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.