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#12684 - 03/04/02 09:47 PM NDIP
P*Q Offline

Power Poster
Joined: May 2001
Posts: 8,458
Does anyone know if it would pass with examiners if we did some of our bank's investments with our NDIP provider? Our broker is a joint employee with the Bank and the brokerage firm. The joint employee would be receiving commissions as a result of this investment activity. Any advice would be helpful.

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General Discussion
#12685 - 03/04/02 10:14 PM Re: NDIP
KSK Offline
Gold Star
Joined: Jul 2001
Posts: 357
Without knowing precisely what NDIPs you are talking about nor the actual relationship between your bank and the brokerage firm - I would say YES - your regulator may very well have some concerns.

Some of the questions that immediately come to mind are: Is the use of the brokerage firm to execute the trades for the bank's portfolio or for a client account? If the proposed transactions are for the bank's portfolio, are you able to document best price and execution? If the proposed transactions are for a client account, what disclosures are you providing to the client to avoid potential conflicts of interest?

I would suggest that you consult with your legal counsel before proceeding down that road.

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