(a) A bank is exempt from the
definition of the term broker under section 3(a)(4) of the
act (15 USC 78c(a)(4)), to the extent that, as an agent, it engages
in or effects securities lending transactions, and any securities
lending services in connection with such transactions, with or on
behalf of a person the bank reasonably believes to be—
(1) a qualified investor as defined in
section 3(a)(54)(A) of the act (15 USC 78c(a)(54)(A)); or
(2) any employee benefit plan
that owns and invests on a discretionary basis, not less than $ 25,000,000
in investments.
(b) Securities-lending
transaction means a transaction in which the owner of a security
lends the security temporarily to another party pursuant to a written
securities-lending agreement under which the lender retains the economic
interests of an owner of such securities, and has the right to terminate
the transaction and to recall the loaned securities on terms agreed
by the parties.
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(c) Securities-lending services means—
(1) selecting and negotiating
with a borrower and executing, or directing the execution of the loan
with the borrower;
(2) receiving, delivering, or directing the receipt or delivery of
loaned securities;
(3) receiving, delivering, or directing the receipt or delivery of
collateral;
(4) providing
mark-to-market, corporate action, recordkeeping, or other services
incidental to the administration of the securities-lending transaction;
(5) investing, or directing
the investment of, cash collateral; or
(6) indemnifying the lender of securities
with respect to various matters.
