+-----------------------------------------------------------------------+
| **I. General Issues**                                                 |
+-----------------------------------------------------------------------+
| **1.1 What are the key problems or issues that need to be addressed   |
| by our review of the current regulatory structure for financial       |
| institutions?**                                                       |
+-----------------------------------------------------------------------+
| Advances in communication and technology have led to the              |
| globalization of capital markets. While the United States has long    |
| been viewed as the world's leading capital market, its position is    |
| now being challenged as improved liquidity and quality of many other  |
| market centers around the world have combined to produce credible and |
| attractive alternatives for capital raising. The high quality of      |
| regulatory oversight in the United States -- long seen as one of its  |
| greatest strengths -- has failed to keep pace with a dynamic,         |
| changing marketplace and now threatens to become a burden to capital  |
| flows here.                                                           |
|                                                                       |
| The leading financial services providers, and their clients, are      |
| global in terms of their activities and operations and will gravitate |
| to markets that provide the products they wish to purchase, are       |
| efficient in their operation and execution, impose the least          |
| unnecessary costs and inspire investor confidence. Deutsche Bank and  |
| its peers offer products and services in the United States that often |
| fall within the oversight of multiple regulatory agencies. This can   |
| create unnecessary duplication of regulation and impose burdens on    |
| our compliance and business teams, to the disadvantage of taxpayers.  |
| Overlapping regulation also creates the potential for inconsistent    |
| regulatory treatment of similar products and services. Investors may  |
| suffer twice by these redundancies: in addition to the possibility of |
| higher transaction costs, in some instances US investors lose the     |
| opportunity to take advantage of products that are withheld from the  |
| US but offered elsewhere in the world, due to the legal uncertainties |
| and costs imposed by this duplication. Moreover, the multiplicity of  |
| US regulators can leave gaps in supervision                           |
|                                                                       |
| A related problem is the difference between regulatory goals and      |
| philosophies of different US regulators. For example, some US         |
| regulators have a tradition of primarily emphasizing protection of    |
| retail investors and consumers against fraud, while others operate    |
| from a mandate to ensure financial stability and self-policing. As    |
| markets have converged and consolidated, these different regulatory   |
| approaches have resulted in mismatched expectations among regulators  |
| and a degree of uncertainty among market participants as to what      |
| regulators' expectations are of them.                                 |
|                                                                       |
| Finally, while the questions posed by the review suggest that the US  |
| private litigation system is beyond its purview, we cannot respond    |
| fully without noting that, from the perspective of virtually all      |
| foreign issuers and financial service providers, the most significant |
| concern with the regulatory/legal structure of the US markets is the  |
| US private litigation system. As mentioned in "Sustaining New York's  |
| and the US' Global Financial Services Leadership"[^1] the civil       |
| liability environment is one of the major competitive disadvantages   |
| the US faces in comparison with the United Kingdom. CEOs surveyed     |
| attributed "this US disadvantage to a propensity toward litigation    |
| and concerns that the US legal environment is less fair and less      |
| predictable than the UK environment."                                 |
+-----------------------------------------------------------------------+
| **1.2 Over time, there has been an increasing convergence of products |
| across the traditional "functional" regulatory lines of banking,      |
| insurance, securities, and futures. What do you view as the           |
| significant market developments over the past two decades (e.g.       |
| securitization, institutionalization, financial product innovation    |
| and globalization) and please describe what opportunities and/or      |
| pressures, if any, these developments have created in the regulation  |
| of financial institutions?**                                          |
+-----------------------------------------------------------------------+
| There have been two fundamental drivers of change in the financial    |
| markets over the last 20 years. The first is the revolution of        |
| information technology, which has radically reduced costs, made it    |
| possible to design complex products, and made risk management systems |
| much more robust and sophisticated. The second is geopolitical        |
| change, which has opened new markets around the world, notably in     |
| China, Russia and eastern Europe, and deepened markets in places such |
| as India, nations of the Pacific Rim and many areas of South America. |
|                                                                       |
| Together these two drivers have transformed the markets in many       |
| respects. They have globalized the markets by making it possible for  |
| capital to flow to more places around the world than was possible 20  |
| years ago, with a rapidity that is unprecedented in history. They     |
| have also vastly expanded the variety and complexity of financial     |
| service products, empowering investors to select products ideally     |
| suited for their investment objectives and risk profiles. In          |
| addition, they have facilitated the creation and circulation in the   |
| financial system of an unprecedented amount of wealth, which itself   |
| has become a driver of further market expansion and product           |
| innovation.                                                           |
|                                                                       |
| These transformations of the markets have created pressures on        |
| regulators around the world to stay abreast of new products, and to   |
| better integrate their efforts with colleagues in other nations. Some |
| have done so more successfully than others. In the US the regulatory  |
| response has been complicated to some extent by the highly fragmented |
| nature of US financial services regulation. Inconsistencies between   |
| regulatory approaches that were merely latent 20 years ago have come  |
| to the forefront as new products that cut across regulatory           |
| boundaries have arisen. Coordination with regulators in other nations |
| appears to be excellent in some areas, and spotty in others.          |
| Moreover, it is telling that although US regulators have entered into |
| many memoranda of understanding with foreign counterparts, only       |
| recently have written information-sharing agreements been created     |
| between US banking and securities regulators, and there is still      |
| substantial room for progress in strengthening information flows      |
| between those regulators.                                             |
+-----------------------------------------------------------------------+
| **1.2.1 Does the "functional" regulatory framework under which        |
| banking, securities, insurance, and futures are primarily regulated   |
| by respective functional regulators lead to inefficiencies in the     |
| provision of financial services?**                                    |
+-----------------------------------------------------------------------+
| Overlapping and redundant regulation occurs frequently due to the     |
| division of the U.S. regulatory framework along functional lines. For |
| example, over the years the US system has struggled to come up with a |
| rational way of regulating securities futures products. While         |
| work-around solutions such as the Shad-Johnson accord have been       |
| helpful for periods of time, as new products have arisen new legal    |
| uncertainties have been created that have caused important products   |
| to be offered in all major markets except the US, to the detriment of |
| US investors and the competitiveness of US markets. This phenomenon   |
| even exists within specific sectors of US financial regulation. For   |
| example, the offering of exchange-traded funds to U.S. investors has  |
