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federal R e s e r v e Ba n k DALLAS. TEXAS of Dallas 75222 C irc u la r No. 79-39 M arch 9, 1979 AMENDMENTS TO REGULATION Y AND RULES REGARDING DELEGATION OF A U TH O R ITY (Changes in Control of Bank Holding Companies and State Member Banks) T ran sm itted w ith C irc u la r No. 79-30 TO ALL MEMBER BANKS, BANK HOLDING COMPANIES, A N D OTHERS CONCERNED IN THE ELEVENTH FEDERAL RESERVE D IS T R IC T : It has come to our attention that several copies of C irc u la r No. 79-30 w e re transm itted w ithout a complete set of the three attendant amendments. In o rd e r to be sure that a ll Regulations B in d e rs a re com plete, we are transm itting again the th re e amendments w hich should have been sent w ith that c ir c u la r . T h e y are: (1) Amendments to Regulation Y , section 225.1; (2) Amendments to Regulation Y , section 225.7; and (3) Amendments to Rules R egarding Delegation of A u th o rity , section 2 6 5 .2 . Please check yo u r Regulations B in d er to v e rify that it is up to date. S in ce re ly y o u rs , R obert H . Boykin F irs t V ice President Enclosures (3) 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 AMENDMENT TO REGULATION Y f E ffe c tiv e M arch 10, 1979, the B oard ’s R e g u la tion Y (12 C .F .R . P a rt 225) is am ended b y adding a new section, §225.7, as follo w s: S E C T IO N 225.7 — C H A N G E I N B A N K CONTROL (a ) Acquisitions o f Control.14 U n d e r the C o n trol A c t, acquisition by a person o r persons acting in con cert o f the p o w e r to v o te 25 p er cent or m ore o f a class o f v o tin g securities o f a bank h old in g com pany o r State m em b er bank, unless exem pted , req u ire p rio r n otice to the B oard. In addition, a purchase, assignment, transfer, pledge, o r oth er disposition o f votin g stock through w h ich any person w ill acqu ire ow nership, control, o r the p o w e r to vote ten p er cent o r m ore o f a class o f votin g securities o f a bank h old in g com pany o r State m em b er bank w ill be d eem ed to be an ac quisition by such person o f the p o w e r to direct that institution’s m anagem ent o r p olicies if: (1 ) the institution has issued any class o f secu rities subject to registration under section 12 o f the Securities E xch an ge A c t o f 1934 (1 5 U .S .C . §781); o r (2 ) im m ed iately a fter the transaction n o other person w ill o w n a greater p ro p ortion o f that class o f v o tin g securities. O th er transactions resulting in a person’s con trol o f less than 25 p er cent o f a class o f votin g shares o f a bank h old in g com p an y o r State m em ber bank w ou ld n o t result in con trol fo r purposes o f the A c t. A n acquiring person m ay request an op p ortu n ity to contest the presum ption established by this paragraph w ith respect to a p roposed trans action. T h e B oard w ill a ffo rd the person an o p p o r tunity to present view s in w ritin g or, w h ere ap p ro priate, ora lly b e fo re its designated representatives either at in fo rm a l con feren ce discussions o r at in fo rm al presentations o f evidence. (b ) Notices. S ection 262.3 o f the B o a rd ’s R ules o f P ro ced u re govern s the submission o f notices requ ired by the C o n tro l A c t, excep t that notices should be sent to the F ed era l R e se rv e B ank o f the district in w h ich the affected bank o r bank h old in g com p an y is located . N o tic e shall n ot be con sidered g iven unless in fo rm a tio n p ro v id e d is responsive to e v ery item specified in paragraph 6 o f the C o n tro l A c t (1 2 U .S .C . § 1 8 1 7 (j)(6 )), o r ev ery item p rescribed in the appropriate B oard form s. W ith respect to personal financial state m ents requ ired by p aragraph 6 (B ) o f the C o n tro l A c t, an in d ividu al acqu irer m a y include a current statem ent o f assets and liabilities, as a date w ith in 90 days o f the notice, a b rie f in c o m