The “Interagency Statement on Retail Sales of Nondeposit Investment Products” ( dated February 15, ), formerly contained in section the OCC specifically incorporates the “Interagency Statement on Retail Sales of Nondeposit Investment Products” issued by the Federal. Sale of Uninsured Debt Obligations and Securities Issued by Bank Holding Interagency Statement on Retail Sales of Nondeposit Investment Products.
|Published (Last):||2 January 2012|
|PDF File Size:||1.36 Mb|
|ePub File Size:||8.24 Mb|
|Price:||Free* [*Free Regsitration Required]|
Board of Governors of the Federal Reserve System
At approximately pages, the Booklet is almost three times the length of the version. Although it was adopted almost 21 years ago, the Booklet demonstrates the Interagency Statement’s durability and continued relevance for bank RNDIP activities.
Mine Financing In – Video. As part of its operational risk management, banks should have internal management information systems that ensure timely transaction confirmations and customer statements and billing and should ensure that any modeling used in an RNDIP sales program is properly designed and managed. A bank’s failure to provide adequate resources and risk management to properly manage and control the risks associated with any RNDIP sales program may present a strategic risk to the bank.
To that end, the examination procedures set forth in the Booklet, as well as the sample request letters contained in Appendix I to the Booklet, will provide useful guidance to banks as to the likely scope of information requests that will precede their next exam.
Application of the Third-Party Relationship Bulletin: Risk-Management Categories As mentioned above, the Booklet reflects the OCC’s heightened expectations regarding the adequacy of banks’ compliance and risk-management programs and the need for banks to develop detailed written compliance plans tailored to the complexity of their RNDIP sales activities.
In other words, banks cannot abdicate their oversight saless compliance responsibilities to the affiliated or third-party broker-dealers and must conduct their own independent analysis of RNDIPs, particularly the suitability of the products for the banks’ customers. Food, Drugs, Healthcare, Life Sciences.
In addition, banks should require third parties to have sufficient invedtment continuity planning in the event of interruption, as well as the operational capacity and customer service levels that can adequately service customer needs, particularly in times of market stress.
However, the Booklet identifies the rule as “an appropriate reference for a bank compliance program designed to ensure that the bank’s sales of RNDIPs are operated in a safe and sound manner.
It is intended to stahement guidance for bank examiners on activities of national banks and federal savings associations collectively, banks involved in recommending and selling nondeposit investment products to retail customers.
Insurance Laws and Products. The OCC expects the compliance program to include periodic testing of customer accounts and transactions to detect, prevent, and correct abusive practices.
The Booklet references more than a dozen OCC bulletins, interpretive letters, and other issuances Booklet, p. More from this Firm.
More clarity regarding specific OCC expectations and methods for implementing the guidance in the Booklet will be revealed through upcoming examination cycles. In accordance with the Investmentt Statement, boards should adopt written statements that address the risks, policies, and procedures and risk-management associated with an RNDIP sales program.
Real Estate and Construction. The Booklet replaces the previous booklet of the same name that was issued in February Credit risk can also arise if a bank advances payments to client accounts even intraday or allows overdrafts in client accounts. On November 30,the Southern Proudcts of New York issued an opinion reaffirming the long-standing rule that traders cannot be found liable for illegal market manipulation when their trading was motivated by The OCC states that the Booklet itself is intended to explain “the risks inherent in banks’ retail nondeposit investment product RNDIP sales programs and provide a framework for banks to manage those producfs.
There are several aspects of the Booklet that are particularly noteworthy or warrant special mention. The OCC emphasizes nondepsit importance of due diligence of third-party providers of RNDIP sales services and that any third parties should provide, on a quarterly basis at a minimum, information regarding the third party’s sales practices; surveillance results; exception tracking; product and service offerings; customer complaints, litigation, and settlements; hiring practices; sales force stability; regulatory findings; and compliance issues.
Banks are om expected to identify cross-business-line interdependencies or issues that could present increased risk. News About this Firm. The OCC expects saes bank to “identify, measure, monitor, and control risk by implementing an effective risk management system appropriate for its size and the complexity of its operations.
Nondeposit Investment Discussions, Answers, and Free Resources for Banking Professionals
The OCC identifies operational risk as arising from inadequate oversight of bank employees or third parties, sales practice misconduct, poor customer service, or adverse events that could affect business volume and efficient trade execution.
The Booklet contains extensive discussion about permissible compensation arrangements and referral fees. Virtual currencies and the underlying blockchain technology has a profound potential to be a driver of economic growth. The Booklet emphasizes the need for banks to retain qualified counsel to help assess and manage the risk by ensuring compliance with applicable regulations. Overall, the Booklet will be a useful reference tool for banks, broker-dealers, insurance agents, and registered investment advisers that engage in bank RNDIP sales programs as they modify and adjust their risk management of the RNDIP sales program.
The compliance policies should address the following: The Interagency Statement is still alive and well: Third-party risk management Qualification and training requirements for bank personnel and supervisors, as well as third-party sales representatives who will recommend or sell RNDIPs Compensation arrangements that comply with applicable regulations GLBA, Regulation R, 12 C.
On December 13,the Treasury Department and the Internal Revenue Service issued highly-anticipated proposed regulations regarding the base erosion and anti-abuse tax generally referred to as the “BEAT”. In this respect, the Booklet shows that basic regulatory attitudes about bank retail securities activities have not materially changed since The Booklet goes into great detail regarding applicable requirements concerning disclosures and advertising of RNDIPs.