| been hampered in some instances by uncertainty as to whether the      |
| Investment Company Act of 1940 or the Securities Exchange Act of 1934 |
| controls over a product that has characteristics of both an           |
| asset-management vehicle and an equity security. Booking products     |
| generally requires an assessment of permissibility, capital           |
| treatment, tax treatment, compliance requirements and funding costs   |
| which differ by each legal entity. There are also situations, such as |
| under regulations required by the Gramm-Leach-Bliley Act, where       |
| financial activities have had to be moved from one financial          |
| affiliate to another merely for regulatory convenience under          |
| "functional regulation." These sorts of inefficiencies created by     |
| outmoded concepts of functional regulation are increasingly imposing  |
| opportunity costs as well as the costs of regulatory and compliance   |
| inefficiency on financial institutions and their clients, while doing |
| little to advance legitimate regulatory goals.                        |
|                                                                       |
| In addition, US regulators have recognized some of the overlaps and   |
| gaps in regulatory schemes, and have often been creative and flexible |
| in accommodating new products. The President's Working Group on       |
| Financial Markets has become an important focal point for             |
| coordinating regulation. These are constructive and necessary steps,  |
| but by themselves cannot solve the problem. Many of the costs and     |
| inefficiencies attributable to fragmented functional regulation       |
| result from legal restrictions that impair the efficient and rational |
| delivery of credit, depository and capital market services to         |
| institutional clients. At least with regard to these institutional    |
| services, a long-term solution should include eliminating statutory   |
| requirements that artificially inflate the costs of such services,    |
| such as requirements that different products desired by the same      |
| institutional clients be delivered by separate affiliates and         |
| anti-tying laws that prevent financial institutions from passing on   |
| economies of scale realized when multiple products are delivered to a |
| single client.                                                        |
+-----------------------------------------------------------------------+
| **1.2.2 Does the "functional" regulatory framework pose difficulties  |
| for considering overall risk to the financial system? If so, to what  |
| extent have these difficulties been resolved through regulatory       |
| oversight at the holding company level?**                             |
+-----------------------------------------------------------------------+
| While as noted above functional regulation has limitations in         |
| overseeing markets and products that are increasingly integrated, US  |
| regulators have recognized the weakness of pure functional regulation |
| in assessing overall risks to the financial system, and by            |
| emphasizing oversight at the holding company level have somewhat      |
| mitigated this concern. While the Federal Reserve, the consolidated   |
| supervisor of Deutsche Bank's US operations, has not always been able |
| to easily coordinate the separate efforts of functional regulators    |
| such as the SEC, FINRA and CFTC, these difficulties of coordination   |
| have not risen to the level of posing risk to the stability of        |
| Deutsche Bank or the financial system.                                |
+-----------------------------------------------------------------------+
| **1.2.3 Many countries have moved towards creating a single financial |
| market regulator (e.g., United Kingdom's Financial Services           |
| Authority; Japan's Financial Services Agency; and Germany's Federal   |
| Financial Supervisory Authority (BaFin)). Some countries (e.g.,       |
| Australia and the Netherlands) have adopted a twin peaks model of     |
| regulation, separating prudential safety and soundness regulation and |
| conduct-of-business regulation. What are the strengths and weaknesses |
| of these structural approaches and their applicability in the United  |
| States? What ideas can be gleaned from these structures that would    |
| improve U.S. capital market competitiveness?**                        |
+-----------------------------------------------------------------------+
| Deutsche Bank has experience with a variety of types of national      |
| regulators, including those mentioned in the question. Our primary    |
| regulator is Germany's BaFin, who provide oversight as a single       |
| market regulation model ("SMR"), while the UK's Financial Services    |
| Authority ("FSA") provides conduct-of-business regulation to one of   |
| our most active business branches. Our overall experience with SMR    |
| has been highly positive. Our experience with this regulatory model   |
| suggests that overall it can lead to major efficiencies in            |
| regulation, especially if structural changes are made in the new      |
| organization to streamline its operations. For example, in the case   |
| of the BaFin, the supervision of asset managers was moved from        |
| banking to the securities division, while cross-sectoral departments  |
| were created for topics such as anti-money laundering and terrorist   |
| finance, risk models, consumer and investor protection, international |
| cooperation, and financial stability and integrity. This reflects one |
| major advantage of the SMR model: its flexibility. Internal           |
| organizational structures can be adjusted as necessary or appropriate |
| in order to achieve regulatory objectives without requiring           |
| legislation to redefine the borders of responsibilities between       |
| separate regulators. Moreover, we believe that issues such as         |
| inconsistent interpretations by different groups within the regulator |
| are resolved more quickly and efficiently than when there are         |
| multiple autonomous regulators.                                       |
|                                                                       |
| In Australia safety-and soundness supervision and regulation of       |
| banks, credit unions, superannuation funds, insurance companies and   |
| life insurance companies is carried out by the Australian Prudential  |
| Regulation Authority (\"APRA\") and financial services regulation     |
| (excluding prudential regulation) is carried out by the Australian    |
| Securities & Investments Commission (\"ASIC\"). The reason for this   |
| separation of function is largely historical and a product of         |
| political compromise. Nevertheless, our experience with Australian    |
| regulation has been positive. The Dutch version of the "twin peaks"   |
| model was only introduced at the beginning of 2007, and the           |
| regulatory framework has been further altered by the adoption of the  |
| European Union-wide Markets in Financial Instruments Directive.       |
| Therefore there has not been enough time for us to form a view on how |
| successful that model has been in the Netherlands.                    |
|                                                                       |
| Notwithstanding our experience, which has not suggested any           |
| significant problem with either Australian or Dutch financial         |
| regulation, the theory of the twin peaks regulatory model raises some |
| questions. Any division of regulatory authority can lead to a greater |
| risk of duplication, regulatory gaps and miscommunication, and the    |
| "twin peaks" model has had to deal with these issues. In Australia,   |
| for example, ASIC has deferred regulatory authority in some areas     |
| where APRA is already regulating the same matter and is considered to |
| have greater expertise. In addition, APRA and ASIC have adopted       |
| memoranda of understanding in place which are designed to facilitate  |
| communications between the two regulators on issues of common         |
| interest.                                                             |
|                                                                       |
| Another potential problem with the "twin peaks" model is that the     |
| distinction between safety-and-soundness regulation and               |
| conduct-of-business regulation is somewhat artificial. A              |
| safety-and-soundness regulator will need a robust understanding of    |
| the business activity of a firm in order to make judgments about      |
| regulatory capital requirements, and a conduct-of-business regulator  |
| will want a similar understanding of liquidity and capital            |
| requirement pressures to look for areas that could give rise to       |
