(a) For purposes of this part and except
as provided in paragraphs (b) and (c) of this section, affiliate with respect to a member bank means:
(1) Parent companies. Any company that controls the member bank;
(2) Companies
under common control by a parent company. Any company, including
any subsidiary of the member bank, that is controlled by a company
that controls the member bank;
(3) Companies under other common control. Any
company, including any subsidiary of the member bank, that is controlled,
directly or indirectly, by trust or otherwise, by or for the benefit
of shareholders who beneficially or otherwise control, directly or
indirectly, by trust or otherwise, the member bank or any company
that controls the member bank;
(4) Companies with interlocking directorates. Any company in which a majority of its directors, trustees, or general
partners (or individuals exercising similar functions) constitute
a majority of the persons holding any such office with the member
bank or any company that controls the member bank;
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(5) Sponsored
and advised companies. Any company, including a real estate investment
trust, that is sponsored and advised on a contractual basis by the
member bank or an affiliate of the member bank;
(6) Investment
companies.
(i) Any investment company for which the member bank or any affiliate
of the member bank serves as an investment adviser, as defined in section
2(a)(20) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(20));
and
(ii) Any other investment
fund for which the member bank or any affiliate of the member bank
serves as an investment advisor, if the member bank and its affiliates
own or control in the aggregate more than 5 percent of any class of
voting securities or of the equity capital of the fund;
(7) Depository
institution subsidiaries. A depository institution that is a
subsidiary of the member bank;
(8) Financial subsidiaries. A financial subsidiary
of the member bank;
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(9) Companies held under merchant banking or insurance
company investment authority.
(i) In general. Any company in which a holding company of the member bank owns or
controls, directly or indirectly, or acting through one or more other
persons, 15 percent or more of the equity capital pursuant to section
4(k)(4)(H) or (I) of the Bank Holding Company Act (12 U.S.C. 1843(k)(4)(H)
or (I)).
(ii) General exemption. A company will not be
an affiliate under paragraph (a)(9)(i) of this section if the holding
company presents information to the Board that demonstrates, to the
Board’s satisfaction, that the holding company does not control the
company.
(iii) Specific exemptions. A company also will
not be an affiliate under paragraph (a)(9)(i) of this section if—
(A) no director, officer,
or employee of the holding company serves as a director, trustee,
or general partner (or individual exercising similar functions) of
the company;
(B) a person that is not
affiliated or associated with the holding company owns or controls
a greater percentage of the equity capital of the company than is
owned or controlled by the holding company, and no more than one officer
or employee of the holding company serves as a director or trustee
(or individual exercising similar functions) of the company; or
(C) a person that is not affiliated or
associated with the holding company owns or controls more than 50
percent of the voting shares of the company, and officers and employees
of the holding company do not constitute a majority of the directors
or trustees (or individuals exercising similar functions) of the company.
(iv) Application of rule to private equity funds. A holding company will not be deemed to own or control the equity
capital of a company for purposes of paragraph (a)(9)(i) of this section
solely by virtue of an investment made by the holding company in a
private equity fund (as defined in the merchant banking subpart of
the Board’s Regulation Y (12 CFR 225.173(a))) that owns or controls
the equity capital of the company unless the holding company controls
the private equity fund under 12 CFR 225.173(d)(4).
(v) Definition. For purposes of this paragraph (a)(9), holding company with
respect to a member bank means a company that controls the member
bank, or a company that is controlled by shareholders that control
the member bank, and all subsidiaries of the company (including any
depository institution that is a subsidiary of the company).
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(10) Partnerships
associated with the member bank or an affiliate. Any partnership
for which the member bank or any affiliate of the member bank serves
as a general partner or for which the member bank or any affiliate
of the member bank causes any director, officer, or employee of the
member bank or affiliate to serve as a general partner;
(11) Subsidiaries
of affiliates. Any subsidiary of a company described in paragraphs
(a)(1) through (10) of this section; and
(12) Other companies. Any company that the Board determines by regulation or order, or that the
appropriate federal banking agency for the member bank determines
by order, to have a relationship with the member bank, or any affiliate
of the member bank, such that covered transactions by the member bank
with that company may be affected by the relationship to the detriment
of the member bank.
(1) Subsidiaries. Any company that is a subsidiary of the member bank, unless the
company is—
(i) a
depository institution;
(ii)
a financial subsidiary;
(iii)
directly controlled by—
(A) one or more affiliates (other than depository institution affiliates)
of the member bank; or
(B) a shareholder
that controls the member bank or a group of shareholders that together
control the member bank;
(iv) an employee stock option plan,
trust, or similar organization that exists for the benefit of the
shareholders, partners, members, or employees of the member bank or
any of its affiliates; or
(v)
any other company determined to be an affiliate under paragraph (a)(12)
of this section;
(2) Bank premises. Any company engaged solely
in holding the premises of the member bank;
(3) Safe deposit. Any company engaged solely in conducting a safe deposit business;
(4) Government
securities. Any company engaged solely in holding obligations
of the United States or its agencies or obligations fully guaranteed
by the United States or its agencies as to principal and interest;
and
(5) Companies held DPC. Any company where control results from the
exercise of rights arising out of a bona fide debt previously contracted.
This exclusion from the definition of affiliate applies only for the
period of time specifically authorized under applicable state or federal
law or regulation or, in the absence of such law or regulation, for
a period of two years from the date of the exercise of such rights.
The Board may authorize, upon application and for good cause shown,
extensions of time for not more than one year at a time, but such
extensions in the aggregate will not exceed three years.
