(a)
Authority. This part
1 (Regulation
Y) is issued by the Board of Governors of the Federal Reserve System
(Board) under section 5(b) of the Bank Holding Company Act of 1956,
as amended (12 U.S.C. 1844(b)) (BHC Act); sections 8 and 13(a) of
the International Banking Act of 1978 (12 U.S.C. 3106 and 3108); section
7(j)(13) of the Federal Deposit Insurance Act, as amended by the Change
in Bank Control Act of 1978 (12 U.S.C. 1817(j)(13)) (Bank Control
Act); section 8(b) of the Federal Deposit Insurance Act (12 U.S.C.
1818(b)); section 914 of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989 (12 U.S.C. 1831i); section 106 of the
Bank Holding Company Act Amendments of 1970 (12 U.S.C. 1972); and
the International Lending Supervision Act of 1983 (Pub. L. 98-181,
title IX). The BHC Act is codified at 12 U.S.C. 1841
et seq.(b) Purpose. The
principal purposes of this part are to—
(1) regulate the acquisition of control
of banks by companies and individuals;
(2) define and regulate the nonbanking
activities in which bank holding companies and foreign banking organizations
with United States operations may engage; and
(3) set forth the procedures for securing
approval for such transactions and activities.
4-002
(c) Scope.
(1) Subpart A contains general provisions
and definitions of terms used in this regulation.
(2) Subpart B governs acquisitions of bank
or bank holding company securities and assets by bank holding companies
or by any company that will become a bank holding company as a result
of the acquisition.
(3) Subpart C defines and regulates the nonbanking activities in
which bank holding companies and foreign banking organizations may
engage directly or through a subsidiary. The Board’s Regulation K
governs, certain nonbanking activities conducted by foreign banking
organizations and certain foreign activities conducted by bank holding
companies (12 CFR 211, International Banking Operations).
(4) Subpart D specifies situations
in which a company is presumed to control voting securities or to have the power
to exercise a controlling influence over the management or policies
of a bank or other company, sets forth the procedures for making a
control determination, and provides rules governing the effectiveness
of divestitures by bank holding companies.
(5) Subpart E governs changes
in bank control resulting from the acquisition by individuals or companies
(other than bank holding companies) of voting securities of a bank
holding company or state member bank of the Federal Reserve System.
(6) Subpart F specifies
the limitations that govern companies that control so-called nonbank
banks and the activities of nonbank banks.
(7) Subpart G prescribes minimum standards
that apply to the performance of real estate appraisals and identifies
transactions that require state-certified appraisers.
(8) Subpart H identifies the circumstances
when written notice must be provided to the Board prior to the appointment
of a director or senior officer of a bank holding company and establishes
procedures for obtaining the required Board approval.
(9) Subpart I establishes
the procedure by which a bank holding company may elect to become
a financial holding company, enumerates the consequences if a financial
holding company ceases to meet a requirement applicable to a financial
holding company, lists the activities in which a financial holding
company may engage, establishes the procedure by which a person may
request the Board to authorize additional activities as financial
in nature or incidental thereto, and establishes the procedure by
which a financial holding company may seek approval to engage in an
activity that is complementary to a financial activity.
(10) Subpart J governs the
conduct of merchant banking investment activities by financial holding
companies as permitted under section 4(k)(4)(H) of the Bank Holding
Company Act (12 U.S.C. 1843(k)(4)(H)).
(11) Subpart K governs the period of time
that firms subject to section 13 of the Bank Holding Company Act (12
U.S.C. 1851) have to bring their activities, investments, and relationships
into compliance with the requirements of such section.
(12) [Reserved]
(13) Appendix C contains the
Board’s policy statement governing small bank holding companies.
(14) [Reserved]
(15) [Reserved]