| conduct issues. Separating these functions in separate regulators     |
| creates some risk that cooperation and information sharing could      |
| falter, to the detriment of both regulators.                          |
|                                                                       |
| It is also important to underscore that each national regulatory      |
| structure is a product of historical evolution. Due to their          |
| differences in origin and in the characteristics of the markets in    |
| each country, a model that succeeds in one country may not be as well |
| suited elsewhere. In the U.S, both the SEC and the federal bank       |
| regulators have longstanding and distinct traditions and cultures.    |
| Each has been very successful in their specific regulatory realms.    |
| Moreover, the US capital markets are larger and more diverse than any |
| other. There are useful lessons to learn from the experiences of SMRs |
| and other regulatory models, and undoubtedly reforming the overly     |
| complex US model should be informed by the experiences of others.     |
| However, the notion that any of these models could be easily          |
| transplanted into the US should be approached with caution.           |
|                                                                       |
| Our experience with different regulatory models around the globe has  |
| convinced us that the optimal regulatory model involves one primary   |
| regulator that has a strong understanding of the entirety of a firm's |
| business, including business models and risk profiles, and that has a |
| close consultative relationship with the firm's senior management.    |
| This result can be advanced through an SMR, a holding company         |
| regulatory system, or other approaches.                               |
+-----------------------------------------------------------------------+
| **1.3 What should be the key objectives of financial institution      |
| regulation? How could the framework for the regulation of financial   |
| institutions be more closely aligned with the objectives of           |
| regulation? Can our current regulatory framework be improved,         |
| especially in terms of imparting greater market discipline and        |
| providing a more cohesive look at overall financial system risk? If   |
| so, how can it be improved to achieve these goals?**                  |
|                                                                       |
| **In regards to this set of questions, more specifically:**           |
+-----------------------------------------------------------------------+
| [Key goals of financial institution regulation]{.underline}:          |
|                                                                       |
| Assuming that the definition of "financial institution" includes      |
| banking and the issuance and trading of financial instruments         |
| (securities and commodities futures)[^2], the following might be      |
| considered four key goals:                                            |
|                                                                       |
| -   Stability of the system. This includes central bank functions     |
|     such as appropriate controls over currencies, interest rates and  |
|     payment systems. It also includes prudential regulation of        |
|     financial intermediaries, as well as exchanges, clearing houses   |
|     and securities settlement systems, such as risk-based capital     |
|     ratios and regulation of off-balance sheet activities, and        |
|     managing deposit insurance funds.                                 |
|                                                                       |
| -   Integrity of the markets. This encompasses market transparency    |
|     and transparency of intermediaries, rules ensuring effective      |
|     price-discovery mechanisms, as well as prevention of manipulation |
|     and other market abuses.                                          |
|                                                                       |
| -   Customer and investor protection. All customers and investors     |
|     need protection against fraud in order for financial markets to   |
|     function properly. Retail customers and investors also need more  |
|     detailed protection concerning conduct of business. For customers |
|     or investors higher up the scale of sophistication or asset size, |
|     the level of prescriptive protection can be tailored              |
|     appropriately.                                                    |
|                                                                       |
| -   Promotion of competition. Regulators have an interest in          |
|     promoting competition among intermediaries and among markets, as  |
|     well as product innovation consistent with the other three key    |
|     goals.                                                            |
|                                                                       |
| [Alignment of regulatory framework with objectives]{.underline}:      |
|                                                                       |
| The current regulatory systems in the United States have evolved      |
| historically and episodically rather than through a considered        |
| weighing of the optimal regulatory structure to achieve the           |
| objectives outlined above. The US financial regulatory system is      |
| largely based on specialization of regulators based on function, with |
| an element of regulatory competition added in the banking sector due  |
| to the availability of charter choice. As financial products and      |
| services have evolved, the boundaries between different regulatory    |
| regimes have strained. This has resulted in regulatory                |
| inconsistencies and gaps. For example,                                |
|                                                                       |
| -   The Government Accountability Office ("GAO") has pointed to       |
|     situations where holding companies of industrial loan companies   |
|     may pose greater risk of loss to the Deposit Insurance Fund than  |
|     other types of insured depository institutions in a holding       |
|     company structure, due to variations in the authority of the      |
|     regulator overseeing the holding company.                         |
|                                                                       |
| -   The GAO has also pointed out that the Office of Thrift            |
|     Supervision and the Securities and Exchange Commission both have  |
|     jurisdiction over the holding companies of several large          |
|     financial services firms, but have not worked out accountability  |
|     between them for supervising these firms.[^3]                     |
|                                                                       |
| -   The Federal Energy Regulatory Commission ("FERC") and Commodities |
|     Futures Trading Commission ("CFTC") have recently clashed in      |
|     federal court concerning an effort by FERC to assert jurisdiction |
|     over the futures market where activities therein are alleged to   |
|     have affected the physical market for natural gas. Since the CFTC |
|     and FERC have different definitions of various types of           |
|     violations, this conflict could breed considerable regulatory     |
|     confusion in the energy trading area.                             |
|                                                                       |
| -   The Federal Reserve Board permits financial services firms        |
|     affiliated with banks to engage in physical-settled commodities   |
|     trades, subject to an over all quantitative cap of 5 per cent of  |
|     capital. Financial service firms that are not affiliated with     |
|     banks may engage in such transactions without any such            |
|     restriction.                                                      |
|                                                                       |
| Moreover, the key regulatory goals noted above can often be in        |
| conflict. For example, concern with maintaining stability can reduce  |
| competition in some circumstances. If investor protection rules are   |
| made too expansive or burdensome, they can deter new products from    |
| being offered to US investors, also reducing competition. To the      |
| extent that different US regulators do not have a common view as to   |
| the relative importance of each of the goals of financial service     |
| regulation, that difference in emphasis can lead to their working at  |
| cross-purposes.                                                       |
|                                                                       |
| [Areas of potential improvement to the regulatory                     |
