Securities subsidiaries were created when the Federal Reserve Board allowed securities firms owned by banks to begin dealing in commercial paper and municipal fixed-income securities on a limited basis. They were permitted to expand their operations into underwriting stocks and corporate bonds in 1990. Their underwriting was initially limited to 5% of bank revenue and was later raised to 25% before the restrictions were completely abolished in 1999.
Security subsidiaries are currently being established around the world.
Investment dictionary. Academic. 2012.