[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: 12CFR225.89]

[Page 116]
 
                       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. 225.89  How to request approval to engage in an activity that is complementary to a financial activity?

    (a) Prior Board approval is required. A financial holding company 
that seeks to engage in or acquire a company engaged in an activity that 
the financial holding company believes is complementary to a financial 
activity must obtain prior approval from the Board in accordance with 
section 4(j) of the Bank Holding Company Act (12 U.S.C. 1843 (j)). The 
notice must be in writing and must:
    (1) Identify and define the proposed complementary activity, 
specifically describing what the activity would involve and how the 
activity would be conducted;
    (2) Identify the financial activity for which the proposed activity 
would be complementary and provide information sufficient to support a 
finding that the proposed activity should be considered complementary to 
the identified financial activity;
    (3) Describe the scope and relative size of the proposed activity, 
as measured by the percentage of the projected financial holding company 
revenues expected to be derived from and assets associated with 
conducting the activity;
    (4) Discuss the risks that conducting the activity may reasonably be 
expected to pose to the safety and soundness of the subsidiary 
depository institutions of the financial holding company and to the 
financial system generally;
    (5) Describe the potential adverse effects, including potential 
conflicts of interest, decreased or unfair competition, or other risks, 
that conducting the activity could raise, and explain the measures the 
financial holding company proposes to take to address those potential 
effects; and
    (6) Provide any information about the financial and managerial 
resources of the financial holding company and any other information 
requested by the Board.
    (b) What standards will the Board apply in evaluating the notice? In 
evaluating a notice to engage in a complementary activity, the Board 
must consider whether:
    (1) The proposed activity is complementary to a financial activity;
    (2) The proposed activity would pose a substantial risk to the 
safety or soundness of depository institutions or the financial system 
generally; and
    (3) The proposal meets the standards in section 4(j)(2) of the Bank 
Holding Company Act (12 U.S.C. 1843(j)(2)).
    (c) How and when will the Board act on a notice? The Board will 
inform the financial holding company in writing of the Board's 
determination regarding the proposed activity within the period 
described in section 4(j) of the Bank Holding Company Act (12 U.S.C. 
1843(j)).

[Reg. Y, 65 FR 14440, Mar. 17, 2000]