Government Securities Act Regulations: Protection of Customer Securities and Balances

The Department of the Treasury ("Treasury," or "We," or "Us") is issuing in final form an amendment to the customer protection rules in Sec. 403.4 of the regulations issued under the Government Securities Act of 1986 ("GSA"), as amended.\1\ This provision requires entities registered with the Securities and Exchange Commission ("SEC") as specialized government securities brokers and dealers ("registered government securities brokers and dealers") under Sec. 15C(a)(2) of the Securities Exchange Act of 1934 ("the Exchange Act")\2\ to comply with the requirements of the SEC customer protection rule ("SEC Rule 15c3-3") with certain modifications. We published a proposed rule on December 11, 2003, and received no comments. We are therefore adopting the changes as proposed. Specifically, this amendment makes certain conforming technical changes to the GSA regulations that allow for the expansion of collateral that registered government securities brokers and dealers may pledge when borrowing fully paid or excess-margin securities from customers. This final rule allows us to designate additional categories of collateral pursuant to an order issued by Treasury. ---------------------------------------------------------------------------