4-777
DODD-FRANK WALL
STREET REFORM AND CONSUMER PROTECTION ACT
SECTION 618—Securities Holding Companies
(a) Definitions. In this
section—
(1) the term “associated
person of a securities holding company” means a person directly or
indirectly controlling, controlled by, or under common control with,
a securities holding company;
(2) the term “foreign bank” has the same
meaning as in section 1(b)(7) of the International Banking Act (12
U.S.C. 3101(7));
(3)
the term “insured bank” has the same meaning as in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813);
(4) the term “securities holding company”—
(A) means—
(i) a person (other than a natural person)
that owns or controls 1 or more brokers or dealers registered with
the Commission; and
(ii)
the associated persons of a person described in clause (i); and
(B)
does not include a person that is—
(i) a nonbank financial company
supervised by the Board under title I;
(ii) an insured bank (other than an institution
described in subparagraphs (D), (F), or (H) of section 2(c)(2) of
the Bank Holding Company Act of 1956 (12 U.S.C. 1841 (c)(2))) or a
savings association;
(iii)
an affiliate of an insured bank (other than an institution described
in subparagraphs (D), (F), or (H) of section 2(c)(2) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841 (c)(2))) or an affiliate of a
savings association;
(iv)
a foreign bank, foreign company, or company that is described in section
8(a) of the International Banking Act of 1978 (12 U.S.C. 3106(a));
(v) a foreign bank that
controls, directly or indirectly, a corporation chartered under section
25A of the Federal Reserve Act (12 U.S.C. 611 et seq.); or
(vi) subject to comprehensive
consolidated supervision by a foreign regulator;
(5) the term
“supervised securities holding company” means a securities holding
company that is supervised by the Board of Governors under this section;
and
(6) the terms “affiliate”,
“bank”, “bank holding company”, “company”, “control”, “savings association”,
and “subsidiary” have the same meanings as in section 2 of the Bank
Holding Company Act of 1956.
(b) Supervision of a securities holding company
not having a bank or savings association affiliate.
(1) In general. A securities holding company that is required by a foreign regulator
or provision of foreign law to be subject to comprehensive consolidated
supervision may register with the Board of Governors under paragraph
(2) to become a supervised securities holding company. Any securities
holding company filing such a registration shall be supervised in
accordance with this section, and shall comply with the rules and
orders prescribed by the Board of Governors applicable to supervised
securities holding companies.
(2) Registration
as a supervised securities holding company.
(A) Registration. A securities holding company
that elects to be subject to comprehensive consolidated supervision
shall register by filing with the Board of Governors such information
and documents as the Board of Governors, by regulation, may prescribe
as necessary or appropriate in furtherance of the purposes of this
section.
(B) Effective date. A securities holding company
that registers under subparagraph (A) shall be deemed to be a supervised
securities holding company, effective on the date that is 45 days
after the date of receipt of the registration information and documents
under subparagraph (A) by the Board of Governors, or within such shorter
period as the Board of Governors, by rule or order, may determine.
(c) Supervision of securities holding companies.
(1) Recordkeeping
and reporting.
(A) Recordkeeping
and reporting required. Each supervised securities holding company
and each affiliate of a supervised securities holding company shall
make and keep for periods determined by the Board of Governors such
records, furnish copies of such records, and make such reports, as
the Board of Governors determines to be necessary or appropriate to
carry out this section, to prevent evasions thereof, and to monitor
compliance by the supervised securities holding company or affiliate
with applicable provisions of law.
(B) Form and
contents.
(i) In general. Any record or report required to be made, furnished, or kept under
this paragraph shall—
(I) be prepared in such form and according to such specifications
(including certification by a registered public accounting firm),
as the Board of Governors may require; and
(II) be provided promptly to the Board of
Governors at any time, upon request by the Board of Governors.
(ii) Contents. Records and reports required
to be made, furnished, or kept under this paragraph may include—
(I) a balance sheet or income statement of
the supervised securities holding company or an affiliate of a supervised
securities holding company;
(II) an assessment of the consolidated capital and liquidity of the
supervised securities holding company;
(III) a report by an independent auditor
attesting to the compliance of the supervised securities holding company
with the internal risk management and internal control objectives
of the supervised securities holding company; and
(IV) a report concerning the extent to which
the supervised securities holding company or affiliate has complied
with the provisions of this section and any regulations prescribed
and orders issued under this section.
