Government Securities Act Exemption Limit

D

The Government Securities Act (GSA) was enacted to regulate the sale and purchase of government securities by banks and other financial institutions. The GSA requires financial institutions that engage in government securities transactions to register with the Securities and Exchange Commission (SEC) and comply with various reporting and record-keeping requirements.

However, there is an exemption under the GSA that allows banks to engage in a limited number of government securities transactions without registering with the SEC. This exemption is known as the "de minimis" exemption.

To qualify for the de minimis exemption, a bank must meet two criteria:

1. The bank's government securities transactions must be limited in number; and
2. The bank's government securities transactions must be incidental to the bank's business.

The number of transactions that a bank may engage in and still qualify for the de minimis exemption is set by the SEC. The SEC has established the maximum number of transactions that a bank may have in a calendar year and still remain exempt from the GSA.

The correct answer to the question is D. 499 per year. This means that a bank may engage in up to 499 government securities transactions in a calendar year and still qualify for the de minimis exemption under the GSA.

It is important to note that if a bank exceeds the maximum number of transactions allowed under the de minimis exemption, it must register with the SEC and comply with all of the reporting and record-keeping requirements under the GSA.