Wednesday, May 30, 2012

Fed Adopts Final Rule for Registration of Securities Holding Companies


The Federal Reserve Board has adopted a final rule to implement the registration requirements for securities holding companies under Dodd-Frank Act Section 618. This provision allows a securities holding company that is required by a foreign regulator or foreign law to be subject to comprehensive consolidated supervision to register with the Fed as a supervised securities holding company. The economic analysis accompanying the rule indicates that five entities may avail themselves of the rule.

The new rule defines “securities holding company” to mean any company that owns or controls, is controlled by, or is under common control with, one or more brokers or dealers registered with the Securities and Exchange Commission and is required by a foreign regulator or provision of foreign law to be subject to comprehensive consolidated supervision. The term excludes certain nonbank financial companies, insured banks or savings associations and their affiliates, foreign banks, and companies currently subject to comprehensive consolidated supervision by a foreign regulator. Supervised securities holding companies must comply with the Bank Holding Company Act of 1956, except for the provisions contained in Section 4 dealing with restrictions on nonbanking activities.

Securities holding companies that elect to register with the Fed will need to complete a new form being developed by the Fed. A securities holding company must file the form with the responsible reserve bank, as determined by the Director of Banking Supervision and Regulation at the Fed. The Fed may request additional necessary information. A registration is deemed filed on the date that all required information on the form is received. A registration generally is effective 45 calendar days after the date on which the responsible reserve bank received the complete filing. The Fed, however, may give written notice to a securities holding company that its registration is effective before 45 calendar days.

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