| framework]{.underline}:                                               |
|                                                                       |
| The recent consolidation of the NASD and NYSE broker-dealer           |
| regulatory function into a new entity, FINRA, illustrates the         |
| potential for US regulators to take bold and creative steps to        |
| streamline regulation. Many additional steps could be taken, though   |
| unlike the creation of FINRA most will require legislative action.    |
| One area where regulatory consolidation would be particularly         |
| appropriate would be to merge the SEC and the CFTC. Consolidations    |
| among bank regulators also should be considered. As we discuss in     |
| more detail in our answer to question 2.11, the best answer for       |
| banking might be to continue a system of multiple charters, but       |
| adding the option of a universal bank regime. The experience of       |
| foreign regulators with alternate regulatory structures should also   |
| be considered in any fundamental redesign of the financial regulatory |
| system.                                                               |
+-----------------------------------------------------------------------+
| **1.3.1 How should the regulation of financial institutions with      |
| explicit government guarantees differ from financial institutions     |
| without explicit guarantees? Is the current system adequate in this   |
| regard?**                                                             |
+-----------------------------------------------------------------------+
| The government should not impose statutory or regulatory obligations  |
| on financial institutions that receive government guaranties \--      |
| particularly where receipt of the guaranty is involuntary, as in the  |
| case of FDIC insurance for depository institutions \-- that are not   |
| imposed on other businesses that directly compete with the            |
| institution receiving the guaranty unless the obligation is directly  |
| related to protecting the government with respect to its financial    |
| risk in providing the guaranty. For example, FDIC insured             |
| institutions have been subject to more rigorous regulation with       |
| respect to mortgage lending than uninsured institutions. The FDIC     |
| insurance is not a reason to impose those obligations \-- if it is    |
| desirable to make lenders subject to such regulation, all lenders     |
| providing the same product should be subject to the regulation, not   |
| just those receiving the federal insurance on deposits.               |
+-----------------------------------------------------------------------+
| **1.3.2 Is there a need for some type of market stability regulation  |
| for financial institutions without explicit Federal Government        |
| guarantees? If so, what would such regulation entail?**               |
+-----------------------------------------------------------------------+
| The markets themselves have proven to be effective regulators of      |
| institutions holding undue risks when those risks have been made      |
| transparent, consistent with Pillar III under Basle II for the        |
| banking industry. We do not believe that new prescriptive regulation  |
| on non-guaranteed firms is the best way to achieve this end. We would |
| instead support steps to improve transparency and provide the market  |
| place with a comparative perspective into the viability and risk      |
| appetite of individual non-guaranteed institutions.                   |
+-----------------------------------------------------------------------+
| **1.3.3 Does the current system of regulating certain financial       |
| institutions at the holding company level allow for sufficient        |
| amounts of market discipline? Are there ways to improve holding       |
| company regulation to allow for enhanced market discipline?**         |
+-----------------------------------------------------------------------+
| The historical separation of banking from commerce in the US          |
| complicates safety and soundness regulation. Requiring financial      |
| organizations to structure themselves under a shell holding company   |
| for the sole purpose of separating the bank from all commercial       |
| enterprises leads to somewhat illogical results, such as making the   |
| institution receiving the highest credit rating a lower-tier          |
| subsidiary. While bank holding companies have been the subject of     |
| intense regulation for decades, securities firms not affiliated with  |
| banks have only recently become subject to holding company            |
| supervision when the SEC adopted its Consolidated Supervised Entity   |
| program, and it may be too early to evaluate the results. Although    |
| anecdotal evidence suggests that this program is working well, it may |
| be too early to evaluate the results.                                 |
+-----------------------------------------------------------------------+
| **1.3.4 In recent years, debate has emerged about "more efficient"    |
| regulation and the possibility of adopting a "principles-based"       |
| approach to regulation, rather than a "rules-based" approach. Others  |
| suggest that a proper balance between the two is essential. What are  |
| the strengths, weaknesses and feasibility of such approaches, and     |
| could a more "principles-based" approach improve U.S.                 |
| competitiveness?**                                                    |
+-----------------------------------------------------------------------+
| "Principle-based" and "rules-based" are shorthand references to two   |
| techniques of regulation. "Principles-based" regulation is a term     |
| that usually refers to a statement of broad-based behavioral          |
| standards, drafted at a high level of generality and expressing the   |
| reason behind the rule, and having broad application to a diverse     |
| range of circumstances. It can also refer to a regulatory approach in |
| which performance standards specify the outcome required but permit   |
| the regulated entity to determine specific measures to achieve the    |
| outcome. A third meaning can be a regulatory approach that requires   |
| senior management of regulated entities to identify the best way to   |
| organize the firm's business to achieve a broadly-stated regulatory   |
| goal, with the regulator setting out the key elements to be           |
| addressed.[^4]                                                        |
|                                                                       |
| Neither principles-based regulation nor prescriptive rules are ideal  |
| for all circumstances: each involves some tradeoff between concerns   |
| such as ease of application, congruence between the regulatory        |
| objective and the behavior mandated by the regulation, certainty as   |
| to what is required, and risk of "compliance myopia" that honors the  |
| letter but not necessarily the spirit of the regulation.              |
|                                                                       |
| Principle-based and prescriptive rules are not mutually exclusive,    |
| and a regulator can use either approach depending on the              |
| circumstance. An over-reliance on either approach to the exclusion of |
| the other can have suboptimal results in promoting regulatory         |
| objectives. For example, one peril of relying on prescriptive rules   |
| exclusively is that situations will inevitably arise that are not     |
| contemplated by the rule text, and regulatory failure could result.   |
| Exclusive reliance on regulatory principles may also be problematic.  |
| There are many areas that have proven through experience to be        |
| fraught with potential for undesirable or abusive conduct, and for    |
| which prescriptive rules are entirely appropriate. Prescriptive rules |
| make sense, among other instances, where a common protocol is         |
| necessary for fair and efficient markets, such as quoting rules;      |
| where data is generated for surveillance purposes and "apples to      |
| oranges" comparisons should be avoided; and where thresholds are      |
| necessary to produce fairness among competitors, such as what type of |
| activity qualifies as "market-making" with the attendant obligations  |
| and benefits, as well as thresholds for registration and reporting.   |
|                                                                       |
| One approach that can be very productive is to marry principles and   |
| prescription, so that prescriptive rules can be written under the     |
| auspices of controlling principles. This enables the prescriptive     |
| rules to be applied and enforced with reference back to the           |
