Letter outlines proposal for removing old OTS rules on securities offerings

Regulations for state savings associations regarding securities offerings, transferred from their former federal regulator to the federal insurer of bank regulations, are being proposed for removal, according to a letter issued Friday by the agency.

The Federal Deposit Insurance Corp. (FDIC) said its financial institution letter (FIL-6-2021) outlined the proposal issued by the agency’s board Jan. 19 to remove regulations transferred from the former Office of Thrift Supervision (OTS) regarding securities offerings of state savings associations. The OTS went out of existence in 2011 following the passage of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), which transferred a number of the agency’s rules and regulations to the FDIC and the Office of the Comptroller of the Currency (OCC).

According to the letter, the FDIC Board wants to: rescind the transferred OTS securities offering regulation (part 390, subpart W), applicable only to state savings associations; rescind the FDIC’s 1996 statement of policy on the use of offering circulars, which is applicable only to state nonmember banks; propose a new regulation governing securities offering disclosures; and make other technical amendments to FDIC’s regulations referencing mutual-to-stock conversions.

Other proposals outlined in the letter include:

  • Referencing Securities and Exchange Commission (SEC) requirements for, and exemptions from, preparing registration statements and prospectuses; and set forth rules for offers and sales of securities by issuers, underwriters, and dealers;
  • Referencing OCC regulations for stock offerings made in connection with mutual-to-stock conversions;
  • Making technical amendments to parts 303 and 333, with respect to insured mutual state-chartered savings banks mutual-to-stock conversions.

The changes proposed, the FDIC said, would be incorporated into subpart A of part 335 of its regulations. it said the changes would apply to: securities offerings to be made by FDIC-supervised institutions in organization; FDIC-supervised institutions subject to an enforcement order that intend to issue securities; FDIC-supervised institutions converting from a mutual-to-stock form of ownership; and subsidiaries of state savings associations in one of the categories.

FDIC FIL-6-2021