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Federal
reserve
Ba n k
DALLAS, TEXAS
of
Dallas
75222
Circular 81-1
January 2, 1981
ESTABLISHMENT OF INTERNATIONAL BANKING FACILITIES
TO ALL DEPOSITORY INSTITUTIONS
AND OTHERS CONCERNED IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
The Board of Governors of the Federal Reserve System has issued for
comment a proposal to amend its regulations concerning reserve requirements
and in terest ra te ceilings to perm it the establishment in the United States of
International Banking Facilities (IBFs).
Printed on the following pages is a copy of the Board's press release
and proposal. Interested parties are invited to submit comments to Theodore E.
Allison, Secretary, Board of Governors of the Federal Reserve System, 20th
S treet and Constitution Avenue, N.W., Washington, D. C. 20551, to be received
no la te r than February 13, 1981.
•
For additional information, contact Richard D. Ingram, Assistant Vice
President, Ext. 6333.
Sincerely yours,
William H. Wallace
First Vice President
Banks and others are encouraged to use the following incoming W ATS numbers in contacting this Bank:
1-800-442-7140 (intrastate) and 1-800-527-9200 (interstate). For calls placed locally, please use 651 plus the
extension referred to above.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
FEDERAL RESERVE press release
1 ■.<£
1
For immediate release
December 16, 1980
The Federal Reserve Board wishes to receive comment on proposals to
amend its regulations respecting reserve requirements and interest rate ceilings
to permit the establishment in the United States of International Banking
Facilities (IBFs).
The Board requested comment by February 13, 1981.
Under the proposals, an IBF could be established by all United States
depository institutions, by Edge and Agreement Corporations^/ and by branches
and agencies in this country of foreign banks.
To give all States an opportunity to revise their laws or regulations
relating to the establishment of IBFs —
as has been done by New York State —
Board proposed that IBFs could not be established before October 1, 1981.
The Board's proposals would permit IBFs to:
— Accept time deposits, free of Federal reserve requirements,
from foreign residents.
— Borrow funds, free of Federal reserve requirements, from
depository institutions located outside the United States, or
from other IBFs.
— Offer to foreign resident^ time deposits with a minimum
maturity, or notice requirement,of two days, and pay interest
on these deposits free of the interest rate limitations of
Regulation Q.
— Offer time deposits authorizing minimum deposits or withdrawals of
$500,000.
— Or (as an alternative proposal) offer
in which the depositor must maintain
average daily balance of $500,000 and
to make transactions of not less than
time deposits
a minimum
is permitted
$100,000.
1/ U.S. chartered corporations authorized to engage in international
or foreign banking, or other international or foreign operations.
the
ATTACHMENT A
SUBJECTS ON WHICH THE BOARD WOULD PARTICULARLY LIKE
TO RECEIVE COMMENT RESPECTING ITS IBF PROPOSALS
1.
The alternative proposals on minimum deposit and
transaction limits for IBFs.
2.
The two-day minimum maturity or notice requirement.
3.
Limitations on the customers to whom IBFs may extend credit.
4.
Limitations on the sources from which IBFs may obtain deposits,
and borrow funds.
5.
The implications of the Board's proposals for competitive
balance among depository institutions.
6.
The amount of lead time institutions would need in order to
establish an IBF.
-2— Extend credit to foreign residents, other IBFs or to
the United States office of the IBF's parent institution.
(Such borrowings by a United States institution from its
own IBF would be subject to Eurocurrency reserve requirements.)
There are attached to this announcement:
1.
A list of questions on which the Board, while welcoming comment
on any aspects of its proposals, would particularly like to receive comment.
2.
Attachments
The text of the Board's official notice in this matter.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
[12 CFR Part 204; 12 CFR Part 217]
(Docket No. R-0214)
Notice of Proposed Rulemaking
INTERNATIONAL BANKING FACILITIES
AGENCY:
Board of Governors of the Federal Reserve System.
ACTION:
Proposed rulemaking.
