(a) Short-term accounts. A bank may, in determining its compliance
with the chiefly compensated test in section 218.721(a)(1) or section
218.722(a)(2), exclude any trust or fiduciary account that had been
open for a period of less than three months during the relevant year.
(b) Accounts acquired as
part of a business combination or asset acquisition. For purposes
of determining compliance with the chiefly compensated test in section
218.721(a)(1) or section 218.722(a)(2), any trust or fiduciary account
that a bank acquired from another person as part of a merger, consolidation,
acquisition, purchase of assets, or similar transaction may be excluded
by the bank for 12 months after the date the bank acquired the account
from the other person.
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(c) Non-shell
foreign branches.
(1) Exemption. For purposes of determining compliance with the chiefly compensated
test in section 218.722(a)(2), a bank may exclude the trust or fiduciary
accounts held at a non-shell foreign branch of the bank if the bank
has reasonable cause to believe that trust or fiduciary accounts of
the foreign branch held by or for the benefit of a U.S. person as
defined in 17 CFR 230.902(k) constitute less than 10 percent of the
total number of trust or fiduciary accounts of the foreign branch.
(2) Rules of construction. Solely for purposes
of this paragraph (c), a bank will be deemed to have reasonable cause
to believe that a trust or fiduciary account of a foreign branch of
the bank is not held by or for the benefit of a U.S. person if—
(i) the principal mailing address maintained and used by the foreign
branch for the accountholder(s) and beneficiary(ies) of the account
is not in the United States; or
(ii) the records of the foreign branch
indicate that the account holder(s) and beneficiary(ies) of the account
is not a U.S. person as defined in 17 CFR 230.902(k).
(3) Non-shell foreign branch. Solely for purposes
of this paragraph (c), a non-shell foreign branch of a bank means
a branch of the bank—
(i) that is located outside the United
States and provides banking services to residents of the foreign jurisdiction
in which the branch is located; and
(ii) for which the decisions relating
to day-to-day operations and business of the branch are made at that
branch and are not made by an office of the bank located in the United
States.
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(d) Accounts transferred to a broker or
dealer or other unaffiliated entity. Notwithstanding section
3(a)(4)(B)(ii)(I) of the act (15 USC 78c(a)(4)(B)(ii)(I)) and section
218.721(a)(1) of this part, a bank operating under section 218.721(a)(1)
shall not be considered a broker for purposes of section 3(a)(4) of
the act (15 USC 78c(a)(4)) solely because a trust or fiduciary account
does not meet the chiefly compensated standard in section 218.721(a)(1)
if, within three months of the end of the year in which the account
fails to meet such standard, the bank transfers the account or the
securities held by or on behalf of the account to a broker or dealer
registered under section 15 of the act (15 USC 78o) or another entity
that is not an affiliate of the bank and is not required to be registered
as a broker or dealer.
(e) De minimis exclusion. A bank may, in determining its compliance
with the chiefly compensated test in section 281.721(a)(1), exclude
a trust or fiduciary account if—
(1) the bank maintains records demonstrating
that the securities transactions conducted by or on behalf of the
account were undertaken by the bank in the exercise of its trust or
fiduciary responsibilities with respect to the account;
(2) the total number of accounts
excluded by the bank under this paragraph (d) does not exceed the lesser
of—
(i) 1 percent of the total number of
trust or fiduciary accounts held by the bank, provided that if the
number so obtained is less than 1 the amount shall be rounded up to
1; or
(ii) 500;
and
(3)
the bank did not rely on this paragraph (e) with respect to such account
during the immediately preceding year.
