Comptroller Clarifies Definition That Raised Fears of Red Tape

Responding to industry concerns, the Office of the Comptroller of the Currency is clarifying what constitutes a fiduciary activity.

The question arose after a Dec. 30 rule streamlining part of the agency's rulebook defined a fiduciary business as any activity for which "the bank receives a fee for its investment advice."

Industry representatives complained that such a broad definition would bring several services under cumbersome new requirements.

In Wednesday's Federal Register, the Comptroller's Office will explain that the Dec. 30 final rule does not increase the number of services supervised as part of a national bank's trust business. Investment advice that is incidental to other activities was never intended to come under the new rule, according to agency officials.

Specifically, the proposal would exclude from the definition of fiduciary activities:

Financial advice and counseling.

Merger and acquisition advice.

Investment advice incidental to acting as a municipal securities dealer.

Real estate consulting and asset management.

Bridge loans advice.

Tax planning advice.

Services provided to homeowners' associations.

In this week's release, the OCC asks whether any activities should be added to or removed from this list.

The proposal would codify a Jan. 28 interpretive letter. Comments are due Sept. 8.