SUMMARY: The Board of Governors is requesting comment from the public
on a proposal to amend Regulation D— Reserve Requirements of Depository
Institutions (12 CFR Part 204) and Regulation Q— Interest on Deposits
(12 CFR Part 217) to facilitate the establishment in the United States
of international banking facilities ("IBFs") of depository institutions,
Edge and Agreement Corporations, and branches and agencies of foreign
banks located in the United States. Under the proposal, an IBF could
accept deposits from foreign residents and borrow from depository in
stitutions located outside the United States or from other IBFs. All
such funds would be exempt from Federal reserve requirements. In add
ition, IBFs of depository institutions subject to Regulation Q would
be permitted to offer to foreign residents large denomination time de
posits with a minimum maturity or required notice period prior to with
drawal of two days. Funds raised by an IBF could be used only to extend
credit to foreign residents, to other IBFs, or to the institution estab
lishing the IBF. Funds derived by an institution from its own IBF would
be subject to Eurocurrency reserve requirements. Thus, an IBF at a
U. S. banking office would be able to conduct a banking business with
foreign residents on nearly the same basis as an offshore shell branch.
DATE: Interested parties are invited to submit relevant data, views
and other comments. Comments must be received by February 13, 1981.
ADDRESS: Comments, which should refer to Docket No. R-0214, should
be addressed to Theodore E. Allison, Secretary, Board of Governors of
the Federal Reserve System, 20th Street and Constitution Avenue, N. W.
Washington, D. C. 20551, or should be delivered to room B-2223 between
8:45 a.m. and 5:15 p.m. Comments received may be inspected in room
B-1122 between 8:45 a.m. and 5:15 p.m., except as provided in section
261.6(a) of the Board's Rules Regarding Availability of Information
(12 CFR 261.6(a)).
FOR FURTHER INFORMATION CONTACT: Gilbert T. Schwartz, Assistant General
Counsel (202/452-3625), or Paul S. Pilecki, Attorney (202/452-3281),
Legal Division; or Jeffrey R. Shafer, Deputy Associate Director (202/452
3796), Division of International Finance, Board of Governors of the
Federal Reserve System, Washington, D. C. 20551.
- 2 -
SUPPLEMENTARY INFORMATION: The Board of Governors has proposed amend
ments to Regulation D— Reserve Requirements of Depository Institutions
(12 CFR Part 204) and Regulation Q— Interest on Deposits (12 CFR Part 217)
that would facilitate the establishment in the United States of international
banking facilities ("IBFs") by depository and other institutions to
promote international banking activity in the United States. Under
the proposal, IBFs in all U. S. depository institutions, Edge and Agree
ment Corporations, and U. S. branches and agencies of foreign banks
would be permitted to accept time deposits from foreign residents and
to borrow from foreign depository institutions or other IBFs. All such
funds would be exempt from Federal reserve requirements. Funds raised
by an IBF could be used only to extend credit to foreign residents,
to other IBFs or to the institution establishing the IBF. Funds derived
by an institution from its own IBF would be subject to Eurocurrency
reserve requirements. In addition, member banks, Edge and Agreement
Corporations, and U. S. branches and agencies of foreign banks that
are subject to Regulation Q-' would be authorized to offer and pay in
terest on an IBF time deposit with a minimum maturity or required notice
period prior to withdrawal of two days if the funds were received from
non-United States residents and used to extend credit only to non-United
States residents, other IBFs or the U. S offices of the depository in
stitution conducting the IBF business.
In July 1978, the New York Clearing House Association (NYCHA)
submitted a proposal requesting that the Federal Reserve authorize IBFs.
Public comment on the issue^ .related to the proposal was requested by
the Board in December 1 9 7 8 . Earlier, New York State had enacted legis
lation granting an exemption from New York State and local taxes for
net income of.a banking institution derived from an international bank
ing facility.-' This legislation becomes effective contingent upon action
1/ Regulation Q applies to the following offices of parent foreign
banks having total worldwide consolidated bank assets in excess of $1
billion: insured and uninsured Federal branches, uninsured State branches,
and Federal and State agencies. Under section 18(g) of the Federal
Deposit Insurance Act (12 U.S.C. § 1828(g)), 12 CFR Part 329 applies
to all insured State branches and those insured Federal branches of
foreign banks with total worldwide consolidated bank assets of $1 billion
or less.
2/ Studies of international banking facilities were prepared by the
staff of the Board of Governors in December 1978 and October 31, 1980.
Copies of these reports and the summary of public comments on the December 1978
proposal are available through the Board's Freedom of Information Office
(202/452-3684).
3/
59 N. Y. Tax Law § 1450 et seq. (McKinney).
- 3 -
being taken by the Federal Reserve to exempt IBF deposits from Federal
reserve requirements and restrictions on the payment of interest.—'
In July 1979, the Board announced that it was deferring a final decision
on the proposal until a later date. After further study of the concept
of IBFs and in view of the enactment of the Monetary Control Act of
1980 (Title I of Pub. L. 96-221), the Board believes that it would be
feasible to permit domestic depository institutions, Edge and Agreement
Corporations and U. S. branches and agencies of foreign banks to estab
lish IBFs beginning October 1, 1981. In this regard, under the Monetary
Control Act, the Board has the authority to set a reserve requirement
ratio of zero per cent on nonpersonal time deposits (12 U.S.C. § 461(b)(2)),
whereas section 19 of the Federal Reserve Act previously required a
minimum average reserve ratio on all time deposits of three per cent.