| principles that they serve, reducing at the margins the potential     |
| that problems will occur due to either the regulator or the firm      |
| losing sight of the underlying purposes that a rule is intended to    |
| serve. Rather than merely analyze whether a prescriptive rule has     |
| been violated, the enforcement posture under this approach would also |
| assess how or whether the rule-offending behavior undermined the      |
| corresponding principle.                                              |
|                                                                       |
| However, in order for any shift toward greater use of principles in   |
| the US regulatory scheme to work, at least three other changes in     |
| regulatory philosophy must accompany it. First, as the approach       |
| outlined above suggests, the enforcement arm of the regulator must    |
| align its philosophy and workings with this approach as well. A       |
| recent McKinsey & Co. report commissioned by Mayor Bloomberg of New   |
| York City and US Senator Schumer noted based on a survey of business  |
| leaders that the "\[r\]egulatory enforcement style also matters, with |
| the U.K.'s measured approach to enforcement seen as more results      |
| oriented and effective than a US approach sometimes described as      |
| punitive and overly public."[^5] The essence of principles-based      |
| regulation is to shift the specific details of standard-setting away  |
| from the regulator and onto firms' senior management. Enforcement     |
| philosophy needs to square with this tolerance of reasonable          |
| independent decision-making by senior managers, so that a firm that   |
| takes a reasonable approach to adopting principles within the context |
| of its own business will not automatically face severe enforcement    |
| action simply because the regulator takes a different *ex post* view  |
| about the sufficiency of the firm's compliance.                       |
|                                                                       |
| Second, because of the greater responsibility placed on senior        |
| management of the firm, a more consultative relationship with the     |
| regulator is important. Firms should feel free to approach regulators |
| at an early stage with concerns, without fear that any communication  |
| with the regulator will give rise to an enforcement action.           |
| Legislation to create a federal "examination privilege" for           |
| SEC-regulated institutions similar to the bank-examination privilege  |
| would be a helpful step.[^6]                                          |
|                                                                       |
| Third, in adopting any principles, the regulator should specify that  |
| the principles do not give rise to any new private right of action.   |
| If principles were to become a basis for expanding private liability, |
| firms would respond in a very defensive way that would eviscerate all |
| of the benefits that might otherwise flow from blending principles    |
| into the regulatory mix.                                              |
+-----------------------------------------------------------------------+
| **1.3.5 Would the U.S. financial regulatory structure benefit if      |
| there was a uniform set of basic principles of regulation that were   |
| agreed upon and adopted by each financial services regulator?**       |
+-----------------------------------------------------------------------+
| A single set of basic principles undergirding all US financial        |
| service regulators would be desirable. This could help, for example,  |
| to minimize instances where two regulators give inconsistent guidance |
| over a new product, or have different priorities in their oversight   |
| of a holding company. Where conflicting guidance or interpretations   |
| by different regulators nevertheless arise, reference back to the     |
| shared principles may make it easier to resolve the conflict.         |
+-----------------------------------------------------------------------+
| **1.4 Does the current regulatory structure adequately address        |
| consumer or investor protection issues? If not, how could we improve  |
| our current regulatory structure to address these issues?**           |
+-----------------------------------------------------------------------+
| Strong participation by retail investors is a hallmark and a strength |
| of the US capital markets. This robust level of investor              |
| participation would not have been possible without the dedication of  |
| US financial service regulators -- particularly the SEC -- to         |
| combating fraud and ensuring fair dealing. It is important that those |
| US financial service regulators that depend on the appropriations     |
| process for their funding continue to receive sufficient resources to |
| pursue this critical objective. The regulatory structure could also   |
| better address consumer and investor protection issues if regulation  |
| adopted a more tiered approach to regulation, as described in our     |
| answer to question 2.3.6 below. Such a tiering of rules, giving more  |
| flexibility to financial service firms in offering products and       |
| services to more sophisticated customers and investors, would help to |
| focus regulatory resources on protection of retail customers and      |
| investors from fraud and overreaching, rather than applying a "one    |
| size fits all" standard to sectors of the market that do not require  |
| the same level of protection.                                         |
+-----------------------------------------------------------------------+
| **1.5 What role should the States have in the regulation of financial |
| institutions? Is there a difference in the appropriate role of the    |
| States depending on financial system protection or consumer and       |
| investor protection aspects of regulation?**                          |
+-----------------------------------------------------------------------+
| States play an important role as the "local cop on the beat" in       |
| protecting against retail fraud. Coordination among states, and       |
| between states and federal regulators, in policing against fraud has  |
| often appeared disjointed.                                            |
|                                                                       |
| In the banking sphere, compliance with state-by-state statutes for    |
| state-chartered institutions can be extremely challenging, as         |
| described more fully in our response to question 2.1.2. In part for   |
| this reason, most banks with a significant national presence have a   |
| federal charter rather than a state charter.                          |
+-----------------------------------------------------------------------+
| **1.6 Europe is putting in place a more integrated single financial   |
| market under its Financial Services Action Plan. Many Asian countries |
| as well are developing their financial markets. Often, these          |
| countries or regions are doing so on the basis of widely adopted      |
| international regulatory standards. Global businesses often cite      |
| concerns about the costs associated with meeting diverse regulatory   |
| standards in the numerous countries in which they operate. To address |
| these issues, some call for greater global regulatory convergence and |
| others call for mutual recognition. To what extent should the design  |
| of regulatory initiatives in the United States be informed by the     |
| competitiveness of U.S. institutions and markets in the global        |
| marketplace? Would the U.S. economy and capital market                |
| competitiveness be better served by pursuing greater global           |
| regulatory convergence?**                                             |
+-----------------------------------------------------------------------+
| As a financial services firm that serves a global demand for          |
| financial services and products, we find that nationally-based        |
| regulatory frameworks have struggled to keep up with the              |
| interconnectivity of financial markets and the demands of investors.  |
| There is a need to strike a balance between preserving regulatory     |
| approaches that serve unique local market characteristics and         |
| regulatory convergence to reflect the global nature of financial      |
| markets and investor desire to access those markets and products.     |
|                                                                       |
| From the perspective of US regulators, eliminating unnecessary        |
| regulatory barriers to the provision of financial services and        |
| financial products should be of critical importance for three         |
| reasons. First, failing to do so ill-serves US investors and tends to |
