Amendments to Regulations for the Government Securities Act of 1986

The Department of the Treasury (``Department'' or ``Treasury'') is publishing, as a final rule, amendments to the recordkeeping rules in part 404 and the reporting rules in part 405 of the regulations issued under the Government Securities Act of 1986 (``GSA''). The recordkeeping amendment requires entities registered with the Securities and Exchange Commission (``SEC'') as specialized government securities brokers and dealers (``registered government securities brokers and dealers'') under section 15C(a)(2) of the Securities Exchange Act of 1934 (the ``Exchange Act'') (15 U.S.C. 78o- 5(a)(2)) to maintain and preserve records concerning the financial and securities activities of affiliates whose business activities are reasonably likely to have a material impact on the financial or operational condition of the registered government securities brokers and dealers. The reporting amendment requires registered government securities brokers and dealers to file with the SEC quarterly summary reports of the information required to be maintained and preserved by the recordkeeping amendment. The amendments (``risk assessment rules'') parallel the SEC's final temporary risk assessment rules applicable to brokers and dealers that conduct general or municipal securities businesses (``registered brokers and dealers''). The Department's risk assessment rules are being promulgated pursuant to the authority granted to the Department by the Market Reform Act of 1990 (the ``Reform Act'') and are intended to provide regulators with access to information concerning the financial risk posed to registered government securities brokers and dealers--and to the securities markets as a whole--as a result of certain financial and securities activities conducted by affiliates within holding company structures. The Department is adopting the amendments essentially unchanged from their proposed form.