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Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Proposed Rules Therefore, the FDIC proposes to rescind and remove part 390, subpart W, and replace it with the proposed regulation, addressing securities offering disclosure requirements.
B. Rescission of the 1996 Statement of Policy Since the 1996 Statement of Policy was adopted, the Securities Act was revised 62 and the SEC issued new regulations,63 State laws applicable to certain securities offerings of FDICsupervised institutions were rescinded, and the FDIC received supervisory authority over State savings associations. Rescinding part 390, subpart W and the 1996 Statement of Policy provides the FDIC with an opportunity to bring FDIC-supervised institutions regulations into harmony with current securities laws and regulations, to address the preemption of State law, and to locate in one place the FDICs expectations regarding FDICsupervised institutions.

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C. Proposed Regulation on Securities Offering Disclosures In light of the Securities Act exemptions discussed above in section II.C. of this Supplementary Information section, the FDIC has relied on State laws and regulations for securities disclosure matters. However, changes to the Federal securities laws have resulted in the rescission of much of the applicable State law. The National Securities Markets Improvement Act of 1996 NSMIA preempted state authority in two areas that impacted the FDIC: Offerings by companies traded on a national securities exchange,64 and certain exempt offerings under SEC Rule 506.65 Furthermore, the Jumpstart Our Business Startups Act JOBS Act,66 as implemented by SEC regulation, 62 See, e.g., the Jumpstart Our Business Startups Act JOBS Act, Public Law 112106, 126 Stat. 306
Apr. 5, 2012, which amends certain provisions of the Securities Act to exempt certain securities offerings from registration requirements.
63 See 80 FR 21806, 21856 Apr. 20, 2015
https www.sec.gov/rules/final/2015/33-9741.pdf, pp. 205207 for a discussion on how SEC
regulations relationship with State securities laws and preempt certain State registration requirements with respect to companies offering securities under SEC Regulation A, Tier 2.
64 15 U.S.C. 77rb1B preempting state registration authority over a security listed, or authorized for listing, on a national securities exchange.
65 15 U.S.C. 77rb3 preempting state registration authority over the offer or sale of the security to qualified purchasers, as defined by the Commission by rule. Regulation D relates to transactions exempted from the registration requirements of section 5 of the Securities Act, 15
U.S.C. 77d, and is codified at 17 CFR 230.500
through 230.508.
66 Public Law 112106, 126 Stat. 306 April 5, 2012.

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preempted State registration authority over additional offerings under the amended and expanded SEC
Regulation A+ rules.67
Notwithstanding the preemption of State law, it has been the FDICs experience that FDIC-supervised institutions follow SEC regulations voluntarily in order to comply with the anti-fraud provisions. However, given the recent regulatory changes and preemption of State law, the FDIC is proposing a regulation to address and clarify the requirements for securities offering disclosures by State nonmember banks and State savings associations. Similar to the 1996
Statement of Policy, the amended regulation parallels the requirements of the applicable SEC and OCC
regulations. The proposed regulation would be located in subpart A of part 335 of the FDICs regulations.68
The proposed regulation would refer to these updated laws and regulations and also would acknowledge that under Section 312b2BiII of the DoddFrank Act,69 granting the OCC
rulemaking authority relating to both State and Federal savings associations, a mutual State savings association that intends to use a securities offering in connection with a stock offering as part of its conversion to the stock form is by law subject to the disclosure and other requirements of part 192 of the OCC
regulations, entitled Conversions from Mutual to Stock Form.70 The proposed regulation would indicate that the principles described therein also would be relevant for subsidiaries of State savings associations that issue securities and would add SEC Rule 144 71 and Rule 144A 72 to the list of potentially relevant Federal regulations for FDICsupervised institutions to reference.
Rules 144 and 144A provide guidance for persons who are not deemed to be engaged in a distribution and therefore are not underwriters, and for private resales of securities to institutions.
The proposed regulation would apply to securities offerings to be made by 67 See Amendments to Regulation A, Release Nos.
339741, 3474578, 392501, 80 FR 21806 Apr. 20, 2015. 17 CFR 230.251 through 230.263.
68 Part 335, entitled Securities of State Nonmember Banks and State Savings Associations, addresses securities recordkeeping and requirements. The proposed regulation would create subpart B to contain the existing regulations of part 335 and create subpart A to contain the new proposed regulation relating to securities offering disclosures.
69 12 U.S.C. 5412b2BiII.
70 See 12 CFR 192.300192.310. This includes the restrictions on the officers and directors sale of stock post-conversion. 12 CFR 192.505.
71 17 CFR 230.144.
72 17 CFR 230.144A.

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FDIC-supervised institutions in organization, FDIC-supervised institutions subject to an enforcement order that intend to issue securities, and FDIC-supervised institutions converting from a mutual to stock form of ownership. The proposed regulation would also apply to securities offerings made by the subsidiaries of State savings associations in any of the three prior scenarios.
The proposed regulation would incorporate defined terms from the Securities Act, would specifically reference SEC and OCC requirements for, and exemptions from, preparing registration statements and prospectuses, would set forth rules for offers and sales of securities by issuers, underwriters, and dealers, and would impose no new filing or other requirements on FDIC-supervised institutions. Thus, the proposed regulation eschews a recitation of the required contents of offering documents covering the securities issuances of FDIC-supervised institutions and instead requires that offering documents contain the information that would be required by the appropriate SEC form when offering securities for sale, if filing or registration were required under the Federal securities laws, and the information that would be required under the appropriate registration exemption if one applies. The proposed regulation thus seeks to treat the securities offerings of FDIC-supervised institutions more like those of other corporations falling under SEC
jurisdiction and to eliminate a duplicative system of regulations and forms.
The proposed regulation also would provide requirements regarding sales practices on the premises of the issuing FDIC-supervised institution or online, and would require legends to avoid consumer confusion regarding the insured status of banking organization securities.
Consistent with existing authorities and supervisory practices, and to assess compliance with Federal antifraud provisions, the FDIC will continue to review offering documents issued by FDIC-supervised institutions in connection with FDIC-supervised institutions in organization, FDICsupervised institutions subject to an enforcement order that intend to issue securities, and FDIC-supervised institutions converting from a mutual to stock form of ownership. Such offering circulars would be required to contain the forms and other content required by the registration exemption upon which the FDIC-supervised institution relies.
The proposed rule would permit an
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