SECTION 3.3. Securities Activities of Subsidiaries of State Banks

(a) Securities activities permitted. Pursuant to Finance Code, §34.103(c), a state bank may establish or acquire a subsidiary that engages in securities activities; provided, however, that said subsidiary shall comply with all rules and regulations of the Securities and Exchange Commission and the State Securities Board applicable to registered brokers-dealers and investment advisors. The term "securities activities" means issuing, underwriting, selling, or distributing, or acting as agent or advisor in the issuing, underwriting, selling, or distributing of stocks, bonds, debentures, notes, or other securities.

(b) Capitalization. Any subsidiary engaged in securities activities pursuant to this regulation must comply with any applicable state and federal capital requirements including, but not limited to, those imposed by the Securities and Exchange Commission, the State Securities Board, or the National Association of Securities Dealers.

(c) Limitations. A state bank may not purchase, in its discretion as fiduciary or managing agent, any security underwritten, distributed, or issued by the bank's securities subsidiary or any security issued by an investment company advised by the subsidiary unless authorized by applicable law.

(d) Notice. A state bank must, before or at the time of submitting a letter to the banking commissioner regarding a new subsidiary or new subsidiary activity as required by Finance Code, §34.103(e), submit to the banking commissioner any related filing or application made with the Federal Deposit Insurance Corporation or with a Federal Reserve Bank, including filings required under the provisions of 12 CFR Part 208 or Part 362, or any successor regulation.

Source Note: The provisions of this §3.3 adopted to be effective August 19, 1985, 10 TexReg 2542; amended to be effective May 17, 1996, 21 TexReg 3929; amended to be effective September 8, 2022, 47 TexReg 5328