Full text of Federal Reserve Bank of New York Circulars : Amendment to the Rules Regarding Delegation of Authority

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FE D E R A L R ESER VE BANK
O F N EW YORK

December

6, 1977

Amendment to the Rules Regarding Delegation of Authority

To All Member Banks, and Others Concerned,
in the Second Federal Reserve District:

The Board of Governors of the Federal Reserve
System has amended its Rules Regarding Delegation of
Authority to delegate to the Director of its Division
of Banking Supervision and Regulation the authority to
approve a State member bank's proposed subordinated
debt issue as an addition to the bank's capital.
A copy of the amendment, effective November 16,
1977, is enclosed.




P aul A. V olcker,

President.

Board of Governors of the Federal Reserve System

RULES REGARDING DELEGATION OF AUTHORITY
AM ENDM ENT
A G E N C Y : Board of Governors of the Fed­
eral Reserve System.
A C T I O N : Final rule.
S U M M A R Y : The Board of Governors has
delegated the authority to approve a State mem­
ber bank’s proposed subordinated debt issue as
an addition to the bank’s capital. The Director
of the Division of Banking Supervision and
Regulation has been assigned responsibility for
the performance of this function.
E FF E C T IV E D A T E : Immediately [Novem­
ber 16, 1977 ].
FO R F U R T H E R I N F OR MA T I ON, CON­
TACT: Jack M. Egertson, Assistant Director,
Division of Banking Supervision and Regula­
tion, Board of Governors of the Federal Re­
serve System, Washington, D.C. 20551 (202/
452-3408).
SUPPLEMENTARY INFORMATI ON: A
proposed subordinated debt issue of a State
member bank is exempt from the reserve re­
quirements imposed by the Board’s Regulation
D and interest rate limitations imposed by Reg­
ulation Q when the debt issue satisfies certain
requirements established by the Board’s regu­
lations and has been approved by the Board as
an addition to the capital structure of the issu­
ing bank. In order to expedite and facilitate the
performance of certain of the Board’s super­
visory and regulatory functions over State mem­
ber banks, the Board has delegated the author­
ity to approve a subordinated debt issue of a
State member bank as an addition to its capital
structure. The Director of the Division of Bank­
ing Supervision and Regulation has been as­
signed the responsibility for performance of
this function. This authority may be exercised
by the Director when (1 ) the terms of the pro­
posed debt issue meet the requirements of Reg­
ulations D and Q and the Board’s guideline
criteria (1976 BU LLE TIN 603, 6 0 4 ); (2 )
the appropriate Reserve Bank recommends ap­

proval; and (3 ) no significant policy issue is
raised by the proposed issue as to which the
Board has not expressed its view.
The provisions of section 553 of Title 5,
United States Code, relating to notice and pub­
lic 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 requirements of
that section.
Pursuant to section 11 (k ) of the Federal Re­
serve Act (12 U.S.C. § 248(k) ), paragraph (c)
of section 265.2 of this Part is amended by add­
ing subparagraph (25) as follows:
SECTION 265.2— SPECIFIC FU N CTION S
DELEG ATED TO BOARD E M PLO YEES
AN D TO FE D E R A L R E SE R V E BAN KS

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(25) To approve a State member bank’s
proposed subordinated debt issue as an addi­
tion to the bank’s capital structure if all of
the following conditions are met:
i) The terms of the proposed debt issue
satisfy the requirements of §§ 204.1(f)
(3) (i) and 217.1(f) (3) (i) of this part
(Regulations D and Q) and the Board’s
guideline criteria for approval of subor­
dinated debt as an addition to capital.
ii) The appropriate Reserve Bank rec­
ommends approval.
iii) No significant policy issue is raised
by the proposed issue as to which the
Board has not expressed its view.

PRINTED IN NEW YORK




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(c )
The Director of the Division of Bank­
ing Supervision and Regulation (or in the
Director’s absence, the Acting Director, is au­
thorized :

For these Rules to be complete, retain:
1) Printed pamphlet, as amended September 1, 1977.
2) Amendments effective September 27, 1977,
October 5,1977, and October 6, 1977.
3) This slip sheet.
[Enc. AT 8230]

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