| drive business into areas where regulatory protections are less       |
| robust. US investors increasingly seek diversification across         |
| markets. To the extent that they are not able to obtain products and  |
| services through the US regulatory framework, technology has made it  |
| much easier for them to bypass the protections of that framework and  |
| access the products in an environment with fewer, if any, regulatory  |
| protections.                                                          |
|                                                                       |
| Second, reducing barriers of national regulation provides US          |
| regulators with the opportunity to exercise global leadership.        |
| Regulators around the world, operating multilaterally through bodies  |
| such as IOSCO, CESR and the European Union, are now actively seeking  |
| ways to reduce and standardize regulatory barriers. If US regulators  |
| are fully engaged in that process, the prospects for global markets   |
| gravitating toward standards that are compatible with the objectives  |
| of US regulation are excellent. If US regulators let other nations    |
| take the lead, it is likely that the standards of important emerging  |
| markets, as well as global standards generally, will follow           |
| regulatory models less compatible with the US regulatory approach.    |
|                                                                       |
| Third, engagement by US regulators with their foreign counterparts is |
| becoming increasingly important to ensuring effective antifraud       |
| protection for US investors. US regulators have done a good job of    |
| developing bilateral memoranda of understanding with other regulators |
| regarding information sharing and enforcement cooperation. Engaging   |
| sister regulatory regimes on steps to better integrate regulatory     |
| standards is a logical next step. To the extent that rulebooks and    |
| regulatory philosophies are in sync, whether through mutual           |
| recognition or standardization/ convergence of regulations,           |
| enforcement cooperation will be more effective.                       |
|                                                                       |
| We regard mutual recognition and regulatory convergence as entirely   |
| compatible approaches to this complex subject. There is no single     |
| approach that works best in all circumstances. Unilateral exemptions  |
| may be appropriate for some situations, such as a recent proposal by  |
| the Securities Industry and Financial Markets Association to the SEC  |
| to broaden its exemption under Rule 15a-6 regarding the ability of    |
| foreign broker-dealers to access US institutional investors, so that  |
| it would go beyond the current limitation to institutions with over   |
| \$100 million in assets. Standardization may be a better approach in  |
| other cases, such as the current work between the Institute of        |
| International Finance and IOSCO to identify and eliminate a number of |
| disparate elements of national regulations. This approach may take    |
| longer in many instances due to the need to amend national            |
| legislation, but could result in substantial cost savings, improved   |
| market efficiency and regulatory transparency. Mutual recognition,    |
| such as that reflected in the CFTC's Part 30 rules which allow        |
| foreign futures commission merchants from recognized jurisdictions to |
| deal with US investors in foreign listed futures contracts, is        |
| another appropriate way of bridging different regulatory regimes, in  |
| situations where regulatory principles are aligned, even if specific  |
| regulatory requirements differ. Mutual recognition has the advantage  |
| of not involving difficult regulatory or legislative changes.         |
| However, in order to work successfully, we believe that mutual        |
| recognition needs to be based on a "top-down" assessment of           |
| regulatory outcomes and principles, rather than a detailed assessment |
| of a foreign counterpart's rulebook.                                  |
+-----------------------------------------------------------------------+
| **II. Specific Issues**                                               |
+-----------------------------------------------------------------------+
| **2.1 Depository Institutions**                                       |
+-----------------------------------------------------------------------+
| **2.1.1 Are multiple charters for insured depository institutions the |
| optimal way to achieve regulatory objectives? What are the strengths  |
| and weaknesses of having charters tied to specific activities or      |
| organizational structures? Are these distinctions as valid and        |
| important today as when these charters were granted?**                |
+-----------------------------------------------------------------------+
| While it may have been necessary at one time to offer multiple        |
| charters to ensure that all sectors of the economy -- commercial and  |
| consumer -- were optimally served, it does not appear to be necessary |
| today, due to the blending of activities of all financial             |
| institutions over the past two decades. For example, savings          |
| institutions are involved in commercial loans, and commercial banks   |
| and investment banks are active in residential mortgage and other     |
| consumer lending. On the other hand, preserving the option of         |
| multiple charters permits financial institutions to choose a license  |
| that limits their activities but also limits the scope of regulation  |
| to which they are subject. It also permits regulators to specialize   |
| in addressing the concerns peculiar to a particular type of           |
| institution's activities. Therefore, while we believe it would be     |
| useful to permit universal banking, an institution that chooses to    |
| limit itself only to consumer lending should be able to avoid the     |
| intensive investor protection regulatory scheme applicable to         |
| securities broker-dealers. Indeed, even a universal bank may choose   |
| to have a subsidiary dedicated to one specific type of financial      |
| services activity in order to better organize and focus its           |
| activities.                                                           |
+-----------------------------------------------------------------------+
| **2.1.2 What are the strengths and weaknesses of the dual banking     |
| system?**                                                             |
+-----------------------------------------------------------------------+
| The strength of the system is that it has permitted one sector of the |
| banking system to experiment with new activities without risking a    |
| meltdown of the entire banking system. Derivatives are a classic      |
| example. National banks were given limited ability to engage in a     |
| narrow range of derivative activities. Once they proved viable, state |
| banks gradually were given the same ability by their state            |
| regulators. Meanwhile, the OCC was able to permit national banks to   |
| expand the scope of these activities. On the other hand, state banks  |
| are able to engage in some activities -- particularly agency          |
| activities -- not permitted for national banks. The effect of this    |
| duality is to allow a portion of the banking sector to engage in new  |
| activities. If such activities prove safe and effective, they can be  |
| expanded to the rest of the industry; if not, only a relative handful |
| of institutions are adversely affected.                               |
|                                                                       |
| The weakness of the system is that it becomes intolerably complicated |
| to determine which laws are applicable to a given bank. Some state    |
| laws, but not others, apply to national banks; while for a state      |
| chartered bank, figuring out how to comply with overlapping but not   |
| altogether consistent state and federal laws is a challenge. This     |
| weakness is exacerbated for financial institutions operating across   |
| state lines, but can be equally complicated even for an institution   |
| operating solely within a single state.                               |
|                                                                       |
| In addition, state chartered banks must submit to two sets of         |
| supervisors (State and Federal) who are charged with the same         |
| objective of ensuring the bank is run in a safe and sound manner.     |
| While the supervisors often coordinate their activities, it is        |
| clearly a redundant system. Also, as the Federal Reserve has broader  |
| supervisory scope than the State supervisors, there is a natural      |