In addition, the Monetary Control Act authorizes the Board to impose
reserve requirements on international banking facilities of nonmember
depository institutions to the same extent the Board imposes such re
quirements on IBFs of member banks (12 U.S.C. § 461(b)(5)). The follow
ing amendments to Regulations D and Q concerning the establishment of
an IBF are proposed for public comment.
Establishing an IBF
The Board proposes that a depository institution, an Edge
or Agreement Corporation, or a U. S. branch or agency of a foreign bank
be permitted to conduct an IBF business at any of its offices at which
it is legally authorized to engage in business. An institution that
desired to establish an IBF would be required to notify the Federal
Reserve Bank in its District 14 days prior to the first reserve computa
tion period during which it intended to begin accepting IBF deposits
or IBF borrowings and to agree to abide by the conditions established
by the Board for conducting an IBF business. Application to or approval
by the Board would not be required to establish an IBF. However, an
institution would be subject to any restrictions established by its
chartering or licensing authority or its primary supervisor concerning
the types of activities in which an IBF would be engaged.
An institution would not be required to establish a separate
organizational structure for an IBF. It is contemplated that an IBF
would be operated primarily as a recordkeeping entity similar to an
offshore shell branch. An IBF could be established initially by iden
tifying and segregating existing assets and liabilities that qualify
under the definitions in Regulations D and Q and under other regulatory
4/ In order for the New York State tax exemption to apply, the New
York State Banking Department is required to adopt laws or regulations
conforming to laws of the United States or regulations of the Board
relating to reserve requirements with respect to deposits received by
an international banking facility from foreign persons and relating
to the payment of interest on such deposits (1978 N. Y. Laws, c. 288,
S 10).
- 4 -
provisions applicable to IBFs. An institution would be required to
maintain segregated accounts for its IBFs within the office in which
the IBF is located, report its IBF assets and liabilities as required
by the Board, and comply with any other requirements otherwise estab
lished by the Board for IBFs. Failure to comply with the Board's re
strictions on the type of business IBFs may engage in could result in
the imposition of reserve requirements on the IBF or revocation of the
institution's authority to maintain an IBF.
Permissible IBF Liabilities
As a general matter, an IBF would be permitted to accept de
posits only from non-United States residents. Such deposits would be
subject to special rules, discussed in greater detail below, permitting
shorter minimum maturities than applicable to other types of time de
posits but requiring larger minimum denominations than required for
other forms of time deposits under Regulation Q. An IBF also would
be permitted to borrow from foreign offices of other depository insti
tutions, from other IBFs, and from the United States and non-United
States operations of the same institution. Such IBF borrowings would
not be subject to Federal Reserve deposit interest rate limitations
and would be exempt from Federal reserve requirements.
Restrictions on eligible holders of IBF deposits. Only non-United States
residents, including foreign affiliates of United States corporations,
other IBFs, and the institution operating the IBF would be eligible
to maintain time deposits in IBFs. Deposits could be received from
non-United States residents and foreign affiliates of United States
corporations provided that such funds were used in support of the de
positor's international business or business outside of the United States.
For example, funds received on deposit from a foreign affiliate of a
U. S. corporation could not be derived from the United States operations
and cannot represent funds that were advanced to the foreign affiliate
for purposes of temporary investment. In order to insure that IBF de
posits are restricted to non-United States residents, IBFs would be
prohibited from issuing negotiable certificates of deposit, bankers'
acceptances, or other bearer instruments.
Maturity of IBF time deposits. Generally, IBF time deposits would be
subject to a minimum maturity or required notice period prior to with
drawal of two days. An IBF would not be permitted a reserve requirement
exemption for transaction accounts, since an IBF is not intended to
enable foreign customers to have such accounts exempt from reserve re
quirements.
- 5 -
Minimum size of transactions. The Board believes that IBFs should be
established primarily to engage in a wholesale international banking
business. Therefore, it is proposed that the minimum amount of any
deposit or withdrawal to or from an IBF account would be $500,000.
A minimum transaction of such an amount also would help to insure that
IBF deposits would not be used for transaction purposes.
