Sec. 218.741 Exemption for banks effecting
transactions in money market funds.
(a) A bank is exempt from the
definition of the term ‘‘broker’’ under
section 3(a)(4) of the Act (15 U.S.C.
78c(a)(4)) to the extent that it effects
transactions on behalf of a customer in
securities issued by a money market
fund, provided that:
(1) The bank either
(i) Provides the customer, directly or
indirectly, any other product or service,
the provision of which would not, in
and of itself, require the bank to register
as a broker or dealer under section 15(a)
of the Act (15 U.S.C. 78o(a)); or
(ii) Effects the transactions on behalf
of another bank as part of a program for
the investment or reinvestment of
deposit funds of, or collected by, the
other bank; and
(2)(i) The class or series of securities
is no-load; or
(ii) If the class or series of securities
is not no-load
(A) The bank or, if applicable, the
other bank described in paragraph
(a)(1)(B) of this section provides the
customer, not later than at the time the
customer authorizes the securities
transactions, a prospectus for the
securities; and
(B) The bank and, if applicable, the
other bank described in paragraph
(a)(1)(B) of this section do not
characterize or refer to the class or series
of securities as no-load.
(b) Definitions. For purposes of this
section:
(1) Money market fund has the same
meaning as in §___.740(b).
(2) No-load has the same meaning as
in §___.740(c).
Amended effective 4/17/2008, 73 Federal Register 20779
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