Securities that commercial banks cannot underwrite directly. In a series of steps since 1987, the Federal Reserve Board has allowed securities subsidiaries of bank holding companies to engage in limited underwriting of bank "ineligible securities." (Federal Reserve-Banking Regulation) In the U.S. these special subsidiaries are called "section 20 subsidiaries" or "underwriting subsidiaries" which are owned by bank holding companies, however, they are separately incorporated and separately capitalized. Section 20 subsidiaries, subject to approval of an application submitted to the Federal Reserve Board of Governors (amongst other things), may underwrite any manner of debt and equity securities subject to certain revenue limitations. Section 20 subsidiaries are very actively involved in private placements and "riskless principal" transactions, which are permissible activities because they meet the "closely related to banking test." (Federal Reserve-Bulletin)