Opinion ID: 287861
Heading Depth: 2
Heading Rank: 3

Heading: Purchase by the Account of securities underwritten by the Bank

Text: 57 The danger that the Account's funds might be used to promote the Bank's investment banking business is relevant generally to the exemption from 10(c) and specifically to the exemption from 10(b)(3). Section 10(b)(3) would have required that a majority of the directors of the Account be unaffiliated with an investment banker. The Bank is in the investment banking business to the extent that it participates in syndicates which underwrite debt securities of governmental authorities. 58 I concur in the Commission's judgment that there is no basis for concern that the Bank can or will use the Account to further its limited investment banking business. The Account is primarily a stock fund. It is not permitted to purchase any securities from the Bank, 15 U.S.C. 80a-17(a), and cannot purchase government securities from another member of a syndicate where the Bank participates as principal underwriter. 15 U.SC. 80a-10(f). The Commission conditioned the exemption by prohibiting purchases from syndicate members even after the Syndicate has terminated but the members hold unsold allotments. 59