§1426a Exclusion From Certain Requirements

Summary

Exempts the Federal Home Loan Banks from several federal securities rules. It says the Banks do not have to follow sections 78m(e), 78n(a), and 78n(c) of title 15 or related SEC rules; they are also exempt from section 78o for transactions in their capital stock, section 78q–1 for transfers of their securities, and the Trust Indenture Act of 1939. Members of the system are also exempt from certain owner-reporting and transaction rules in sections 78m(d), 78m(f), 78m(g), 78n(d), and 78p of title 15 when dealing in Bank capital stock. The law treats the Banks’ capital stock (issued under section 1426) and their debentures, bonds, and other obligations (issued under section 1431) as exempt or government securities under the listed title 15 provisions. People who trade these Bank securities are brokers or dealers but are not treated as “government securities” brokers or dealers under the cited rules. The Banks are excused from periodic reporting about ordinary related-party deals with members and unregistered equity sales, and SEC tender-offer rules do not apply to Bank capital stock. The SEC must create rules to carry this out and should consider specified accounting issues (payment to the Resolution Funding Corporation; combined Bank financial statements; classification of redeemable capital stock; joint and several obligations). Defined terms: “Bank/Federal Home Loan Bank/member/Federal Home Loan Bank System” = as in section 1422; “Commission” = Securities and Exchange Commission; “securities laws” = as in section 78c(a)(47) of title 15.