REGULATORY DEFINITION OF "SEPARATELY IDENTIFIABLE DEPARTMENT OR DIVISION OF A BANK"

Section 15B(b)(2)(H) of the Securities Exchange Act of 1934 (15 U.S.C. 780-4(b)(2)(H)), provides that the Municipal Securities Rulemaking Board shall define the term "separately identifiable department or division of a bank", as that term is used in section 3(a)(30) of that Act (15 U.S.C. 78c(a)(30)). Pursuant to this provision, the Municipal Securities Rulemaking Board has adopted Rule G-1, which is set forth below:

RULE G-1. (a) A separately identifiable department or division of a bank, as such term is used in section 3(a)(30) of the Act, is that unit of a bank which conducts all of the activities of the bank relating to the conduct of business as a municipal securities dealer ("municipal securities dealer activities"), as such activities are hereinafter defined, provided that:

(1) Such unit is under the direct supervision of an officer or officers designated the board of directors of the bank as responsible for the day-to-day conduct of the bank's municipal securities dealer activities, including the supervision of all bank employees engaged in the performance of such activities; and

(2) There are separately maintained in or separately extractable from such unit's own facilities or the facilities of the bank, all of the records relating to the bank's municipal securities dealer activities, and further provided that such records are so maintained or otherwise accessible as to permit independent examination thereof and enforcement of applicable provisions of the Act, the rules and regulations thereunder and the rules of the Board.

(b) For purposes of this rule, the activities of the bank which shall constitute municipal securities dealer activities are as follows: (1) underwriting, trading and sales of municipal securities; (2) financial advisory and consultant services for issuers in connection with the issuance of municipal securities;

(3) processing and clearance activities with respect to municipal securities;

(4) research and investment advice with respect to municipal securities;

(5) any activities other than those specifically enumerated above which involve communication, directly or indirectly, with public investors in municipal securities; and

(6) maintenance of records pertaining to the activities described in paragraphs (1) through (5) above;

provided, however, that the activities enumerated in paragraphs (4) and (5) above shall be limited to such activities as they relate to the activities enumerated in paragraphs (1) and (2) above.

(c) The fact that directors and senior officers of the bank may from time to time set broad policy guidelines affecting the bank as

a whole and which are not directly related to the day-to-day conduct of the bank's municipal securities dealer activities, shall not disqualify the unit hereinbefore described as a separately identifiable department or division of the bank or require that such directors or officers be considered as part of such unit.

(d) The fact that the bank's municipal securities dealer activities are conducted in more than one geographic organizational or operational unit of the bank shall not preclude a finding that the bank has a separately identifiable department or division for purposes of this rule, provided, however, that all such units are identifiable and that the requirements of subparagraphs (1) and (2) of paragraph (a) of this rule are met with respect to each such unit. All such geographic, organizational or operational units of the bank shall be considered in the aggregate as the separately identifiable department or division of the bank for purposes of this rule.

INDEX TO APPENDIX

In general, items appear in the appendix in the order in which they are codified
in the United States Code. References in brackets [ ] are to the United States
Code.

INDEX TO APPENDIX-Continued

In general, items appear in the appendix in the order in which they are codified
in the United States Code. References in brackets [ ] are to the United States
Code.

706

[22 U.S.C. 286k-1,
286k-2].

[22 U.S.C. 2901-9]

[22 U.S.C. 290/ note,
2901, 2901-7].

[26 U.S.C. 103]

[26 U.S.C. 401]

[26 U.S.C. 403(b)]

[26 U.S.C. 404(a)(2)]

[26 U.S.C. 414(d)]

[26 U.S.C. 501(a), (c)(2),
(c)(16)].

[26 U.S.C. 521(a)–(b)]

....

Certain corporations organized by farmers' co-
operatives and corporations organized to hold
title to property referred to in section 3(a)(5)
of Securities Act.

Farmers' cooperatives referred to in section
3(a)(5) of Securities Act.

[26 U.S.C. 851(e)(1), (3)] Authority of SEC to certify as to investment

companies furnishing capital to development
corporations.

707

708

[29 U.S.C. 1002(21)]

Definition of "fiduciary" referred to in section
2(15) of Securities Act.

710

Exemption for corporations organized pursuant
to Alaska Native Claims Settlement Act.
Exemption for obligations of United States Rail-
way Association.

711

713

Definitions of "common carrier" and "State com-

714

mission" referred to in section 3(a)(22)(A) of
Securities Exchange Act.

Exemption for modifications in railroad finan-
cial structures.

715

INDEX TO APPENDIX-Continued

In general, items appear in the appendix in the order in which they are codified
in the United States Code. References in brackets [ ] are to the United States
Code.