(2) Use of existing reports.
(A) In general. The Board of Governors shall,
to the fullest extent possible, accept reports in fulfillment of the
requirements of this paragraph that a supervised securities holding
company or an affiliate of a supervised securities holding company
has been required to provide to another regulatory agency or a self-regulatory
organization.
(B) Availability. A supervised securities holding
company or an affiliate of a supervised securities holding company
shall promptly provide to the Board of Governors, at the request of
the Board of Governors, any report described in subparagraph (A),
as permitted by law.
(3) Examination
authority.
(A) Focus
of examination authority. The Board of Governors may make examinations
of any supervised securities holding company and any affiliate of
a supervised securities holding company to carry out this subsection,
to prevent evasions thereof, and to monitor compliance by the supervised
securities holding company or affiliate with applicable provisions
of law.
(B) Deference to other examinations. For purposes
of this subparagraph, the Board of Governors shall, to the fullest
extent possible, use the reports of examination made by other appropriate
Federal or State regulatory authorities with respect to any functionally
regulated subsidiary or any institution described in subparagraph
(D), (F), or (H) of section 2(c)(2) of the Bank Holding Company Act
of 1956 (12 U.S.C. 1841 (c)(2)).
(d) Capital and risk management.
(1) In general. The Board of Governors shall, by regulation or order,
prescribe capital adequacy and other risk management standards for
supervised securities holding companies that are appropriate to protect
the safety and soundness of the supervised securities holding companies
and address the risks posed to financial stability by supervised securities
holding companies.
(2) Differentiation. In imposing standards
under this subsection, the Board of Governors may differentiate among
supervised securities holding companies on an individual basis, or
by category, taking into consideration the requirements under paragraph
(3).
(3) Content. Any standards imposed on a supervised
securities holding company under this subsection shall take into account—
(A) the differences among types of business activities carried out
by the supervised securities holding company;
(B) the amount and nature of the financial
assets of the supervised securities holding company;
(C) the amount and nature of the liabilities
of the supervised securities holding company, including the degree
of reliance on short-term funding;
(D) the extent and nature of the off-balance
sheet exposures of the supervised securities holding company;
(E) the extent and nature
of the transactions and relationships of the supervised securities
holding company with other financial companies;
(F) the importance of the supervised
securities holding company as a source of credit for households, businesses,
and State and local governments, and as a source of liquidity for
the financial system; and
(G) the nature, scope, and mix of the
activities of the supervised securities holding company.
(4) Notice. A capital requirement imposed under
this subsection may not take effect earlier than 180 days after the
date on which a supervised securities holding company is provided
notice of the capital requirement.
(e) Other provisions of law applicable to supervised
securities holding companies.
(1) Federal Deposit
Insurance Act. Subsections (b), (c) through (s), and (u) of section
8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) shall apply
to any supervised securities holding company, and to any subsidiary
(other than a bank or an institution described in subparagraph (D),
(F), or (H) of section 2(c)(2) of the Bank Holding Company Act of
1956 (12 U.S.C. 1841 (c)(2))) of a supervised securities holding company,
in the same manner as such subsections apply to a bank holding company
for which the Board of Governors is the appropriate Federal banking
agency. For purposes of applying such subsections to a supervised
securities holding company or a subsidiary (other than a bank or an
institution described in subparagraph (D), (F), or (H) of section
2(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841 (c)(2)))
of a supervised securities holding company, the Board of Governors
shall be deemed the appropriate Federal banking agency for the supervised
securities holding company or subsidiary.
(2) Bank Holding
Company Act of 1956. Except as the Board of Governors may otherwise
provide by regulation or order, a supervised securities holding company
shall be subject to the provisions of the Bank Holding Company Act
of 1956 (12 U.S.C. 1841 et seq.) in the same manner and to
the same extent a bank holding company is subject to such provisions,
except that a supervised securities holding company may not, by reason
of this paragraph, be deemed to be a bank holding company for purposes
of section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843).
[12 USC 1850a.]