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FEDERAL RESERVE BAN K OF DALLAS DALLAS, TEXAS 7 5 2 2 2 Circular N o. 69-10 January 14,1969 AMENDMENTS TO REGULATION K AND RULES REGARDING DELEGATION OF AUTHORITY To All Member Banks in the Eleventh Federal Reserve District: The Board of Governors of the Federal Reserve System has adopted, effective January 7, 1969, an amendment to its Regulation K, “Corpo rations Engaged in Foreign Banking and Financing Under the Federal Reserve Act.” The Board has also adopted an amendment to its Regu lation “Rules Regarding Delegation of Authority” to delegate to a Board member and the Board’s staff authority to approve certain international applications by Edge and Agreement corporations and member banks. Enclosed is a copy of an explanatory press release dated January 10, 1969, concerning the amendments. Copies of the amendments are enclosed for insertion in the ring binders containing the Regulations of the Board of Governors and the Bulletins of this Bank. Yours very truly, P. E. Coldwell President Enclosures (3) This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) R U L E S R E G A R D IN G D E L E G A T IO N O F A U T H O R IT Y A M EN D M EN T I s s u e d by t h e B oard o f G o v ern o r s o f t h e F ed er a l R eserv e S y s t e m 1. Effective J a n u a ry 7, 1969, the following new section is added a fte r Section 265.1: SEC TIO N 265.1a— S P E C IF IC FU N C T IO N S D E L E G A T E D TO BOARD M EM BERS. A ny Board m em ber designated by the C hairm an is authorized under sections 25 and 2 5 (a) of the F ederal Reserve A ct and P a r ts 211 and 213 of this chapter (R egulations K and M) : (1) To approve the establishm ent of a foreign b ranch or agency by a m em ber bank or corporation organized un d er sec tio n 25 (a) (an “ E dge” corporation) or o perating under an agree m ent w ith th e B oard p u rsu a n t to section 25 (an “ A greem ent” corporation) w hich has already established branches in more th a n one foreign country. (2) To g r a n t specific consent to stock acquisitions by a m em b er bank or an Edge o r A greem ent corporation (and to approve such acquisitions w hich m ay exceed th e lim itations in section 2 5 (a ) based on such a corporation’s capital and surplus) not resulting in the acquisition by such bank or corporation of effec tive control of any foreign company (o th e r th a n a com pany p e r form in g nominee, fiduciary or other banking services incidental to the activities of a foreign branch or affiliate of such bank or c o rp o ra tio n ). 1 (3) To p e rm it a n Edge or A greem ent corporation to exceed the lim itations in section 211.9 (b) and (c) of th is ch ap ter (Reg ulation K) , 2. Also effective J a n u a ry 7,1969, th e title s of section 265.2 and p a ra g ra p h (c) th ere o f are amended to read as shown below, and the following su b p a ra g rap h (11) is added to p a ra g ra p h (c) : 1 Subject, of course, to the limitations in section 25(a) relating to aggregate liabilities outstanding on debentures, bonds, and promissory notes. (O V ER ) SEC TIO N 265.2— S P E C IF IC FU N C T IO N S D E L E G A T E D TO BOARD EM PL O Y E E S AND F E D E R A L R E S E R V E BANKS * i\f * * * (c) The Director of the Division of Supervision and Regulation (or, in his absence, the A cting D irector) is authorized: (11) U nder sections 25 and 2 5 (a ) of the F ederal Reserve A ct and P a r ts 211 and 213 of th is chapter (R egulations K and M ), to approve increases and reductions in the capital stock and am endm ents to the articles of association of a corporation o rg an ized under section 25 (a) and additional investm ents by a m em ber bank in the stock of a corporation operating under a n agreem ent w ith the B oard p u rsu a n t to section 25. CORPORATIONS DOING FOREIGN BANKING OR OTHER FOREIGN FINANCING UNDER THE FEDERAL RESERVE ACT AMENDMENT TO REGULATION K ( 1 2 CFR P A R T 2 1 1 ) ISSUED BY T H E BOARD OF GOVERNORS OF T H E FED ERA L RESERVE SYSTEM Effective January 7, 1969, Section 211.8 is amended to read as follows: SECTION 211.8 — IN V ESTM EN TS IN SHARES OF O T H E R CORPORATIONS. (a) General consent. Subject to section 25(a) of the Act4 and this part, the Board hereby grants its general consent for any Corpora tion to invest, directly or indirectly, in the shares of foreign corporations5 not doing business in the United States; but no investment hereunder shall cause the Corporation to have invested more than $500,000 in the shares, or to hold more than 25 per cent of the voting shares, of any such corporation. (b) Specific consent. Prior specific consent of the Board is re quired with respect to the acquisition of any shares by a Corporation, except as provided in paragraph (a) of this section or the ninth para graph of section 25(a) of the Act (relating to purchases of stock to prevent loss on debts previously contracted). (c) Conditions. (1) Shares of stock in a corporation shall be disposed of as promptly as practicable if (i) such corporation should engage in the business of underwriting, selling, or distributing securi ties in the United States or (ii) the Corporation is advised by the Board that their holding is inappropriate under section 25(a) of the Act or this part. (2) In computing the amount which may be invested in the shares of any corporation under paragraph ( a) of this section and section 25(a) of the Act, there shall be included any such investments in other corporations controlled by such corporation. Unless otherwise 4 Including the limitations therein based on capital and surplus. 5 As used here, “corporation” does not include limited partnerships or similar organizations. (O V E R ) specified, “shares” in this section includes any rights to acquire shares, except that prior Board consent is not required for the acquisition and exercise of stock rights in lieu of dividends which are declared on shares already held by a Corporation and which do not result in an increase in percentage ownership of the corporation. (d) Reports. A Corporation shall inform the Board through the Federal Reserve Bank of its district within thirty days after the close of each quarter with respect to any acquisition or disposition of shares during that quarter, including the following information concerning any corporation whose shares it acquired for the first time (unless previously furnished) : (1) Recent balance sheet and income statement, (2) brief descriptions of the corporation’s business (including full information concerning any such business transacted in the United States), the shares acquired, and any related credit transaction, (3) lists of directors and principal officers (with address and principal business affiliation of each) and of all shareholders (known to the issuing corporation) holding 10 per cent or more of any class of the corporation’s shares (and the amount held by each), and (4) informa tion concerning the rights and privileges of the various classes of shares outstanding.
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