Which of the following advertising activities indicate that a bank would NOT be exempt from SEC registration requirements?
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A. B. C. D.C
The SEC (Securities and Exchange Commission) has registration requirements for entities that engage in the sale of securities. Banks are generally exempt from SEC registration requirements if their securities-related activities are limited to certain specific activities, such as offering custodial services for securities owned by customers. However, if a bank engages in certain advertising activities related to securities, it may lose its exemption and be required to register with the SEC.
To answer the question, we need to identify the advertising activity that would cause a bank to lose its SEC exemption. Let's examine each option:
A. Listing securities transfer services for IRA accounts along with other IRA benefits: This activity does not necessarily indicate that the bank is engaged in securities sales, but rather that it is providing transfer services for securities owned by IRA account holders. Therefore, this activity would not cause the bank to lose its SEC exemption.
B. Listing securities services for trust accounts in the bank's trust services brochure: This activity also does not necessarily indicate that the bank is engaged in securities sales, but rather that it is providing securities-related services for trust accounts. Therefore, this activity would not cause the bank to lose its SEC exemption.
C. Mentioning that the bank provides accommodation securities trades for its regular custodial accounts in a print advertisement: This activity could potentially cause the bank to lose its SEC exemption. An accommodation trade is a securities transaction in which a broker-dealer or other third party buys or sells securities for a customer, and the transaction is then assigned to the customer's custodial account. This type of activity could be seen as engaging in securities sales, and therefore could cause the bank to lose its SEC exemption.
D. Stating in an advertisement concerning employee benefit plan services that the bank provides securities brokerage services for employee benefit plan accounts: This activity would also potentially cause the bank to lose its SEC exemption. Providing securities brokerage services for employee benefit plan accounts is considered engaging in securities sales, and therefore would require SEC registration.
Therefore, the correct answer is either C or D, depending on the context and details of the advertising activity.