§ 401.4Exemption for financial institutions engaged in limited government securities dealer activities.
(a) Subject to the requirements of paragraph (b) of this section, a financial institution shall be exempt from the provisions of sections 15C (a), (b), and (d) of the Act (15 U.S.C. 78o-5 (a), (b), (d)) and the regulations of this subchapter if its government securities dealer activities are limited to one or more of the following activities:
(1) Sales or purchases in a fiduciary capacity;
(2) The sale and subsequent repurchase and the purchase and subsequent resale of government securities pursuant to a repurchase or reverse repurchase agreement; and
(3) Such other activities as have been exempted by regulation under this subchapter.
(1) A financial institution that relies on the exemption contained in paragraph (a) of this section is required to comply with:
(i) The regulations of part 450 of this chapter concerning custodial holdings of government securities for customers; and
(ii)Section 403.5(d) of this chapter concerning certain repurchase transactions with customers.