Recordkeeping Form G-FIN

INSTRUCTIONS FOR PREPARATION OF

Notice by Financial Institutions of
Government Securities Broker or
Government Securities Dealer Activites
FR G-FIN

GENERAL INSTRUCTIONS
A. Terms and Abbreviations
1. ‘‘Act’’ refers to the Securities Exchange Act of 1934,
as amended by the Government Securities Act of
1986.
2. ‘‘ARA’’ refers to the financial institution’s appropriate regulatory agency, as defined in section
3(a)(34)(G) of the Act. See general instruction (E)
below for a listing of appropriate regulatory agencies.
3. ‘‘Government securities’’ are defined in section
3(a)(42) of the Act. In general, this term refers to
direct obligations of or obligations guaranteed as to
principal or interest by the United States; securities
issued or guaranteed as to principal or interest by
corporations designated by statute or by the Secretary of the Treasury to constitute exempt securities;
and puts, calls, straddles or options on such securities. Although not all inclusive, the following are
the more common types of government securities
covered by the term: U.S. Treasury bills, bonds,
notes; discount notes, bonds, certain collateralized
mortgage obligations, pass throughs, master notes,
and other obligations of the Government National
Mortgage Association (GNMA), Federal National
Mortgage Association (FNMA), Federal Home Loan
Mortgage Corporation (FHLMC), Student Loan Marketing Association (SLMA), Federal Home Loan
Banks and Farm Credit Banks; securitized Small
Business Association (SBA) loans; and FNMA stock.
4. ‘‘Government securities broker’’ is defined in section 3(a)(43) of the Act. In general, this term refers
to a financial institution that is regularly engaged in
the business of effecting transactions in government
securities for the account of others.
5. ‘‘Government securities dealer’’ is defined in section
3(a)(44) of the Act. In general, this term refers to a
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General Instructions March 2013

financial institution engaged in the business of buying and selling government securities for its own
account but does not include a financial institution
insofar as it buys or sells securities for its own account but not as a part of its regular business or in a
fiduciary capacity.
6. ‘‘Financial institution’’ is defined in Section 3(a)(46)
of the Act. In general, the term refers to any national
or state chartered bank or trust company which is
supervised and examined by a state or federal bank
supervisory agency, a foreign bank, and any other
institution whose deposits were formerly insured by
the Federal Savings and Loan Insurance Corporation.
7. ‘‘Associated person’’ is defined by Treasury regulation (17 C.F.R. 400.3(c)) to mean a person directly
engaged in any of the following activities in either a
supervisory or nonsupervisory capacity: underwriting, trading or sales of government securities; financial advisory or consultant services for issuers in
connection with the issuance of government securities; other communications with public investors, or
research or investment advice other than general
economic information or advice, with respect to
government securities in connection with the activities described above. The term is further defined in
Section 400.3(c) to cover persons engaged in the
following activities in a supervisory capacity: processing and clearance activities with respect to government securities and maintenance of records
involving any of the activities described in this
paragraph.
This definition does not include directors and
senior officers of the financial institution who may
from time to time set broad policy guidelines affecting the financial institution as a whole, but are not
directly involved in the conduct of the financial
institution’s government securities business on a
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General Instructions

