What does it mean for a bank to act as a fiduciary for purposes of Exchange Act Section 3(a)(5)(C)(ii)?
Answer #9: The exception for trustee and fiduciary transactions applies when the bank buys or sells securities for investment purposes for accounts for which the bank acts as a trustee or fiduciary. In giving meaning to the term “fiduciary” in Section 3(a)(5)(C)(ii), we look to the legislative history, which states that Exchange Act Section 3(a)(5) “excepts a bank from the definition of ‘dealer’ when it buys and sells securities for investment purposes for the bank or for accounts for which the bank acts as trustee or fiduciary. This mirrors existing law distinguishing between investors and dealers, and is limited to the portfolio trading of the bank and accounts for which it makes investment decisions.” H.R. Rep. No. 106-74, pt. 3, at 170-71(1999).
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