Full text of District Notices (Federal Reserve Bank of Dallas) : Amendment to Regulation Y, Activities of Subsidiaries Under §4(c)(5), Circular No. 71-118

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Federal Reserve b a n k of Dallas

DALLAS, TEXAS

75222

,

Circular No. 71-118
May 19 1971

AMENDMENT TO REGULATION Y
Activities of subsidiaries under §L(c)(5)

To All Member Banks and Others Concerned
in the Eleventh Federal Reserve District:
The Board of Governors of the Federal Reserve System on
May lk, 1971* announced an amendment to Regulation Y (Bank Holding
Companies) specifying the kinds of activities in which subsidiaries
of bank holding companies may engage on the basis of §Mc)(5)
the
Bank Holding Company Act. The amendment is effective July 1, 1971.
Quoted below is the pertinent portion of the Board’s press release:
nUnder the amendment, bank holding companies may ac­
quire shares that are explicitly eligible for investment
by a national bank under Federal statute law, such as
shares of a small business investment company. Banks in
a holding company are not so restricted. National banks
in a holding company may acquire shares in accordance with
the rules of the Comptroller of the Currency. So far as
Federal law is concerned, state-chartered banks in a hold­
ing company may acquire shares in accordance with the rules
of the Board."
A copy of the amendment is enclosed. It should be filed in
the binder of Federal Reserve Regulations furnished to all member banks.
A current version of Regulation Y consists of the pamphlet, as amended,
effective March 15, 1968, an amendment effective March l8, 1971, and
the current amendment.
Yours very truly,
P. E. Coldwell
President
Enclosure

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

BANK HOLDING COMPANIES

A M E N D M E N T TO REGULATION Y

Effective July 1, 1971, section 222.4 of Regulation Y isamended
by adding a new paragraph as follows:
SECTION 222.4— INTERESTS IN NONBANKING ORGANIZATIONS
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(e) Activities of companies in which national banks may invest.— No bank
holding company or subsidiary thereof that is not a bank or subsdiary of a
bank may, after June 30, 1971, acquire shares on the basis of § 4(c)(5) of
the Act unless such shares are of the kinds and amounts explicitly eligible
by Federal statute for investment by a national bank. A national bank or a
subsidiary thereof may acquire or retain shares on the basis of § 4(c)(5) in
accordance with the rules and regulations of the Comptroller of the Currency.
So far as Federal law is concerned, a State-chartered bank or a subsidiary
thereof may (1) acquire or retain shares on the basis of § 4(c)(5) ifsuch shares
are of the kinds and amounts explicitly eligible by Federal statute for invest­
ment by a national bank and (2) acquire or retain all (but, except for direc­
tors’ qualifying shares, not less than all) of the shares of a company that
engages solely in activities in which the parent bank may engage, at locations
at which the bank may engage in the activity, and subject to the same limita­
tions as ifthe bank were engaged in the activity directly.

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