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ARTICLE · 22 OCTOBER 1998

Financial Services Alert

Goodwin Procter LLP
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United StatesFinance and Banking

Vol. 2 No. 8

Recent Developments Regarding Retail Sales of Nondeposit Investment Products

As banks have expanded the array of nondeposit investment products (such as mutual funds, annuities and certain other insurance products) ("NDIPs") offered to retail customers, federal banking and other regulators have become increasingly watchful of the possibility of confusion with FDIC-insured products. The degree of the federal agencies' concern in this regard was recently illustrated by the nearly $7 million settlement by the SEC, the NASD and the OCC of enforcement actions against a major financial institution, a subsidiary registered broker dealer, and three individuals associated with these entities for violations relating to the sale of NDIPs. After summarizing the fundamental guidance concerning NDIPs, the 1994 "Interagency Statement on Sales of Nondeposit Investment Products" (the "Interagency Statement"), this article will highlight recent interpretations and clarifications

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