As an alternative, the Board requests public comment on whether
to permit an IBF to offer customers time deposit accounts that require
a minimum daily average balance during the reserve computation period
of $500,000 and a minimum amount of $100,000 for deposit or withdrawal
transactions. This alternative may provide IBFs with additional flex
ibility and enable smaller organizations that engage in international
business to make use of an IBF. However, this could affect the competi
tive balance between larger banks that established IBFs and smaller
banks that did not in competing for the deposits of foreign residents.
In addition, the smaller minimum transaction size might increase the
likelihood that IBF deposits could be used for transactions purposes.
IBF borrowings. An IBF also would be permitted to borrow from any office
located outside the United States of another depository institution
or Edge or Agreement Corporation, from any office located outside the
United States of a foreign bank, from other IBFs, from foreign central
banks and international official institutions, as well as from the foreign
branches and domestic operations of the depository institution establishing
the IBF. The minimum maturity of such borrowings would be on an overnight
basis.
Permissible IBF Assets
An IBF would be able to place funds derived from its deposits
and borrowings in extensions of credit to foreign customers, to other
IBFs, or to foreign branches and U. S. offices of its parent depository
institution. Advances to U. S. offices of the same institution would
be subject to the reserve requirement on Eurocurrency liabilities at
the U. S. office in the same manner as balances advanced from a foreign
branch to its U. S. parent depository institution.
Credit could be extended in the form of a loan, deposit, place
ment, advance, or investment or other similar asset. A foreign customer
for purposes of extensions of credit by an IBF would be determined using
the test that would be applied in determining deposit sources. In this
regard, permissible extensions of credit would be limited to non-United
States residents for use of the funds in their international business
or business outside the United States. A foreign subsidiary or other
affiliate of a United States corporation would be a permissible loan
customer of an IBF only if the proceeds of such a loan would be used
to finance the foreign operations of the borrower.
- 6 -
Foreign Currency Operations of IBFs
An IBF would be permitted to accept deposits and make loans
in currencies other than U. S. dollars. The Board believes that the
conduct of foreign banking business would be facilitated by allowing
IBFs to engage in transactions using foreign currencies.
Supervision and Reporting Requirements
IBF operations of a depository institution would be subject
to the same examination and supervision procedures that apply to the
other operations of the institution and would be conducted in conjunction
with examination of other operations of the office where it was located.
The Board would, however, require reports of a depository institution's
IBF business for purposes of monitoring monetary and credit conditions
as well as for other purposes.
Beginning Date of IBF Operations
The amendments to Regulations D and Q would become effective
for the reserve computation period beginning October 1, 1981, and, under
current provisions, the corresponding reserve maintenance period beginning
October 15, 1981. At present, New York State has adopted legislation
exempting income of IBFs from State and local income taxes. The Board
recognizes that, if IBFs are to be established on a nationwide basis,
adequate time would be needed to permit an opportunity for other states
and Federal agencies to consider changes in laws and regulations. An
effective date for IBFs in October 1981 would permit other states and
Federal agencies to adopt similar measures if they so desire.
*
*
*
*
*
Comment is invited from all parties on the issues raised by
the proposal. The Board is particularly interested in views on the
minimum maturity or notice requirement and transaction size requirements
for IBF time deposits, on the customers to whom IBF credit may be ex
tended and the sources from which IBF deposits may be derived, on the
implications for competitive balance among banks, and on the amount
of lead time that institutions would need in order to establish IBFs.
Comment should be sent by February 13, 1981, to Theodore E. Allison,
Secretary, Board of Governors of the Federal Reserve System, Washington,
D. C. 20551.
Pursuant to authority under sections 19, 25, and 25(a) of
the Federal Reserve Act (12 U.S.C. §§ 461 et seq., 601 et seq.) and
section 7 of the International Banking Act of 1978 (12 U.S.C. § 3105),
the Board proposes to amend Regulation D (12 CFR Part 204) and Regula
tion Q (12 CFR Part 217), effective October 1, 1981, as follows:
- 7 -
1.
