(a) Definitions. For purposes of this part, the following definitions
apply:
(1) International banking
facility or IBF means a set of asset and liability accounts segregated
on the books and records of a depository institution, United States
branch or agency of a foreign bank, or an Edge or agreement corporation
that includes only international banking facility time deposits and
international banking facility extensions of credit.
(2) International banking facility time
deposit or IBF time deposit means a deposit, placement,
borrowing or similar obligation represented by a promissory note,
acknowledgment of advance, or similar instrument that is not issued
in negotiable or bearer form, and
(i) (A) that
must remain on deposit at the IBF at least overnight; and
(B) that is issued to—
(1) any office located outside the
United States of another depository institution organized under the
laws of the United States or of an Edge or agreement corporation;
(2) any office located
outside the United States of a foreign bank;
(3) a United States office or a non-United
States office of the entity establishing the IBF;
(4) another IBF; or
(
5) a foreign national government,
or an agency or instrumentality thereof,
10 engaged principally in activities which are ordinarily performed
in the United States by governmental entities; an international entity
of which the United States is a member; or any other foreign international
or supranational entity specifically designated by the Board;
11 or
(ii) (A) that is payable—
(1) on a specified date not less than
two business days after the date of deposit;
(2) upon expiration of a specified
period of time not less than two business days after the date of deposit;
or
(3) upon written
notice that actually is required to be given by the depositor not
less than two business days prior to the date of withdrawal;
(B) that represents funds
deposited to the credit of a non-United States resident or a foreign
branch, office, subsidiary, affiliate, or other foreign establishment
(“foreign affiliate”) controlled by one or more domestic corporations
provided that such funds are used only to support the operations outside
the United States of the depositor or of its affiliates located outside
the United States; and
(C) that is maintained under an agreement or arrangement under which
no deposit or withdrawal of less than $100,000 is permitted, except
that a withdrawal of less than $100,000 is permitted if such withdrawal
closes an account.
2-206.11
(3) International banking facility extension
of credit or IBF loan means any transaction where an IBF
supplies funds by making a loan, or placing funds in a deposit account.
Such transactions may be represented by a promissory note, security,
acknowledgment of advance, due bill, repurchase agreement, or any
other form of credit transaction. Such credit may be extended only
to—
(i) any office located outside the United
States of another depository institution organized under the laws
of the United States or of an Edge or agreement corporation;
(ii) any office located
outside the United States of a foreign bank;
(iii) a United States or a non-United
States office of the institution establishing the IBF;
(iv) another IBF;
(v) a foreign national
government, or an agency or instrumentality thereof,
12 engaged principally in activities
which are
ordinarily performed in the United States by governmental entities;
an international entity of which the United States is a member; or
any other foreign international or supranational entity specifically
designated by the Board,
13 or
(vi) a non-United States resident or
a foreign branch, office, subsidiary, affiliate or other foreign establishment
(“foreign affiliate”) controlled by one or more domestic corporations
provided that the funds are used only to finance the operations outside
the United States of the borrower or of its affiliates located outside
the United States.
2-206.12
(b) Acknowledgment of use of IBF deposits and extensions
of credit. An IBF shall provide written notice to each of its
customers (other than those specified in section 204.8(a)(2) (i)(B)
and section 204.8(a)(3)(i) through (v)) at the time a deposit relationship
or a credit relationship is first established that it is the policy
of the Board of Governors of the Federal Reserve System that deposits
received by international banking facilities may be used only to support
the depositor’s operations outside the United States as specified
in section 204.8(a)(2)(ii)(B) and that extensions of credit by IBFs
may be used only to finance operations outside of the United States
as specified in section 204.8(a)(3)(vi). In the case of loans to or
deposits from foreign affiliates of U.S. residents, receipt of such
notice must be acknowledged in writing whenever a deposit or credit
relationship is first established with the IBF.
(c) Exemption from reserve requirements. An institution that is subject to the reserve requirements of this
part is not required to maintain reserves against its IBF time deposits
or IBF loans. Deposit-taking activities of IBFs are limited to accepting
only IBF time deposits and lending activities of IBFs are restricted
to making only IBF loans.
2-206.13
(d) Establishment of an international banking facility. A depository institution, an Edge or agreement corporation or a
United States branch or agency of a foreign bank may establish an
IBF in any location where it is legally authorized to engage in IBF
business. However, only one IBF may be established for each reporting
entity that is required to submit a Report of Transaction Accounts,
Other Deposits and Vault Cash (Form FR 2900).
(e) Notification to Federal Reserve. At least 14 days prior to the first reserve computation period that
an institution intends to establish an IBF it shall notify the Federal
Reserve Bank of the District in which it is located of its intent.
Such notification shall include a statement of intention by the institution
that it will comply with the rules of this part concerning IBFs, including
restrictions on sources and uses of funds, and recordkeeping and accounting
requirements. Failure to comply with the requirements of this part
shall subject the institution to reserve requirements under this part
or result in the revocation of the institution’s ability to operate
an IBF.
(f) Recordkeeping
requirements. A depository institution shall segregate on its
books and records the asset and liability accounts of its IBF and
submit reports concerning the operations of its IBF as required by
the Board.