day-to-day basis. It also does not cover persons
whose functions are solely clerical or ministerial,
persons who are acting in a fiduciary capacity, or
persons who act solely as order takers without giving
invest- ment advice or receiving transaction-based
compensation.
B. Who Must File?
Under Section 15C(a)(1)(B) of the Act, any financial
institution that is a government securities broker or
government securities dealer within the foregoing definitions must file with its ARA a written notice, on the form
prescribed herein, except as described below. A financial
institution that buys and sells securities solely for investment for its own account or for accounts for which it acts
as a fiduciary will not generally be classified as a dealer,
even though such purchases and sales are made with
some frequency. Virtually every financial institution purchases government securities for investment; and purchases and sales may occur to accommodate changes in
the financial institution’s financial position or to reflect
investment decisions. The legislative history of the Act
indicates that the Congress did not intend to require
financial institutions engaged in such investment-type
activity to register as dealers. The Department of the
Treasury has exempted financial institutions that engage
solely in the following activities:
(1) Acting as issuing agent, payment agent or forwarding
agent for U.S. Savings Bonds (17 C.F.R. 401.1);
(2) submission of tenders for the account of customers
for purchase on original issue of U.S. Treasury
securities (17 C.F.R. 401.2);
(3) the sale and subsequent repurchase and the purchase
and subsequent resale of government securities pursuant to a repurchase or reverse repurchase agreement (17 C.F.R. 401.4); or
(4) sales or purchases in a fiduciary capacity (17 C.F.R.
401.4).
In general, government securities activities that may
bring a financial institution within the definition of
government securities dealer include the following: (1)
underwriting or participating in a selling group for the
sale of government securities; (2) advertising or otherwise holding itself out to other dealers or investors as a
dealer in government securities; or (3) quoting a market
for government securities, and in connection with such
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quotations, standing ready to purchase or sell government securities.
The Department of the Treasury also has exempted (17
C.F.R. 401.3) any financial institution from the definition
of government securities broker unless it (1) holds itself
out as a government securities broker or interdealer
broker; or (2) actively solicits individual purchases or
sales of government securities on an agency basis. In
addition, a financial institution will be exempt if it (a)
effects less than 500 brokerage transactions per year or
(b) except for U.S. Savings Bonds and submissions of
tenders for U.S. Treasury securities (as described above),
effects all brokerage transactions through a government
securities broker or dealer who is clearly identified as the
entity providing the brokerage services, and who meets
the other conditions of the exemption.
A branch or agency of a foreign bank that engages in
government securities transactions solely with non-U.S.
citizens that are resident outside the United States is also
exempt (17 C.F.R. 401.6).
C. When to File
A financial institution that was acting as a government
securities broker or government securities dealer on July
25, 1987, was required to file a notice with its ARA on or
before that date. Any financial institution that proposes to
act as a government securities broker or government
securities dealer after that date shall file the notice before
it commences operations.
D. Amendments
In the event any of the information previously submitted
on this notice becomes incomplete, inaccurate or no
longer applicable, the notice must be amended. This
amendment must be filed within 30 calendar days of the
notice becoming inaccurate (17 C.F.R. 400.5(b)).
Items 1, 2, 3, 4, and 8 of the notice shall be completed
for each amendment. Otherwise, only those items which
are being amended need to be completed.
E. How and Where to file: Number of copies
Each financial institution must file two copies of the
notice and each amendment with its ARA, one of which
will be sent by the ARA to the SEC. Retain one exact
copy for your records. A financial institution may determine the name and address of its ARA from the following:
1. A national bank, a bank operating in the District of
Columbia that is examined by the Comptroller of the
Currency, or a federal branch or federal agency of a
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foreign bank, files with the:
Office of the Comptroller of the Currency
Market Risk Division
400 7th Street, S.W.
Mail Stop 7W-3
Washington, DC 20024
2. A state member bank of the Federal Reserve System,
a foreign bank, an uninsured state branch of a state
agency of a foreign bank, a commericial lending
company owned or controlled by a foreign bank, or
an Edge corporation files with the:
Board of Governors of the Federal Reserve
System
Division of Banking Supervision & Regulation
Attention: Government Securities Broker/Dealers
20th and C Streets, N.W.
Washington, DC 20551
3. A bank insured by the Federal Deposit Insurance
Corporation (other than a bank which is a member of
the Federal Reserve System or a federal savings
bank) or an insured branch of a foreign bank files
with the:
Federal Deposit Insurance Corporation
Division of Risk Management Supervision
Attention: Government Securities Broker/Dealers
550 17th Street, N.W.
Washington, DC 20429
4. A state chartered bank or a state chartered trust
company that is not a member of the Federal Reserve
System and whose deposits are not insured by the

FR G-FIN
General Instructions March 2013

Federal Deposit Insurance Corporation, or any other
financial institution not described in the preceding
paragraphs, files with the:
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
F. Privacy Act Notice
Collection of the information to be supplied on this form
is authorized by section 15C(a)(1)(B) of the Securities
Exchange Act of 1934, 15 U.S.C. 78o-5(a)(1)(B). Disclosure is mandatory for all financial institutions that act as
government securities brokers or government securities
dealers that are not exempted from filing under Treasury
Department regulations (see 17 C.F.R. Part 401). The
principal purpose of this notice is to identify to the
appropriate regulatory agencies those financial institutions that act as government securities brokers or government securities dealers and are subject to regulation
under the Act. Information supplied on this form will be
included routinely in the public files of the appropriate
regulatory agencies and will be available for inspection
by any interested person. In addition, the Securities and
Exchange Commission will maintain copies of all G-FIN
notices in the public files, and will make them available
for public inspection by any interested person. Financial
institutions that do not provide the information solicited
on this form may not lawfully act as government securities brokers or government securities dealers unless
exempted from the notice requirement by Treasury
Department regulation (17 C.F.R. Part 401).

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