Regulation 9

  

Categories: Regulations, Trading

“Regulation 9” is the name of the area where all the sick and malnourished aliens were sent after their ship was discovered hovering above Johannesburg, South Africa. Eh...wait a second. That’s the premise behind District 9, a sci-fi movie that came out in 2009. Let’s try this again.

“Regulation 9” is a policy that allows national banks to act as fiduciaries. This means they can handle stocks and bonds, manage investment funds, and act as financial trustees. Regulation 9 only applies to national banks, and they can only get their fiduciary-ness on in states that don’t have laws against it. There are lots of rules that guide the types of funds a bank can offer and how the banks are supposed to monitor and report their fiduciary activities, just so the government can be sure they’re not being shady.

So maybe Regulation 9 isn’t quite as fascinating as a camp for sick extra-terrestrials, but it does give banks—and their clients—easier access to certain investment opportunities. Which is pretty cool.

Related or Semi-related Video

Finance: What does it mean to have fiduc...51 Views

00:00

Finance a la Shmoop! What does it mean to have fiduciary obligation? Alright well

00:09

fiduciary refers to the responsible person, who has oversight, above a given

00:15

financial transaction, or process. That is, it is the fiduciary obligation, of the

00:21

head of a corporation's Audit Committee, to be certain that the

00:25

accounting process is handled fairly, objectively, inclusively and thoroughly [boss overseeing worker]

00:29

and there are a few other ly's in there, but well you get the gist. Doesn't it

00:34

seem strange, that some companies just seem to get into the same kind of

00:39

trouble again and again. Remember the BP oil spill, well it wasn't the first time

00:45

they'd had, an accident. You know, if you can call that spill only an accident.

00:49

What kind of oversight did they have? Any? Well some companies just have a [man carrying oil barrel

00:54

corporate culture that's run by the notion, that well, whatever isn't caught

00:58

as a crime, is legal. Lots of Wall Street stock brokerages came and went this

01:03

way. Yah, remember the Wolf of Wall Street? Kind of like that. Well what is

01:06

the obligation of a responsible party when faced with ethical dilemmas? Where

01:11

does the obligation start and stop? Should fiduciaries be held to a higher

01:15

personal standard than normal people? Yah, kind of the, you know, Harvey

01:20

Weinstein effect there. Yes, No, maybe, alright. Right, all three times. [question ABCD chart]

01:24

It's definitely yes, no, or maybe.

Up Next

Finance: What are Prudent Investor Rule Standards, the Know Your Client Rule and Unsuitable Recommendations?
8 Views

What are Prudent Investor Rule Standards, the Know Your Client Rule, and unsuitable recommendations?

Find other enlightening terms in Shmoop Finance Genius Bar(f)