The Honorable John D. Dingell -19 agencies, general obligation (but not revenue) obligations of states and their political subdivisions and certain other governmental or quasi-governmental securities specified in the Glass-Steagall Act. At this time, Mellon conducts these limited underwriting and securities placement activities within Mellon Bank, N.A., as is permitted by the Glass-Steagall Act. These activities are subject to regulation and examination by the Comptroller of the Currency and the Federal Reserve Board, as well as by the Municipal Securities Rulemaking Board. Because Mellon is a bank, its underwriting and placing activities are not subject to the Securities Exchange Act of 1934 (see Section 3(a) (4)), and employees involved in these activities are not registered under the Securities Exchange Act of 1934 or licensed by the NASD. 4.e. The phrases "for so long as any Mellon " broker" or "investment Company is defined as a ". subsidiary. There are no such plans. The phrases were only 125_LANO1\78905.1 The Honorable John D. Dingell -20 designed to deal with possibility (even if remote) that the statutory definitions would be changed. 5. See Item 4.c. 6. Mellon anticipates that the application of Sections 23A and 23B of the Federal Reserve Act to transactions between Mellon Bank and Dreyfus, as provided for in the Policy Statement, would be incorporated as a condition of any approval of the merger (if granted) by the Comptroller. Accordingly, the Comptroller would examine for, and enforce compliance with, these two Sections to the same extent as the Comptroller examines for and enforces compliance with these two Sections in the context of national bank transactions with affiliates other than operating subsidiaries. Mellon has extensive experience with implementation of Sections 23A and 23B between its bank subsidiaries and most of their affiliates. Mellon will adopt the same implementation processes and procedures that it presently uses for transactions between Mellon Bank and Dreyfus. We also note that the Federal Reserve has the authority, under Section 23A(b) (1) (E), to override the 125_LANO1\78905.1 The Honorable John D. Dingell -21 subsection (b) (2) (A) exemption and apply Sections 23A and 23B to transactions between Mellon Bank and Dreyfus. 7. Mellon has adopted extensive policies and procedures to prevent the misuse of material non-public information by MBC, Mellon Bank and their subsidiaries and affiliates. These policies and procedures are designed, among other things, to limit access to material non-public information. A copy of MBC's Confidential Information and Securities Trading Policy (the "MBC Policy") is enclosed. (Exhibit 10.) Beginning at page 5, Mellon's policies and procedures for preventing the misuse of material nonpublic information are described. Among these policies and procedures are the following: - Employees in "Investment Functions" (this would files. 125_LANO1\78905.1 The Honorable John D. Dingell -22 Employees in Investment Functions may not have nonpublic information will not be disclosed or Mellon believes that its policies and procedures have been successful in preventing misuse of nonpublic information. Dreyfus also has extensive policies and procedures designed to prevent the misuse of material nonpublic information, which are codified in a Code of Ethics (the "Dreyfus Code"). (Exhibit 11.) Use of material nonpublic information in the possession of Mellon Bank by any Dreyfus or Dreyfus Fund would be strictly prohibited by both the Mellon Policy and the Dreyfus Code. The MBC Policy and Dreyfus Code are also designed to prevent abusive trading practices such as "front running", i.e., an employee's buying and selling securities 125_LANO1\78905.1 The Honorable John D. Dingell -23 for his or her own account on the basis of knowledge of Mellon's trading positions or plans. The MBC Policy and Dreyfus Code will be incorporated by reference into the Policy Statement. Section II,O of the Policy Statement already provides that Mellon Bank will not share confidential customer information with any Mellon Company providing investment services (such as Dreyfus) other than (i) pursuant to the customer's consent or (ii) information of a type that the Mellon Company could receive in a credit bureau or similar report. 8. Mellon has extensive experience and expertise with respect to compliance with the federal securities laws. First, as advisers or third party administrators to over 300 portfolios of investment companies registered under the Investment Company Act of 1940, with over $80.0 billion in assets, Mellon has considerable experience in this directly relevant area of the federal securities laws. Second, MBC is publicly-held and thus subject to the full requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934 (the "1934 Act"). Since January 1, 1990, MBC and its non-bank subsidiaries have issued securities pursuant to 17 registration statements with the SEC, as well 125_LANO1\78905.1 |