amended as follows:
In Regulation D, section 204.2, paragraph (h) would be
SECTION 204.2— DEFINITIONS
*
(h)
*
*
*
*
"Eurocurrency liabilities" means:
(1) For a depository institution or an Edge or
Agreement Corporation organized under the laws of the United States,
the sum, if positive, of the following:
(i)
net balances due to its non-Unite
offices and its international banking facilities from its United States
offices;
(ii)
assets (including participations)
by its non-United States offices, by non-United States offices of an
affiliated Edge or Agreement Corporation, or by its international bank
ing facilities that were acquired after October 6, 1979, from its United
States offices; and
(iii) credit outstanding from its non-United
States offices or international banking facilities to United States
residents (other than assets acquired and net balances due from its
United States offices), except credit extended (A) from its non-United
States offices in the aggregate amount of $100,000 or less to any United
States resident, (B) by a non-United States office that at no time during
the computation period had credit outstanding to United States residents
exceeding $1 million, or (C) to an institution that will be maintaining
reserves on such credit pursuant to this Part or to another international
banking facility. Credit extended from non-United States offices to
a foreign branch, office, subsidiary, affiliate or other foreign establish
ment ("foreign affiliate") controlled by one or more domestic corporations
is not regarded as credit extended to a United States resident if the
proceeds will be used in its foreign business or that of other foreign
affiliates of the controlling domestic corporation(s). Credit extended
from international banking facilities to a foreign affiliate controlled
by one or more domestic corporations is not regarded as credit extended
to a United States resident if the proceeds will be used by the borrower
in its international business or business outside the United States.
(2) For a United States branch or agency of a foreign
bank, the sum, if positive, of the following:
- 8 -
(i)
net balances due to its foreign
cluding offices thereof located outside the United States) and its inter
national banking facilities after deducting an amount equal to 8 per
cent of the following: The United States branch's or agency's total
assets less the sum of cash items in process of collection, unposted
debits, balances due from depository institutions organized under the
laws of the United States, balances due from other foreign banks, its
international banking facility loans (excluding any amount extended
to the branch or agency), balances due from foreign central banks, and
net balances due from its foreign bank, its international banking facility
and the foreign bank's United States and non-United States offices;
(ii)
assets (including participations)
by its foreign bank (including offices thereof located outside the United
States), by its parent holding company, by non-United States offices
of an affiliated Edge or Agreement Corporation, or by its international
banking facilities that were acquired after October 6, 1979, from the
United States branch or agency (other than assets required to be sold
by Federal or State supervisory authorities); and
(iii)
credit outstanding from its intern
banking facilities to United States residents (other than assets acquired
and net balances due from its United States offices), except credit
extended to an institution that will be maintaining reserves on such
credit pursuant to this Part or to another international banking facility.
Credit extended from international banking facilities to a foreign affiliate
controlled by one or more domestic corporations is not regarded as credit
extended to a United States resident if the proceeds will be used by
the borrower in its international business or business outside the United
States.
2.
The following definitions in section 204.2 would not be
amended, but are set forth for information purposes.
SECTION 204.2— DEFINITIONS
*
*
*
*
*
(o)
"Foreign bank" means any bank or other similar inst
tution organized under the laws of any country other than the United
States or organized under the laws of Puerto Rico, Guam, American Samoa,
the Virgin Islands, or other territory or possession of the United States.
*
*
*
*
*
- 9 -
(r) "United States" means the States of the United States
and the District of Columbia.
(s) "United States resident" means (1) any individual
residing (at the time of the transaction) in the United States; (2)
any corporation, partnership, association or other entity organized
in the United States ("domestic corporation"); and (3) any branch or
office located in the United States of any entity that is not organized
in the United States.
3.
By adding a new section 204.9, as follows:
SECTION 204.9— INTERNATIONAL BANKING FACILITIES
(a)
Definitions.
apply:
For purposes of this section, the following definitions
(1) "International banking facility" or "IBF" means a facility
represented by a set of asset and liability accounts segregated on the
books and records of a depository institution, United States branch
or agency of a foreign bank, or an Edge or Agreement corporation that
includes only international banking facility time deposits, international
banking facility borrowings, and international banking facility extensions
of credit.
(2) "International banking facility time deposit" or "IBF
time deposit" means a deposit:
(i) that is payable:
(A) on a specified date not less than two days after
the date of deposit;
(B) upon expiration of a specified period of time
not less than two days after the date of deposit; or
(C) upon written notice that actually is required
to be given by the depositor not less than two days prior to the date
of withdrawal;
(ii) that is not issued in negotiable or bearer form;
(iii)
that represents funds deposited to the credit of
a non-United States resident or to a foreign branch, office, subsidiary,
affiliate, or other foreign establishment ("foreign affiliate") con
trolled by one or more domestic corporations that are used solely to
support the international or non-United States operations of the depos
itor or an affiliate of the depositor; and
- 10 -
(iv)
that is held pursuant to an agreement or arrangement
under which no deposit or withdrawal of less than $500,000 is permitted.
