(a) Applicability of sections 23A and 23B to foreign banks engaged in
underwriting insurance, underwriting or dealing in securities, merchant
banking, or insurance company investment in the United States. Except as provided in this subpart, sections 23A and 23B of the
Federal Reserve Act and the provisions of this regulation apply to
each U.S. branch, agency, or commercial lending company of a foreign
bank in the same manner and to the same extent as if the branch, agency,
or commercial lending company were a member bank.
(b) Affiliate defined. For purposes
of this subpart, any company that would be an affiliate of a U.S.
branch, agency, or commercial lending company of a foreign bank if
such branch, agency, or commercial lending company were a member bank
is an affiliate of the branch, agency, or commercial lending company
if the company also is—
(1) directly engaged in the United States
in any of the following activities:
(i) insurance underwriting
pursuant to section 4(k)(4)(B) of the Bank Holding Company Act (12
USC 1843(k)(4)(B));
(ii) securities underwriting, dealing, or market making pursuant
to section 4(k)(4)(E) of the Bank Holding Company Act (12 USC 1843(k)(4)(E));
(iii) merchant banking
activities pursuant to section 4(k)(4)(H) of the Bank Holding Company
Act (12 USC 1843(k)(4)(H)) (but only to the extent that the proceeds
of the transaction are used for the purpose of funding the affiliate’s
merchant banking activities);
(iv) insurance company investment activities
pursuant to section 4(k)(4)(I) of the Bank Holding Company Act (12
USC 1843(k)(4)(I)); or
(v) any other activity designated by the Board;
(2) a portfolio company
(as defined in the merchant banking subpart of Regulation Y (12 CFR
225.177(c))) controlled by the foreign bank or an affiliate of the
foreign bank or a company that would be an affiliate of the branch,
agency, or commercial lending company of the foreign bank under paragraph
(a)(9) of section 223.2 if such branch, agency, or commercial lending
company were a member bank; or
(3) a subsidiary of an affiliate described
in paragraph (b)(1) or (2) of this section.
(c) Capital stock and surplus. For purposes of this subpart, the “capital stock and surplus” of
a U.S. branch, agency, or commercial lending company of a foreign
bank will be determined by reference to the capital of the foreign
bank as calculated under its home-country capital standards.
