U.S. Code of Federal Regulations
Regulations most recently checked for updates: Nov 29, 2020
(a) In general. The term “fiduciary capacity” at § 9.2(e) is defined to include “investment adviser, if the bank receives a fee for its investment advice.” In other words, if a bank is providing investment advice for a fee, then it is acting in a fiduciary capacity. For purposes of that definition, “investment adviser” generally means a national bank that provides advice or recommendations concerning the purchase or sale of specific securities, such as a national bank engaged in portfolio advisory and management activities (including acting as investment adviser to a mutual fund). Additionally, the qualifying phrase “if the bank receives a fee for its investment advice” excludes those activities in which the investment advice is merely incidental to other services.
(b) Specific activities - (1) Full-service brokerage. Engaging in full-service brokerage may entail providing investment advice for a fee, depending upon the commission structure and specific facts. Full-service brokerage involves investment advice for a fee if a non-bank broker engaged in that activity is considered an investment adviser under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.).
(2) Activities not involving investment advice for a fee. The following activities generally do not entail providing investment advice for a fee:
(i) Financial advisory and counseling activities, including strategic planning of a financial nature, merger and acquisition advisory services, advisory and structuring services related to project finance transactions, and providing market economic information to customers in general;
(ii) Client-directed investment activities (i.e., the bank has no investment discretion) where investment advice and research may be made available to the client, but the fee does not depend on the provision of investment advice;
(iii) Investment advisory activities incidental to acting as a municipal securities dealer;
(iv) Real estate management services provided to other financial institutions;
(v) Real estate consulting services, including acting as a finder in locating, analyzing, and making recommendations regarding the purchase of property, and making recommendations concerning the sale of property;
(vi) Advisory activities concerning bridge loans;
(vii) Advisory activities for homeowners' associations;
(viii) Advisory activities concerning tax planning and structuring; and
(ix) Investment advisory activities authorized by the OCC under 12 U.S.C. 24(Seventh) as incidental to the business of banking.