(a) Transition
limit on aggregate credit exposure for certain covered foreign entities.
(1) A U.S. intermediate
holding company that is a covered foreign entity and that has less
than $250 billion in total consolidated assets as of December 31,
2019 is not required to comply with paragraph (b)(1) of this section
until January 1, 2021.
(2) Until
January 1, 2021, no U.S. intermediate holding company that is a covered
foreign entity and that has less than $250 billion in total consolidated
assets as of December 31, 2019 may have an aggregate net credit exposure
that exceeds 25 percent of the consolidated capital stock and surplus
of the U.S. intermediate holding company.
(b) Limit on aggregate net credit exposure
for covered foreign entities.
(1) Except as provided in paragraph (a)
of this section, no U.S. intermediate holding company that is a covered
foreign entity may have an aggregate net credit exposure to any counterparty
that exceeds 25 percent of the tier 1 capital of the U.S. intermediate
holding company.
(2) No foreign
banking organization that is a covered foreign entity may permit its
combined U.S. operations to have aggregate net credit exposure to
any counterparty that exceeds 25 percent of the tier 1 capital of
the foreign banking organization.
(c) Limit on aggregate net credit exposure of major
foreign banking organizations to major counterparties.
(1) [Reserved]
(2) No major foreign banking organization
may permit its combined U.S. operations to have aggregate net credit
exposure to any major counterparty that exceeds 15 percent of the
tier 1 capital of the major foreign banking organization.
(3) For purposes of this subpart, a top-tier
foreign banking organization will be a major counterparty if it meets
one of the following conditions:
(i) The top-tier foreign banking organization
determines, pursuant to 12 CFR 252.153(b)(6), that the top-tier foreign
banking organization has the characteristics of a global systemically
important banking organization under the global methodology; or
(ii) The Board, using information
available to the Board, determines:
(A) That the top-tier foreign banking organization
would be a global systemically important banking organization under
the global methodology;
(B) That the
top-tier foreign banking organization, if it were subject to the Board’s
Regulation Q, would be identified as a global systemically important
BHC under 12 CFR 217.402 of the Board’s Regulation Q; or
(C) That the U.S. intermediate holding company,
if it were subject to 12 CFR 217.402 of the Board’s Regulation Q,
would be identified as a global systemically important BHC.
(4) Each top-tier foreign
banking organization that controls a U.S. intermediate holding company
must submit to the Board by January 1 of each calendar year through
the U.S. intermediate holding company:
(A) Notice of whether the home country supervisor
(or other appropriate home country regulatory authority) of the top-tier
foreign banking organization of the U.S. intermediate holding company
has adopted standards consistent with the global methodology; and
(B) Notice of whether the top-tier foreign
banking organization prepares or reports the indicators used by the
global methodology to identify a banking organization as a global
systemically important banking organization and, if it does, whether
the top-tier foreign banking organization has determined that it has
the characteristics of a global systemically important banking organization
under the global methodology pursuant to 12 CFR 252.153(b)(6).
(5) A top-tier foreign
banking organization that controls a U.S. intermediate holding company
and prepares or reports for any purpose the indicator amounts necessary
to determine whether the top-tier foreign banking organization is
a global systemically important banking organization under the global
methodology must use the data to determine whether the top-tier foreign
banking organization has the characteristics of a global systemically
important banking organization under the global methodology.
(d) Foreign banking organizations subject
on a consolidated basis to a large exposures or single-counterparty
credit limit regime by its home-country supervisor.
(1) Notwithstanding paragraphs (a)
through (c) of this section, a foreign banking organization that is
a covered foreign entity is not required to comply with the requirements
of this subpart with respect to limits on the aggregate net credit
exposure of its combined U.S. operations if the foreign banking organization
certifies to the Board that it meets large exposure standards on a
consolidated basis established by its home-country supervisor that
are consistent with the large exposures framework published by the
Basel Committee on Banking Supervision (Basel Large Exposures Framework),
unless the Board determines in writing, after notice to the foreign
banking organization, that compliance with this subpart is required.
(i) For purposes of
this paragraph, home-country large exposure standards that are consistent
with the Basel Large Exposures Framework include single-counterparty
credit limits and any restrictions set forth in “Supervisory framework
for measuring and controlling large exposures” (2014) (Basel LE Standard),
as implemented in accordance with the Basel LE Standard.
(ii) [Reserved]
(2) A foreign banking organization that
is a covered foreign entity must provide to the Board reports relating
to its compliance with the large exposure standards described in paragraph
(d)(1) of this section concurrently with filing the FR Y-7Q or any
successor report.
