(a) General policy. Direct and indirect investments by eligible investors in export
trading companies shall be made in accordance with the general-consent
or prior-notice procedures contained in this section. The Board may
at any time, upon notice, modify or suspend the general-consent procedures
with respect to any eligible investor.
(b) General consent.
(1) Eligibility
for general consent. Subject to the other limitations of this
subpart, the Board grants its general consent for any investment in
an export trading company—
(i) if the eligible investor is well
capitalized and well managed;
(ii) in an amount equal to cash dividends received from that export
trading company during the preceding 12 calendar months; or
(iii) that is acquired from an affiliate
at net asset value or through a contribution of shares.
(2) Post-investment
notice. By the end of the month following the month in which
the investment is made, the investor shall provide the Board with
the following information:
(i) the amount of the investment and
the source of the funds with which the investment was made; and
(ii) in the case of an initial
investment, a description of the activities in which the export trading
company proposes to engage and projections for the export trading
company for the first year following the investment.
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(c) Filing notice.
(1) Prior
notice. An eligible investor shall give the Board 60 days’ prior
written notice of any investment in an export trading company that
does not qualify under the general-consent procedure.
(2) Notice of
change of activities.
(i) An eligible investor shall give
the Board 60 days’ prior written notice of changes in the activities
of an export trading company that is a subsidiary of the investor
if the export trading company expands its activities beyond those
described in the initial notice to include—
(A) taking title to goods where the export
trading company does not have a firm order for the sale of those goods;
(B) product research and design;
(C) product modification; or
(D) activities not specifically covered by
the list of activities contained in section 4(c)(14)(F)(ii) of the
BHC Act (12 U.S.C. 1843(c)(14)(F)(ii)).
(ii) Such an expansion of activities
shall be regarded as a proposed investment under this subpart.
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(d) Time period for Board
action.
(1) A proposed
investment that has not been disapproved by the Board may be made
60 days after the appropriate Federal Reserve Bank accepts the notice
for processing. A proposed investment may be made before the expiration
of the 60-day period if the Board notifies the investor in writing
of its intention not to disapprove the investment.
(2) The Board may extend the 60-day period
for an additional 30 days if the Board determines that the investor
has not furnished all necessary information or that any material information
furnished is substantially inaccurate. The Board may disapprove an
investment if the necessary information is provided within a time
insufficient to allow the Board reasonably to consider the information
received.
(3) Within three days
of a decision to disapprove an investment, the Board shall notify
the investor in writing and state the reasons for the disapproval.
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(e) Time period for investment. An investment in an export trading company that has not been disapproved
shall be made within one year from the date of the notice not to disapprove,
unless the time period is extended by the Board or by the appropriate
Federal Reserve Bank.
