(a) Supervision.
(1) Foreign branches and subsidiaries. U.S.
banking organizations conducting international operations under this
subpart shall supervise and administer their foreign branches and
subsidiaries in such a manner as to ensure that their operations conform
to high standards of banking and financial prudence.
(i) Effective systems of records,
controls, and reports shall be maintained to keep management informed
of their activities and condition.
(ii) Such systems shall provide, in particular, information on risk
assets, exposure to market risk, liquidity management, operations,
internal controls, legal and operational risk, and conformance to
management policies.
(iii) Reports
on risk assets shall be sufficient to permit an appraisal of credit
quality and assessment of exposure to loss, and, for this purpose,
provide full information on the condition of material borrowers.
(iv) Reports on operations and
controls shall include internal and external audits of the branch
or subsidiary.
(2) Joint ventures. Investors shall maintain
sufficient information with respect to joint ventures to keep informed
of their activities and condition.
(i) Such information shall include audits
and other reports on financial performance, risk exposure, management
policies, operations, and controls.
(ii) Complete information shall be maintained on all transactions
with the joint venture by the investor and its affiliates.
(3) Availability
of reports and information to examiners. The reports specified
in paragraphs (a)(1) and (2) of this section and any other information
deemed necessary to determine compliance with U.S. banking law shall
be made available to examiners of the appropriate bank supervisory
agencies.
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(b) Examinations. Examiners appointed by the Board shall examine each Edge corporation
once a year. An Edge or agreement corporation shall make available
to examiners information sufficient to assess its condition and operations
and the condition and activities of any organization whose shares
it holds.
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(c) Reports.
(1) Reports of
condition. Each Edge or agreement corporation shall make reports
of condition to the Board at such times and in such form as the Board
may prescribe. The Board may require that statements of condition
or other reports be published or made available for public inspection.
(2) Foreign
operations. Edge and agreement corporations, member banks, and
bank holding companies shall file such reports on their foreign operations
as the Board may require.
(3) Acquisition
or disposition of shares. Member banks, Edge and agreement corporations,
and bank holding companies shall report, in a manner prescribed by
the Board, any acquisition or disposition of shares.
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(d) Filing and processing procedures.
(1) Place
of filing. Unless otherwise directed by the Board, applications,
notices, and reports required by this part shall be filed with the
Federal Reserve Bank of the District in which the parent bank or bank
holding company is located or, if none, the Reserve Bank of the District
in which the applying or reporting institution is located. Instructions
and forms for applications, notices, and reports are available from
the Reserve Banks.
(2) Timing. The Board shall act on an application
under this subpart within 60 calendar days after the Reserve Bank
has received the application, unless the Board notifies the investor
that the 60-day period is being extended and states the reasons for
the extension.
