Section 16, codified as paragraph seventh of section 24 of the National Bank Act, applied solely to national banks and Federal Reserve System members. It said two things: One, such banks could invest only in debt securities (no equities)-and only in such securities that were authorized by the Comptroller of the Currency, which is the supervisor of national banks. Securities authorized by the Comptroller were defined as "investment securities", and in practice the Comptroller restricted such securities to investment grade securities. Two, no such bank (national bank or Federal Reserve member bank) could (except for investment securities as defined above) deal in securities or stock for its own account, but could do so solely upon the order of and for the account of customers.
Section 20 said that no member bank of the Federal Reserve System (which includes all national banks) could affiliate in any way with a firm engaged in securities underwriting.
Section 21 applies to any institution that accepts "deposits". It prohibits any such institution from underwriting securities. [Section 21 has not been repealed. Bank holding companies underwrite through non-bank affiliates.]
Section 32 prohibited interlocking directorships between member banks and underwriters.
A great book exposing the fraudulent premises of G-S is Eugene NWhite, “Regulation and Reform of Am Banking”. He shows that in the late 20s the banks that had brokerage houses or “securities affiliates” we’re MORE stable and LESS likely to fail (because their risk was diversified) than those which did not have these attachments.