(a) Prior Board
approval is required. A financial holding company that seeks
to engage in or acquire more than 5 percent of the outstanding shares
of any class of voting securities of a company engaged in an activity
that the financial holding company believes is complementary to a
financial activity must obtain prior approval from the Board in accordance
with section 4(j) of the BHC Act (12 U.S.C. 1843(j)). The notice must
be in writing and must—
(1) identify and define the proposed complementary activity, specifically
describing what the activity would involve and how the activity would
be conducted;
(2) identify the financial
activity for which the proposed activity would be complementary and
provide detailed information sufficient to support a finding that
the proposed activity should be considered complementary to the identified
financial activity;
(3) describe
the scope and relative size of the proposed activity, as measured by the
percentage of the projected financial holding company revenues expected
to be derived from and assets associated with conducting the activity;
(4) discuss the risks that conducting
the activity may reasonably be expected to pose to the safety and
soundness of the subsidiary depository institutions of the financial
holding company and to the financial system generally;
(5) describe the potential adverse effects,
including potential conflicts of interest, decreased or unfair competition,
or other risks, that conducting the activity could raise, and explain
the measures the financial holding company proposes to take to address
those potential effects;
(6) describe
the potential benefits to the public, such as greater convenience,
increased competition, or gains in efficiency, that the proposal reasonably
can be expected to produce; and
(7) provide any information about the financial and managerial resources
of the financial holding company and any other information requested
by the Board.
4-056.81
(b) Factors for consideration by the Board. In evaluating a notice
to engage in a complementary activity, the Board must consider whether—
(1) the proposed activity
is complementary to a financial activity;
(2) the proposed activity would pose a
substantial risk to the safety or soundness of depository institutions
or the financial system generally; and
(3) the proposal could be expected to produce benefits to the public
that outweigh possible adverse effects.
(c) Board action. The Board will inform the
financial holding company in writing of the Board’s determination
regarding the proposed activity within the period described in section
4(j) of the Bank Holding Company Act (12 U.S.C. 1843(j)).