| tendency for the State supervisors to participate in reviews beyond   |
| their regulatory remit.                                               |
+-----------------------------------------------------------------------+
| **2.1.3 What is the optimal role for a deposit insurer in depository  |
| institution regulation and supervision? For example, should the       |
| insurer be the primary regulator for all insured depository           |
| institutions, should it have back-up regulatory authority, or should  |
| its functions be limited to the pricing of deposit insurance, or      |
| other functions?**                                                    |
+-----------------------------------------------------------------------+
| We believe the role of the deposit insurer should be limited to the   |
| pricing of deposit insurance. While this will require the agency to   |
| monitor the condition of the insured institution, it should not have  |
| regulatory authority beyond the ability to impose a pricing scheme    |
| and to develop procedures related to receivership. Any examination    |
| authority should be exercised only as part of an examination being    |
| conducted by a primary regulator.                                     |
+-----------------------------------------------------------------------+
| **2.1.4 What role should the central bank have in bank regulation and |
| supervision? Is central bank regulatory authority necessary for the   |
| development of monetary policy?**                                     |
+-----------------------------------------------------------------------+
| We believe it is important for the central bank to have a role in     |
| regulating and supervising depository institutions. It appears, for   |
| example, that the ability of the Federal Reserve to react to the      |
| current liquidity challenges has been enhanced by the knowledge of    |
| market conditions it has derived from its supervisory role, and its   |
| ability to fashion temporary accommodations has been enhanced by its  |
| regulatory role (e.g., waivers of 23A for certain transactions        |
| designed to enhance banks' ability to provide liquidity to the        |
| market).                                                              |
|                                                                       |
| Whether or not the role of the Federal Reserve needs to be as         |
| expansive and pervasive as it currently is depends on whether the US  |
| will continue to require banking organizations to structure           |
| themselves as shell holding companies with operating subsidiaries in  |
| conformity with the historical objective of separating banking from   |
| commerce. If so, then the Federal Reserve is the logical regulator of |
| holding companies to ensure a consistent regulatory scheme across     |
| banking organizations that may hold national or state bank            |
| subsidiaries, or both. If universal banking were to be permitted, and |
| the dual banking system were to be retained, the Federal Reserve      |
| could be assigned regulatory authority only to the extent necessary   |
| to achieve consistency of regulation where that is desirable, but     |
| could be given back-up supervisory authority that would enable it to  |
| continue to access the information it needs to conduct monetary       |
| policy (which would include the ability to take steps to stabilize    |
| markets when necessary). Equally, we see the Fed\'s familiarity with  |
| our institution and practices (borne of the supervisory function) to  |
| provide key perspective into the challenges we face during times of   |
| systemic stress. We believe this perspective has been helpful to the  |
| Fed in calibrating its monetary policy response to the need at hand.  |
| We believe this is a useful link that should be preserved.            |
+-----------------------------------------------------------------------+
| **2.1.5 Is the current framework for regulating bank or financial     |
| holding companies with depository institution subsidiaries            |
| appropriate? Are there other regulatory frameworks that could or      |
| should be considered to limit the transfer of the safety net          |
| associated with insured depository institutions?**                    |
+-----------------------------------------------------------------------+
| As reflected by the availability of financial subsidiaries, which can |
| engage in activities prohibited for their parent banks, the affiliate |
| transaction restrictions in sections 23A and 23B could be adapted to  |
| provide adequate protection against transferring the benefits of the  |
| federal safety net without requiring that banking organizations       |
| operate through a shell holding company that separates the bank from  |
| other affiliates providing financial services. The OCC could be given |
| authority to regulate and supervise national banks, with the Federal  |
| Reserve being given authority to regulate and supervise state banks   |
| and back-up authority to supervise national banks.                    |
+-----------------------------------------------------------------------+
| **2.1.6 What are the key consumer protection elements associated with |
| products offered by depository institutions? What is the best         |
| regulatory enforcement mechanism for these elements?**                |
+-----------------------------------------------------------------------+
| In the US, the pervasive regulatory and supervisory scheme applicable |
| to all depository institutions is uniquely suited to fostering a      |
| culture of compliance that is the most efficient way to ensure        |
| conduct consistent with the objectives of protecting consumers. It is |
| not a coincidence that the worst excesses among mortgage originators  |
| that have led to the current financial difficulties were committed by |
| originators not affiliated with depository institutions. Thus, even   |
| where financial firms originated mortgages from entities other than   |
| their depository institutions subsidiaries, originations were much    |
| more closely aligned with consumer protection objectives than         |
| mortgages originated by similar entities that were not affiliated     |
| with depository institutions. One reason is that a bank's compliance  |
| with consumer protection laws has become linked to the Community      |
| Reinvestment Act examination process, that can directly impact the    |
| ability of its parent bank holding company to retain its status as a  |
| financial holding company, and, therefore, the eligibility of the     |
| parent company to continue to engage in securities, insurance, and    |
| venture capital activities that would be unavailable if financial     |
| holding company status were to be lost.                               |
|                                                                       |
| The relative effectiveness of the federal regulatory system of        |
| enforcing consumer protection ideals suggests that federal law, and   |
| not state law, is the best mechanism for regulating and enforcing     |
| these elements. This would make compliance with consumer protection   |
| laws much easier by eliminating the need to monitor and comply with   |
| laws adopted by the 50 states and their political subdivisions. The   |
| US has, perhaps more than any other country, benefited from a robust  |
| market for consumer financial services, and it would be in the        |
| national interests of the US to eliminate the artificial impediments  |
| to efficient -- and therefore less expensive -- lending that arise    |
| from requiring consumer lenders to comply with a myriad of            |
| overlapping and sometimes inconsistent local laws.                    |
+-----------------------------------------------------------------------+
| **2.2 Insurance**                                                     |
+-----------------------------------------------------------------------+
| **2.2.1 What are the costs and benefits of State-based regulation of  |
| the insurance industry?**                                             |
+-----------------------------------------------------------------------+
| Since Deutsche Bank has relatively limited direct experience          |
| operating a business in the US insurance industry, we will defer to   |
| other commenters regarding the questions in this section.             |
+-----------------------------------------------------------------------+
| **2.2.2 What are the key Federal interests for establishing a         |
| presence or greater involvement in insurance regulation? What         |
| regulatory structure would best achieve these goals/interests?**      |
+-----------------------------------------------------------------------+
|                                                                       |