e sum m ary, and a statem ent o f m aterial changes since the date th ereof, subject to the authority o f the F ed eral R e se rv e B ank o r the B oard to requ ire additional in form ation . (c ) Exempt transactions. T h e fo llo w in g trans actions are n o t subject to the p rio r n otice requ ire m ents o f the C o n tro l A c t: (1 ) the acquisition o f additional shares o f a bank h old in g com p an y o r State m em b er bank by a person w h o continuously since M a rc h 9, 1979, held p o w e r to v o te 25 p er cent o r m ore o f the votin g shares o f that institution, o r by a person w h o has acquired and m aintained con trol o f that institution a fte r com p lyin g w ith the C o n tro l A c t ’s procedures; (2 ) the acquisition o f addition al shares o f a bank h o ld in g com p an y o r State m em b er bank by a person w h o under paragraph (a ) o f this section w o u ld be d eem ed to h ave con trolled that institu tion continuously since M a rch 9, 1979, if: (i) the transaction w ill n o t result in that per son’s d irect o r in d irect ow nership o r p o w e r to v o te 25 p e r cent o r m o re o f any class o f votin g securities o f the institution; o r (ii) in oth er cases, the B oard determ ines that the person has c on tro lled the institution continu ou sly since M a r c h 9, 1979; (3 ) the acquisition o f shares in satisfaction o f a debt p reviou sly con tracted in g o o d faith or th rough testate o r intestate succession o r bona fid e g ift, p ro v id e d the acqu irer advises the F ed eral R e se rv e B ank w ith in th irty days a fte r the acqui sition and p ro v id e s any in fo rm a tio n specified in paragraph 6 o f the C o n tro l A c t that the R e serve B ank requests; (4 ) a transaction subject to ap p roval under sec tio n 3 o f the B ank H o ld in g C om p a n y A c t o r sec tion 18 o f the F ed e ra l D e p os it Insurance A c t; (5 ) a transaction described in sections 2 (a )(5 ) or 3 (a )(A ) o r (B ) o f the Bank H o ld in g C om pa n y A c t by a person there described; (6 ) a custom ary on e-tim e p ro x y solicitation and receip t o f pro-rata stock dividends; and (7 ) the acquisition o f shares o f a fo r e ig n bank h o ld in g com pany, as defined in section 225.4 (g) o f this Part, p ro v id e d this exem ption does not exten d to the reports and in fo rm a tio n required under paragraphs 9, 10, and 12 o f the C on trol A c t (1 2 U .S .C . § 1 8 1 7 ® (9 ), (1 0 ) and (1 2 )). f F o r this R egu lation to be com plete as am ended effec tiv e M a rch 10, 1979, retain: 1 ) P rin ted R egu lation Y p am ph let as am ended effective A p r il 5, 1978; 2 ) A m en d m en t effective January 1, 1979, S ection 225.4; 3 ) A m en d m en t effective M a rc h 10, 1979, Section 225.1; and 4 ) T h is slip sheet. " C o n tro l is defined in the C o n tro l A c t as the p ow er, d irectly o r indirectly, to direct the m anagem ent o r policies, o r to vote 25 per cent o r m ore o f any class o f v o tin g securities, o f an institution. 12 U .S .C . § 1 8 1 7 ( j ) ( 8 ) ( B ) . 3 10-79 - BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM BANK HOLDING COMPANIES A M E N D M E N T TO REGULATION Yt E ffe c tiv e M a rch 10, 1979, the title to the B o a rd ’s R egu la tion Y (1 2 C .F .R . P a rt 225) is revised to read “ P A R T 225 — B A N K H O L D I N G C O M P A N IE S A N D C H A N G E IN B A N K C O N T R O L ” and Section 225.1 o f that P a rt (1 2 C .F .R . §225.1) is revised to read as follo w s: S E C T IO N 225.1 — A U T H O R I T Y , S C O P E , A N D D E F IN IT IO N S (a ) Authority and scope. T h is P a rt is issued by the B oard o f G ov e rn o rs o f the F ed eral R e serve System under section 5 (b ) o f the Bank H o ld in g C om pa n y A c t o f 1956 ( “ the A c t ” ) (1 2 U .S.C . § 1844(b)) and section 7 (j)(1 3 ) o f the F ed e ra l D e posit Insurance A c t, as am ended by the C h an ge in B ank C o n tro l A c t o f 1978 ( “ the C o n