[Code of Federal Regulations]
[Title 12, Volume 3, Parts 220 to 299]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR225.85]

[Page 112]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL (REGULATION Y)--Table of Contents
 
                 Subpart I--Financial Holding Companies
 
Sec. 225.85  Is notice to or approval from the Board required prior to engaging in a financial activity?

    (a) No prior approval required generally--(1) In general. A 
financial holding company and any subsidiary (other than a depository 
institution or subsidiary of a depository institution) of the financial 
holding company may engage in any activity listed in Sec. 225.86, or 
acquire control or shares of a company engaged exclusively in any 
activity listed in Sec. 225.86, without providing prior notice to or 
obtaining prior approval from the Board unless required under paragraph 
(c) of this section.
    (2) May a financial holding company acquire a company engaged in 
other permissible activities? In addition to the activities listed in 
Sec. 225.86, a company acquired or to be acquired by a financial holding 
company under paragraph (a)(1) of this section may engage in activities 
otherwise permissible for a financial holding company under this part in 
accordance with any applicable notice, approval, or other requirement.
    (3) May a financial holding company acquire a financial company 
engaged in limited nonfinancial activities? A financial holding company 
may control or acquire more than 5 percent of the voting shares of a 
company that is not engaged exclusively in activities that are financial 
in nature or incidental to a financial activity or otherwise permissible 
for a financial holding company if:
    (i) Substantially all of the activities conducted by the company are 
financial in nature, incidental to a financial activity, or otherwise 
permissible for the financial holding company;
    (ii) As part of the notice provided under Sec. 225.87, the financial 
holding company commits to the Board to terminate or divest all 
activities that are not financial in nature or incidental to a financial 
activity or otherwise permissible for the financial holding company and 
the financial holding company completes that termination or divestiture 
within 2 years of the date the financial holding company acquires the 
company; and
    (iii) Following the acquisition of the company by the financial 
holding company, the company does not engage in or acquire shares of any 
company engaged in any activity that is not permissible for the 
financial holding company.
    (b) In what locations may a financial holding company conduct 
financial activities? A financial holding company may conduct any 
activity listed in Sec. 225.86 at any location in the United States or 
at any location outside of the United States subject to the laws of the 
jurisdiction in which the activity is conducted.
    (c) Under what circumstances is prior notice to the Board required? 
(1) Acquisition of more than 5 percent of the shares of a savings 
association. A financial holding company must obtain Board approval in 
accordance with section 4(j) of the Bank Holding Company Act (12 U.S.C. 
1843(j)) and either Sec. 225.23 or Sec. 225.24, as appropriate, prior to 
acquiring control or more than 5 percent of the voting shares of a 
savings association.
    (2) Supervisory actions. The Board may, if appropriate in 
supervisory cases, including under Sec. 225.82(d) or Sec. 225.83(d) or 
other relevant authority, require a financial holding company to provide 
prior notice to or obtain prior approval from the Board to engage in any 
activity or acquire shares or control of any company.

[Reg. Y, 65 FR 14438, Mar. 17, 2000]