+-----------------------------------------------------------------------+
| **2.2.3 Should the States continue to have a role (or the sole role)  |
| in insurance regulation? Insurance regulation is already somewhat     |
| bifurcated between retail and wholesale companies (e.g., surplus      |
| lines carriers). Does the current structure work? How could that      |
| structure be improved?**                                              |
+-----------------------------------------------------------------------+
|                                                                       |
+-----------------------------------------------------------------------+
| **2.2.4 States have taken an active role in some aspects of the       |
| insurance marketplace (e.g., workers' compensation and residual       |
| markets for hard to place risks) for various policy reasons. Are      |
| these policy reasons still valid? Are these necessarily met through   |
| State (as opposed to federal) regulation?**                           |
+-----------------------------------------------------------------------+
|                                                                       |
+-----------------------------------------------------------------------+
| **2.3 Securities and Futures**                                        |
+-----------------------------------------------------------------------+
| **2.3.1 Is there a continued rationale for distinguishing between     |
| securities and futures products and their respective                  |
| intermediaries?**                                                     |
+-----------------------------------------------------------------------+
| Unlike the United States, in most of the world all financial          |
| instruments are under a common regulatory framework. In contrast, in  |
| the US commodity markets are regulated by the CFTC while securities   |
| markets are regulated by the SEC. This structure arose from the fact  |
| that in past decades the securities and commodities markets were very |
| distinct, operating in different fashions and with very little        |
| interaction. Underlying most futures contracts were commodities and   |
| agricultural products, rather than cash-settled securities and bonds. |
| Today that distinction has been erased, as commodities and futures    |
| are written on a wide variety of financial instruments and have       |
| become deeply interlinked with the securities markets. Combining the  |
| regulation of securities and futures products would therefore make a  |
| great deal of sense, and would be a logical early step in a           |
| restructuring of US financial services regulation.                    |
+-----------------------------------------------------------------------+
| **2.3.2 Is there a continued rationale for having separate regulators |
| for these types of financial products and institutions?**             |
+-----------------------------------------------------------------------+
| See answer to questions 2.3.1 above.                                  |
+-----------------------------------------------------------------------+
| **2.3.3 What type of regulation would be optimal for firms that       |
| provide financial services related to securities and futures          |
| products? Should this regulation be driven by the need to protect     |
| customers or by the broader issues of market integrity and financial  |
| system stability?**                                                   |
+-----------------------------------------------------------------------+
| Given the expanded role of futures on securities and other financial  |
| instruments, regulation by the SEC would be preferred, so that        |
| regulation of financial services related to securities can be unified |
| in one regulator. As is reflected in the SEC's statutory mandate,     |
| regulation in this and other areas should combine protecting          |
| investors from fraud, and promotion of capital formation and          |
| competition. We believe that these goals encompass the four           |
| fundamental goals of financial services regulation described in our   |
| answer to question 1.3 above, and are mutually reinforcing, not       |
| contradictory.                                                        |
+-----------------------------------------------------------------------+
| **2.3.4 What is the optimal role for the states in securities and     |
| futures regulation?**                                                 |
+-----------------------------------------------------------------------+
| As stated in our response to Question 1.5, states are well-suited to  |
| protect against fraud at the retail level, and should continue to     |
| have a role in that important function.                               |
+-----------------------------------------------------------------------+
| **2.3.5 What are the key consumer/investor protection elements        |
| associated with products offered by securities and futures firms?     |
| Should there be a regulatory distinction among retail, institutional, |
| wholesale, commercial, and hedging customers?**                       |
+-----------------------------------------------------------------------+
| See answer to question 2.3.6 below.                                   |
+-----------------------------------------------------------------------+
| **2.3.6 Would it be useful to apply some of the principles of the     |
| Commodity Futures Modernization Act of 2000 to the securities         |
| regulatory regime? Is a tiered system of regulation appropriate? Is   |
| it appropriate to make distinctions based on the relative             |
| sophistication of the market participants and/or the integrity of the |
| market?**                                                             |
+-----------------------------------------------------------------------+
| When the US federal securities laws were enacted, retail investors    |
| overwhelmingly predominated as market participants. The structure of  |
| the securities laws and the attitude of the SEC and self-regulatory   |
| organizations such as the NASD and New York Stock Exchange reflected  |
| that reality, with a regulatory approach that set the world standard  |
| for quality of investor protection. The high level of protection in   |
| the US system for retail investors continues to be in many ways an    |
| advantage of the US markets. However, the structure of US markets has |
| changed over the past 70 years, and today institutions (including     |
| institutions such as mutual and pension funds that intermediate for   |
| most retail investors) are much more significant participants. Rather |
| than a single set of rules for all market participants, today's       |
| regulatory landscape calls for differentiated regulatory treatment of |
| the wholesale and retail sectors. For example, product availability   |
| and investor protection standards could be tailored so that           |
| institutional investors with the sophistication and resources to      |
| protect themselves have ready access to products and services that    |
| may receive greater regulatory scrutiny, or not be permitted at all,  |
| in the case of retail investors.                                      |
+-----------------------------------------------------------------------+

[^1]: Bloomberg Schumer Report prepared by McKinsey & Company and New
    York City Economic Development Corporation.

[^2]: We exclude insurance since our experience with the US insurance
    business is limited. However, we are not aware that including
    insurance as part of financial institution regulation would change
    the nature of these goals.

[^3]: See Financial Regulation: Industry Trends Continue to Challenge
    the Federal Regulatory Structure, GAO-08-32 (October, 2007), at 4-5.

[^4]: An excellent discussion of these separate strands of
    principles-based regulation can be found in a paper by the Herbert
    Smith law firm, *Making Principles-Based Regulation A Success*,
    April 2007, available at
    [http://www.lse.ac.uk/collections/law/projects/5924%20PBR%20Flyer%20D2.pdf](http://www.lse.ac.uk/collections/law/projects/5924 PBR Flyer D2.pdf)
    (checked on November 13, 2007).

[^5]: Bloomberg-Schumer Report, prepared by McKinsey & Co. and New York
    City Economic Development Corporation, at 17.

[^6]: ^?^ The report by the Commission on the Regulation of US Capital
    Markets in the 21^st^ Century, issued earlier this year, included
    this as one of its recommendations.
    [http://www.uschamber.com/NR/rdonlyres/ex4nk2agcvtretp2osaiperiqoczkvhtq6w5f5vwsh6mef4snh3atd7n4b256hexty4wcc7i
    3eq4thca4vdnoqovurg/0703capmarkets_summ.pdf](http://www.uschamber.com/NR/rdonlyres/ex4nk2agcvtretp2osaiperiqoczkvhtq6w5f5vwsh6mef4snh3atd7n4b256hexty4wcc7i 3eq4thca4vdnoqovurg/0703capmarkets_summ.pdf)
    at 19.