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Can a broker/dealer purchase FDIC-guaranteed debt issued by its holding company or an affiliate bank or thrift for the purpose of making a market?

April 26, 2017affiliate Bank broker COMPANY Dealer debt fdic-guaranteed holding issued purchase Thrift

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Can a broker/dealer purchase FDIC-guaranteed debt issued by its holding company or an affiliate bank or thrift for the purpose of making a market?

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If a broker/dealer purchases debt issued by its holding company or an affiliate bank or thrift, the debt will not be guaranteed by the FDIC as long as it is held by the affiliate broker/dealer. Presuming the debt was issued as FDIC-guaranteed debt, it will again be guaranteed by the FDIC once the broker/dealer sells the debt and a non-affiliated entity owns it.