[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: 12CFR211.34]

[Page 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. 211.34  Procedures for filing and processing notices.

    (a) General policy. Direct and indirect investments by eligible 
investors in export trading companies shall be made in accordance with 
the general consent or prior notice procedures contained in this 
section. The Board may at any time, upon notice, modify or suspend the 
general-consent procedures with respect to any eligible investor.
    (b) General consent--(1) Eligibility for general consent. Subject to 
the other limitations of this subpart, the Board grants its general 
consent for any investment an export trading company:
    (i) If the eligible investor is well capitalized and well managed;
    (ii) In an amount equal to cash dividends received from that export 
trading company during the preceding 12 calendar months; or
    (iii) That is acquired from an affiliate at net asset value or 
through a contribution of shares.
    (2) Post-investment notice. By the end of the month following the 
month in which the investment is made, the investor shall provide the 
Board with the following information:
    (i) The amount of the investment and the source of the funds with 
which the investment was made; and
    (ii) In the case of an initial investment, a description of the 
activities in which the export trading company proposes to engage and 
projections for the export trading company for the first year following 
the investment.
    (c) Filing notice--(1) Prior notice. An eligible investor shall give 
the Board 60 days' prior written notice of any investment in an export 
trading company that does not qualify under the general consent 
procedure.
    (2) Notice of change of activities. (i) An eligible investor shall 
give the Board 60 days' prior written notice of changes in the 
activities of an export trading company that is a subsidiary of the 
investor if the export trading company expands its activities beyond 
those described in the initial notice to include:
    (A) Taking title to goods where the export trading company does not 
have a firm order for the sale of those goods;
    (B) Product research and design;
    (C) Product modification; or
    (D) Activities not specifically covered by the list of activities 
contained in section 4(c)(14)(F)(ii) of the BHC Act (12 U.S.C. 
1843(c)(14)(F)(ii)).
    (ii) Such an expansion of activities shall be regarded as a proposed 
investment under this subpart.
    (d) Time period for Board action. (1) A proposed investment that has 
not been disapproved by the Board may be made 60 days after the 
appropriate Federal Reserve Bank accepts the notice for processing. A 
proposed investment may be made before the expiration of the 60-day 
period if the Board notifies the investor in writing of its intention 
not to disapprove the investment.
    (2) The Board may extend the 60-day period for an additional 30 days 
if the Board determines that the investor has not furnished all 
necessary information or that any material information furnished is 
substantially inaccurate. The Board may disapprove an investment if the 
necessary information is provided within a time insufficient to allow 
the Board reasonably to consider the information received.
    (3) Within three days of a decision to disapprove an investment, the 
Board shall notify the investor in writing and state the reasons for the 
disapproval.
    (e) Time period for investment. An investment in an export trading 
company that has not been disapproved shall be made within one year from 
the date of the notice not to disapprove, unless the time period is 
extended by the Board or by the appropriate Federal Reserve Bank.