Section 3(a)(18) of the Securities Exchange Act) who solicit municipal securities business from issuer officials. Also, these associated persons should be made aware that the definition of "contribution" contained in rule G-37(g)(i) includes, in addition to direct contributions to an official of an issuer, monies given for transition or inaugural expenses and the payment of debt for an election.

In This Issue

• Reporting Customer Transactions to the Board
  Amendment Approved: Rule G-14 Effective January 1, 1998, the amendment to rule G-14 requires dealers to report customer transactions in municipal securities to the Board for inclusion in summary public reports and for market surveillance and enforcement purposes. The amendment also requires dealers to obtain an executing broker symbol, effective December 29, 1996, and to prepare for mandatory testing, to be conducted between July and December 1997.
• Executing Broker Symbols
  Notice: Rule G-14
  Rule G-14 requires that every dealer obtain an executing
  broker symbol.
• Political Contributions and Prohibitions on Municipal Securities Business
  Amendments Approved: Rules G-37 and G-8
  The amendments: (i) amend the definition of "municipal finance professional;" (ii) amend the definition of "executive officer;" (iii) clarify the definition of "official of an issuer;" (iv) clarify the definition of "municipal securities business;" and (v) require the retention of Forms G-37/G-38 and the records of sending the forms.
• Questions and Answers Notice: Rule G-38
  The Board is publishing a second Questions and Answers notice concerning consultants.

Also In This Issue

Calendar

• November 6
  Effective date for amendments to rules G-37 and G-8

• November 29
  Approval date of amendment to rule G-14

• December 16
  Effective date for rule G-39 and related amendments

• December 29
  Due date for obtaining an executing broker symbol

• January 31
  Due date for Form G-37/G-38 to be filed with the Board (for
  the period January 1, 1997-March 31, 1997)
• March 14
  Due date for recommendation forms for Board nominations

• April 30
  Due date for Form G-37/G-38 to be filed with the Board(for
  the period January 1, 1997-March 31, 1997)

• July 1
  Due date for dealers to begin testing customer transaction
  reporting with the Board and for providing contact
  information (on a form to be provided by the Board)

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