WASHINGTON - Federal regulators released a final rule last week governing the activities and investments allowed by state banks and their affiliates.
The Federal Deposit Insurance Corp. issued the rule to allow its regulated institutions to do any activity through a financial subsidiary that is allowed for a national bank. This rule brings those institutions in line with similar rules released by the Fed.
For example, state banks and their affiliates engaging in securities underwriting must follow several safeguards, the rule said. These steps include making the securities business physically separate and distinct from any bank operations, informing customers that the securities business is owned by the bank, not expressing any opinions on the advisability of the sale of securities, and adopting appropriate policies for its participation in the financing of any transactions underwritten by a subsidiary.
The rule was a final version of an interim regulation released in March.