[Code of Federal Regulations]
[Title 12, Volume 2]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR211.33]

[Page 383-384]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 211--INTERNATIONAL BANKING OPERATIONS (REGULATION K)--Table of Contents
 
                   Subpart C--Export Trading Companies
 
Sec. 211.33  Investments and extensions of credit.

    (a) Amount of investments. In accordance with the procedures of 
Sec. 211.34, an eligible investor may invest no more than 5 percent of 
its consolidated capital and surplus in one or more export trading 
companies, except that an Edge or agreement corporation not engaged in 
banking may invest as much as 25 percent of its consolidated capital and 
surplus but no more than 5 percent of the consolidated capital and 
surplus of its parent bank holding company.
    (b) Extensions of credit--(1) Amount. An eligible investor in an 
export trading company or companies may extend credit directly or 
indirectly to the export trading company or companies in a total amount 
that at no time exceeds 10 percent of the investor's consolidated 
capital and surplus.
    (2) Terms. (i) An eligible investor in an export trading company may 
not extend credit directly or indirectly to the export trading company 
or any of its customers or to any other investor holding 10 percent or 
more of the shares of the export trading company on terms more favorable 
than those afforded similar borrowers in similar circumstances, and such 
extensions of credit shall not involve more than the normal risk of 
repayment or present other unfavorable features.
    (ii) For the purposes of this section, an investor in an export 
trading company includes any affiliate of the investor.
    (3) Collateral requirements. Covered transactions between a bank and 
an affiliated export trading company in which a bank holding company has 
invested pursuant to this subpart are subject to the collateral 
requirements of section 23A of the Federal Reserve Act (12 U.S.C. 371c), 
except where a bank issues a letter of credit or advances funds to an 
affiliated export trading company solely to finance the purchase of 
goods for which:
    (i) The export trading company has a bona fide contract for the 
subsequent sale of the goods; and

[[Page 384]]

    (ii) The bank has a security interest in the goods or in the 
proceeds from their sale at least equal in value to the letter of credit 
or the advance.