(3) "International banking facility borrowing" or "IBF borrowing"
means a borrowing, regardless of maturity, represented by a promissory
note, an acknowledgment of advance, or similar obligation described
in section 204.2(a)(1)(vii) that is issued:
(i) to any office located outside the United States of
another depository institution or Edge or Agreement Corporation organized
under the laws of the United States;
(ii) to any office located outside the United States of
a foreign bank;
(iii)
to a United States office or a non-United States
office of the IBF's depository institution;
(iv) to another IBF; or
(v) to an institution whose time deposits are exempt
from interest rate limitations under section 217.3(g) of Regulation Q
(12 CFR 217.3(g)).
(4) "International banking facility extension of credit"
or "IBF loan" means any transaction where an IBF supplies funds by making
a loan, purchasing or acquiring a security, or placing funds in a de
posit account. Such transactions may be in the form of a promissory
note, acknowledgment of advance, due bill, repurchase agreement, or
any other form of credit transaction. Such funds may be advanced only
to:
(i)
a non-United States resident for use by the borrower
in its international business or business outside the United States;
(ii)
a foreign branch, office, subsidiary, affiliate or
other foreign establishment controlled by one or more domestic corporations
for use by the borrower in its international business or business outside
the United States;
(iii) another IBF; or
(iv) any office of the institution establishing the IBF.
- 11 -
(b) Exemption from reserve requirements. Notwithstanding any other
provision of this Part, a depository institution is not required to
maintain reserves against its international banking facility time deposits
and international banking facility borrowings. For purposes of this
Part, the business of an IBF shall be restricted solely to accepting
international banking facility deposits and international banking facility
borrowings and to making international banking facility extensions of
credit.
(c) Establishment of an international banking facility. A depository
institution, an Edge or Agreement Corporation or a United States branch
or agency of a foreign bank may establish an IBF in any location where
it is legally authorized to engage in IBF business as provided in paragraph (b).
(d) Notification to Federal Reserve. Fourteen days prior to the first
reserve computation period that a depository institution intends to
engage in IBF business as provided in paragraph (b), it shall notify
the Federal Reserve Bank of the District in which it is located that
it intends to establish an IBF. Such notification shall include a state
ment of intention by the depository institution that it shall comply
with the rules of this Part concerning IBFs, including restrictions
on sources and uses of funds, and recordkeeping and accounting require
ments. Failure to comply with the requirements of this Part shall subject
the IBF to reserve requirements or result in the revocation of the insti
tution's authority to operate an IBF.
(e) Recordkeeping requirements. A depository institution shall segregate
on its books and records the asset and liability accounts of its IBF
and submit reports concerning the operations of its IBF as required
by the Board.
(f) Foreign currency transactions.
made in any currency.
A transaction of an IBF may be
4.
In Regulation Q, section 217.1 is amended in paragraphs
(a) and (b) as follows:
SECTION 217.1— DEFINITIONS
(a) Demand deposits. The term "any deposit which is
payable on demand," hereinafter referred to as a "demand deposit," in
cludes every deposit which is not a "time deposit," "international banking
facility time deposit," or "savings deposit," as defined in this section.
(b) Time deposits. The term "time deposits" means "time
certificates of deposit," "time deposits, open account," and "international
banking facility time deposit," as defined in this section.
- 12 -
*
5.
as follows:
*
*
*
*
Section 217.1 is amended by adding a new paragraph (i)
SECTION 217.1— DEFINITIONS
*
*
*
*
*
(i) "International banking facility time deposit" or
"IBF time deposit" means a deposit:
(i)
that is payable:
(A) on a specified date not less than two days
after the date of deposit;
time notless
(B) upon expiration of a specified period
than two days after the date of deposit; or
of
(C) upon written notice which actually is re
quired to begiven by the depositor not less than two days prior to
the date of withdrawal;
(ii)
that is not issued in negotiable or bearer form;
(iii) that represents funds deposited to the credit
of a non-United States resident or to a foreign branch, office, subsidiary,
affiliate, or other foreign establishment ("foreign affiliate") controlled
by one or moredomesticcorporations that are
used solely to support
theinternationaloperations
of the depositor or an affiliate of the
depositor; and
(iv)
that is held under an agreement or arrangeme
under which no deposit or withdrawal of less than $500,000 is permitted.
By order of the Board of Governors, December 16, 1980.
[signed]
Theodore E. Allison
Theodore E. Allison
Secretary of the Board
[SEAL]
@FedFRASER