tro l A c t ” ), (12 U .S .C . §1 81 7 ( j ) (1 3 )). Sections 225.2 through 225.6 o f this P a rt im plem en t the A c t, and Section 225.7 o f this P a rt im plem ents the C o n tro l A c t. (b ) Terms used in the Act. A s used in this Part, the term s “ bank h old in g com p an y,” “ com p an y,” “ bank,” “ subsidiary,” and “ B oard ” h a ve the sam e m eanings as those g ive n such term s in the A c t. A s used in section 225.7 o f this Part, the term “ person” has the m eaning g ive n it in the C o n tro l A c t. (c ) Federal Reserve Bank. T h e term “ F ed era l R e se rv e B ank” as used in this P a rt w ith respect to action by, on b e h a lf o f, o r directed to be taken by a bank h old in g com p an y o r oth er organ ization shall m ean either the F ed era l R e s e rv e B ank o f the F ed e ra l R e se rv e district in w h ich the op era tions o f the bank h o ld in g com pany o r other organ i zation are p rin cip a lly conducted, as m easured by total deposits h eld o r con trolled by it on the date on w h ich it becam e, or is to b ecom e, a bank h old ing com pany, o r such R e se rv e B ank as the B oard m ay designate. W ith respect to notices filed and other actions taken under the C o n tro l A c t, the term refers to the F ed eral R e se rv e B ank f o r insti tution to be acquired, as d eterm ined by the p re cedin g sentence in the case o f bank h o ld in g com panies and by section 9 o f the F ed era l R e serve A c t in the case o f State m em b er banks. f F o r this R egu lation to b e com plete as am ended effective M a rch 10, 1979, retain: 1 ) Printed R egu lation Y p am ph let as am ended effective A p r il 5, 1978: 2 ) A m en d m en t effective January 1, 1979, S ection 225.4; 3 ) A m en d m en t effective M arch 10, 1979, adding S ection 225.7; and 4 ) T h is slip sheet. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM RULES REGARDING DELEGATION OF AUTHORITY AMENDMENTf E ffe c tiv e M a rch 10, 1979, Section 2 6 5 .2 (f) o f the B oard ’s R u les R e ga rd in g D e le ga tio n o f A u th o r ity (1 2 C .F .R . §265.2 (f)) is am ended by adding the fo llo w in g n ew subparagraph (38): (3 8 ) U n d e r the p rovisions o f the C h an ge in B ank C o n tro l A c t o f 1978 (1 2 U .S .C . § 1 8 1 7 0 )) and Section 225.7 o f this chapter (R e g u la tio n Y ) , w ith respect to a bank h o ld in g com pany o r State m em b er bank, to d eterm ine the in fo rm atio n al suffi c ien cy o f notices and reports filed under the A c t, to extend periods f o r con sideration o f notices, to d eterm ine w h eth er a person w h o is o r w ill be sub je c t to a presum ption described in Section 2 2 5.7(a) o f this chapter should file a n o tice regard in g a p rop osed transaction, and, i f all the fo llo w in g con ditions are m et, to issue a n o tic e o f inten tion not to d isapprove a p rop osed change in control: (i) n o m em b er o f the B oard has indicated an ob jection p rio r to the R e se rv e B ank’s action. (ii) all relevan t departm ents o f the R eserve Bank concur. (iii) i f the prop osal in vo lves shares o f a State m em b er bank o r a bank h old in g com p any con trollin g a State m em b er bank, the app rop riate bank supervisory authorities h a ve indicated that they have n o ob je c tio n to the proposal, o r n o o b je c tion has been received fro m the appropriate bank supervisory authorities w ith in tim e allow ed by the A c t. (iv ) no significant p o lic y issue is raised by the proposal as to w h ich the B oard has n o t ex pressed its v iew . t F o r this publication to be com plete as am ended effective M a rc h 10, 1979, retain: 1 ) Prin ted pam phlet as revised effec tiv e A u gu st 2, 1978; 2 ) A m en d m en t effective O cto b er 19, 1978, adding paragraph ( 7 ) to Section 2 6 5 .2 (b ); 3 ) A m en d m en t effec tiv e January 1, 1979, Section 265.2; and 4 ) T h is slip sheet. 3-10-79
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