(a) In general. A company is “predominantly engaged in financial activities” for
purposes of this section if—
(1) The consolidated annual gross financial revenues of the company
in either of its two most recently completed fiscal years represent
85 percent or more of the company’s consolidated annual gross revenues
(as determined in accordance with applicable accounting standards)
in that fiscal year;
(2) The consolidated
total financial assets of the company as of the end of either of its
two most recently completed fiscal years represent 85 percent or more
of the company’s consolidated total assets (as determined in accordance
with applicable accounting standards) as of the end of that fiscal
year; or
(3) The Council, with respect
to the definition of a nonbank financial company for purposes of Title
I of the Dodd-Frank Act (other than with respect to the definition
of a significant nonbank financial company), or the Board, with respect
to the definition of a significant nonbank financial company, determines,
based on all the facts and circumstances, that—
(i) The consolidated annual gross financial
revenues of the company represent 85 percent or more of the company’s
consolidated annual gross revenues; or
(ii) The consolidated total financial
assets of the company represent 85 percent or more of the company’s
consolidated total assets.
(b) Consolidated annual gross financial revenues. For purposes of this section, the “consolidated annual gross financial
revenues” of a company means that portion of the consolidated annual
gross revenues of the company (as determined in accordance with applicable
accounting standards) that are derived, directly or indirectly, by
the company or any of its subsidiaries from—
(1) Activities that are financial in nature;
or
(2) The ownership, control, or
activities of an insured depository institution or any subsidiary
of an insured depository institution.
(c) Consolidated total financial assets. For
purposes of this section, the “consolidated total financial assets”
of a company means that portion of the consolidated total assets of
the company (as determined in accordance with applicable accounting
standards) that are related to—
(1) Activities that are financial in nature;
or
(2) The ownership, control, or
activities of an insured depository institution or any subsidiary
of an insured depository institution.
(d) Activities that are financial in nature.
(1) In general. For purposes of determining
whether a company is predominantly engaged in financial activities
under this section, activities that are financial in nature are set
forth in the appendix to this part. Nothing in this part limits the
authority of the Board under any other provision of law or regulation
to modify the activities determined to be financial in nature for
purposes of this section or for purposes of the BHC Act or to provide
interpretations of section 4(k) of the BHC Act.
(2) Effect of
other authority. Any activity described in the appendix is financial
in nature for purposes of this part regardless of whether—
(i) A bank holding company (including
a financial holding company or a company that is, or is treated in
the United States as, a bank holding company) may be authorized to
engage in the activity, or own or control shares of a company engaged
in such activity, under any other provisions of the BHC Act or other
Federal law including, but not limited to, section 4(a)(2), section
4(c)(5), section 4(c)(6), section 4(c)(7), section 4(c)(9), or section
4(c)(13) of the BHC Act (12 U.S.C. 1843(a)(2), (c)(5), (c)(6), (c)(7),
(c)(9), or (c)(13)) and the Board’s implementing regulations; or
(ii) Other provisions of Federal
or state law or regulations prohibit, restrict, or otherwise place
conditions on the conduct of the activity by a bank holding company
(including a financial holding company or a company that is, or is
treated in the United States, as a bank holding company) or bank holding
companies generally.
(e) Rules of construction. For purposes of
determining whether a company is predominantly engaged in financial
activities under this section—
(1) Unconsolidated
investments.
(i) Unless otherwise determined by the Council or the Board in accordance
with paragraph (e)(1)(ii) of this section, revenues derived from,
and assets related to, an investment by the company in an entity whose
financial statements are not consolidated with those of the company
are presumed to be financial in nature.
(ii) A company may seek to rebut the
presumption described in paragraph (e)(1)(i) of this section by providing
evidence to the Council, with respect to the definition of a nonbank
financial company for purposes of Title I of the Dodd-Frank Act (other
than with respect to the definition of a significant nonbank financial
company), or the Board, with respect to the definition of a significant
nonbank financial company, that the shares or ownership interests
are not held in connection with a bona fide merchant or investment
banking activity, are not held in connection with the activity of
investing for others, do not represent an investment in an entity
engaged in activities that are financial in nature as defined in the
appendix, or are not otherwise related to a financial activity.
(2) Accounts receivable.
(i) Unless otherwise determined by the
Council or the Board in accordance with paragraph (e)(2)(ii) of this
section, an account receivable is presumed to be an asset related
to the financial activity of extending credit.
(ii) A company may seek to rebut the
presumption described in paragraph (e)(2)(i) of this section by providing
evidence to the Council, with respect to the definition of a nonbank
financial company for purposes of Title I of the Dodd-Frank Act (other
than with respect to the definition of a significant nonbank financial
company), or the Board, with respect to the definition of a significant
nonbank financial company, that the account receivable is not related
to a financial activity.
(3) Goodwill. Goodwill is excluded
from a company’s consolidated total assets and consolidated total
financial assets.
(4) Cash and cash equivalents.
(i) Cash is excluded from a company’s
consolidated total assets and consolidated total financial assets.
(ii) Cash equivalents are assets
related to a financial activity.
(5) Intangible
assets. Intangible assets are treated in the same manner as the
transaction or asset that gives rise to the intangible asset.
