(a) General. A bank is exempt from meeting the “chiefly compensated”
condition in section 3(a)(4)(B)(ii)(I) of the act (15 USC 78c(a)(4)(B)(ii)(I))
to the extent that it effects transactions in securities for any account
in a trustee or fiduciary capacity within the scope of section 3(a)(4)(D)
of the act (15 USC 78c(a)(4)(D)) if—
(1) the bank meets the other conditions
for the exception from the definition of the term broker under
sections 3(a)(4)(B)(ii) and 3(a)(4)(C) of the act (15 USC 78c(a)(4)(B)(ii)
and 15 USC 78c(a)(4)(C)), including the advertising restrictions in
section 3(a)(4)(B)(ii)(II) of the act (15 USC 78c(a)(4)(B)(ii)(II)
as implemented by section 218.721(c); and
(2) the aggregate relationship-total compensation
percentage for the bank’s trust and fiduciary business is at least
70 percent.
(b) Aggregate relationship-total compensation percentage. For purposes of this section, the aggregate relationship-total compensation
percentage for a bank’s trust and fiduciary business shall be the
mean of the bank’s yearly bankwide compensation percentage for the
immediately preceding year and the bank’s yearly bankwide compensation
percentage for the year immediately preceding that year.
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(c) Yearly bankwide compensation percentage. For purposes of this section, a bank’s yearly bankwide compensation
percentage for a year shall be—
(1) equal to the relationship compensation
attributable to the bank’s trust and fiduciary business as a whole
during the year divided by the total compensation attributable to
the bank’s trust and fiduciary business as a whole during that year,
with the quotient expressed as a percentage; and
(2) calculated within 60 days of the end
of the year.
(d) Revenues derived from transactions conducted under other exceptions
or exemptions. For purposes of calculating the yearly compensation
percentage for a trust or fiduciary account, a bank may at its election
exclude the compensation associated with any securities transaction
conducted in accordance with the exceptions in section 3(a)(4)(B)(i)
or section 3(a)(4)(B)(iii)-(xi) of the act (15 USC 78c(a)(4)(B)(i)
or 78c(a)(4)(B)(iii)-(xi)) and the rules issued thereunder, including
any exemption related to such sections jointly adopted by the Commission
and the Board, provided that if the bank elects to exclude such compensation,
the bank must exclude the compensation from both the relationship
compensation (if applicable) and total compensation of the bank.
