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FEDERAL RESERVE BANK OF NEW YORK Circular No. 10,060 July 25,1986 A M E N D M E N T TO R E G U LA T IO N K To A ll Depository Institutions in the Second Federal Reserve District, and Others Concerned: The Board of Governors of the Federal Reserve System has amended its Regulation K, “International Banking Operations,” effective July 8, 1986. The amendment removes the requirement that any foreign investment by a banking organization that exceeds 10 percent of the investor’s capital and surplus must be formally approved by the Board. Such investments may now be made under the Regulation’s prior notification procedures. A copy of the text of the amendment is enclosed; questions may be directed to our Foreign Banking Applications Department (Tel. No. 212-791-5878). E . G e r a l d C o r r ig a n , President. BOARD OF GOVERNORS OF T H E F E D E R A L R E S E R V E SYSTEM INTERNATIONAL BANKING OPERATIONS A M EN D M EN T TO REGULATION K (effective Ju ly 8,1986) FEDERAL RESERVE SYSTEM 12 CFR Part 211 [Docket No. R-0576] Regulation K; International Banking Activities AGENCY: Board of Governors of the Federal Reserve System. ACTION: Final rule. SUMMARY: The Board has amended its Regulation K relating to the types of foreign investments that require the specific consent of the Board. The regulation currently requires an application to the Board where the investor banking organization proposes to invest more than 10 percent of its capital and surplus in a foreign organization. The amendment removes this requirement and permits the investor to make the investment after prior notice to the Board 45 days in advance of the date the proposed investment would be made. EFFECTIVE DATE: July 8, 1980. FOR FURTHER INFORMATION CONTACT: James S. Keller, Manager, International Banking Applications, Division of Banking Surpervision and Regulation (202/452-2523); or Earnestine Hill or Dorothea Thompson, Telecommunication Device for the Deaf (TDD) (202/452-3544), Board of Governors of the Federal Reserve System. SUPPLEMENTARY INFORMATION: Regulation K establishes the procedures governing investments by U.S. banking organizations in foreign companies engaged in permissible activities. Investments of less than $15 million and 5 percent of the investor’s capital and surplus may be made under a general consent granted in the regulation. Investments not eligible for the general consent require 45 days’ prior notice to the Board, after which the investment may be made. Section 211.5(c)(2) of Regulation K (12 CFR 211.5(c)(2)) provided that the prior notice procedures only applied if the total proposed investment did not exceed 10 percent of the capital and surplus of the investor. The purpose of this requirement was to permit the Board to review applications involving significant commitments of the investor’s resources. In reviewing such applications the Board has found that these invetments do not always raise issues that require Board consideration. Accordingly, the Board is removing the requirement that any investment that is greater than 10 percent of the investor’s capital and surplus must be considered by the Board. Such investments may now be made under the prior notification procedures of § 211.5(c)(2). Investors will be required to continue to file full information on Form F.R. K-l, Attachment H (OMB No. 7100-0107) for proposed investments that exceed 10 percent of the capital and surplus of the investor so that the Board can determine whether individual notices raise other issue of concern to the Board. The provisions of 5 U.S.C. 553 relating to notice, public participation and deferred effective date are not followed in connection with the adoption of this amendment because the changes involved are procedural in nature and do not constitute substantive rules subject to the requirement of that section. Pursuant to section 605(b) of the Regulatory Flexibility Act (Pub. L 96354; 5 U.S.C. 601 et seq.), the Board of Governors of the Federal Reserve System certifies that the amendment adopted will not have a significant economic impact on a substantial number of small entities that would be subject to the regulation. List of Subjects in 12 CFR Part 211 Banks, Banking, Federal Reserve System, Foreign banking, Investments, Reporting and recordkeeping requirement, Export trading companies, Allocated transfer risk reserve, Reporting and disclosure of international assets, Accounting for fees on intenational loans. PART 211-[AMENDED] 12 CFR Part 211 is amended as follows: 1. The authority citation for Part 211 continues to read as follows: Authority: Federal Reserve Act (12 U.S.C. 211 et seq.), Bank Holding Company Act of 1956, as amended (12 U.S.C. 1841 et seq.); the International Banking Act of 1978 (Pub. L. 95369; 92 Stat. 607; 12 U.S.C. 3101 (et seq.)); the Bank Export Services Act (Title II, Pub. L. 97290, 96 Stat. 1235); and the International Lending Supervision Act (Title IX, Pub. L. 98181, 97 Stat. 1153). §211.5 [Amended] 2. Section 211.5(c)(2) is amended by removing at the end of the first sentence the phrase "if the total amount to be invested does not exceed 10 percent of the investor’s capital and surplus”. By order of the Board of Governors of the Federal Reserve System, July 8,1989. William W. Wiles, Secretary of the Board. [FR Doc. 86-15732 Filed 7-11-88; 8:45 am! B L GC D 6210-01-M IL IN O E PRINTED IN NEW YORK, FROM FEDERAL REGISTER, VOL, 51, NO. 134 [Enc. Cir. No. 10,060]
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