Under the Interagency Statement on Retail Sales of Nondeposit Investment Products what disclosure must the bank's investment sales representative make to the customer?
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A. B. C. D.C
The Interagency Statement on Retail Sales of Nondeposit Investment Products (the "Statement") was issued jointly by five federal financial regulatory agencies in 1994 to provide guidance for banks and their employees who sell nondeposit investment products to customers.
According to the Statement, a bank's investment sales representative must make certain disclosures to the customer before the customer purchases a nondeposit investment product. One of these required disclosures is that the investment product is not guaranteed by the bank. This means that if the investment loses value, the customer may not be able to recoup their losses from the bank.
The purpose of this disclosure is to ensure that the customer understands that the investment product is not a bank deposit and is not insured by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Instead, the investment product is subject to market risk and may lose value.
Therefore, the correct answer to the question is option C, "That the investment product is not guaranteed by the bank."
Options A, B, and D are not required disclosures under the Statement. However, a bank's investment sales representative may be required to disclose the bank's regulatory agency, sales commission, or arbitration procedure under other laws or regulations.