Community Bank Safeguards

In 1989, ICBA Securities' Board of Directors was made up of 9 directors, 7 of whom were community bankers and 5 of whom were members of the ICBA's Executive Committee.

These prominent community bankers approved a number of policies that were developed to help ensure that ICBA Securities' customer bankers would receive quality investment products, services, and education at competitive market prices.

Three key policies directly affect the customer bank/ICBA Securities relationship:

Minimum Requirements for ICBA Securities Representatives

This policy was written to ensure that ICBA Securities employ capable, experienced and trustworthy representatives. Representatives must meet certain standards before they can be considered for ICBA Securities employment. These minimum requirements include:

Any exceptions to these requirements must be reviewed and approved by ICBA Securities board of community bankers.

This policy has contributed to the fact that there has been no disciplinary action taken against ICBA Securities or any ICBA Securities representative since ICBA Securities' formation in 1988. This exemplary record puts ICBA Securities way ahead when community bankers compare our disciplinary history with those of our competitors.

Suitable Securities for Community Banks

This key policy identifies those securities that are generally suitable for community bank portfolios. ICBA Securities' directors recognize that each bank has unique characteristics and that any one security will not necessarily fit all banks' needs. However, the directors also recognize that current regulations allow banks to purchase some securities that are almost never suitable for the vast majority of community banks.

To help ensure that community bankers avoid inadvertent purchases of unsuitable securities, ICBA Securities' directors passed a policy limiting normal purchases to an approved list of suitable securities. In addition, the directors approved a second list of securities that are suitable under certain circumstances; e.g., some banks may have specific needs that can only be met with securities that are not included on the "suitable securities" list. These securities can be sold only after adequate analysis of need and disclosure of potential risks.

Please contact Jim Reber for ICBA Securities' approved list of suitable securities.

Pricing Policy

ICBA Securities' Pricing Policy is a key ingredient in establishing fair and competitive market pricing. The policy states that ICBA Securities' pricing guidelines will be more stringent than required by ICBA Securities' regulator, the NASD.

Specifically, the policy establishes exact pricing limits for each type of security purchased from or sold to ICBA Securities customer banks. (The specific pricing limits are for internal use and are not available for distribution; however, the general policy itself can be sent to you.)

To ensure compliance, ICBA Securities' President reviews an average of 30 transactions each day (over 7,000 transactions per year). Exceptions to the policy are researched and, if a sale price is determined to be above the current market, the price is adjusted and the excess is returned to the customer bank.

All pricing policy exceptions are reviewed by ICBA Securities board of community bankers.