Highlights:
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The FDIC Board of Directors has adopted various amendments and revisions
to its international banking rules, effective July 1, 2005. The final
rule amends Parts 303, 325, 327 relating to international banking and
revises Part 347, Subparts A and B.
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The availability of general consent for foreign branching and
investments by insured state nonmember banks has been expanded.
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The change in ownership of a grandfathered branch, without loss of
grandfathered status, has been addressed.
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The information and examination commitments required in connection with
deposit insurance applications of U.S. branches of foreign banks have
been revised to address deposit insurance applications of depository
institution subsidiaries of foreign banks, agents for service, and
consent to U.S. jurisdiction by foreign banks.
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The FDIC's relocation rule for existing insured U.S. branches of foreign
banks ("grandfathered branches") has been amended to address intrastate
and interstate relocations.
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The "fixed" percentage asset pledge requirement for grandfathered
branches has been replaced by a risk-focused asset pledge and the list
of assets eligible to be pledged has been revised.
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The amendments and revisions contained in the final rule are effective
on July 1, 2005.
Continuation of
FIL-40-2005
Distribution:
FDIC-Supervised Banks (Commercial and Savings)
Suggested Routing:
Chief Executive Officer
Chief Information Officer
Compliance Office
Legal Counsel
Note:
FDIC
Financial Institution Letters (FILs) may be accessed from the FDIC's Web
site at
www.fdic.gov/news/financial-institution-letters/2005/index.html
.
To receive FILs electronically, please visit
http://www.fdic.gov/about/subscriptions/fil.html
.
Paper copies of FDIC FILs may be obtained through the FDIC's Public
Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434
(1-877-275-3342 or (703) 562-2200).
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International Banking-
Final Rule
Relating to International Banking
The Federal Deposit Insurance Corporation (FDIC) Board of Directors has
adopted various amendments and revisions to its international banking rules.
The amendments and revisions concern Parts 303, 325, 327 and 347 of the
FDIC's Rules and Regulations and will become effective on July 1, 2005.
To reduce regulatory burden, the existing rules in Part 347, Subparts A and
B, have been reorganized and clarified. For example:
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The FDIC has revised the lists of authorized activities for foreign
branches and investments of state nonmember banks under Subpart A to
more closely track the parallel provisions of Regulation K for member
banks. The revised lists of activities authorized for state nonmember
bank foreign branches and investments also address approval of
activities, in some circumstances, under Part 362 of the FDIC's Rules
and Regulations, as well as under Part 347.
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The FDIC's rules relating to general consent, expedited processing, and
specific consent for branching and investments have also been placed in
separate sections specifically addressing the type of application
processing being sought. In addition, revisions to Subpart A expand, in
certain circumstances, general consent for insured state nonmember banks
to operate branches in foreign countries and invest in foreign
organizations. They also address circumstances in which termination of
activities in foreign countries or divestiture may be required.
A combination of changes to Part 303, Subpart J, and Part 347, Subpart B,
deal with insured U.S. branches of foreign banks ("grandfathered branches").
These amendments reorganize the FDIC's existing rules to more clearly
indicate when the rules apply to state and federal insured branches or only
to state branches. They also address:
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Changes in ownership of grandfathered branches without loss of
grandfathered status;
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Application requirements for branches seeking to relocate within the
same state or in another state;
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Substituting a risk-focused asset pledge requirement that will generally
range from 2 to 8 percent for the existing 5 percent "fixed" asset
pledge; and
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Revision of the kinds of assets that foreign banks may pledge to the
FDIC under the FDIC's asset pledge rule.
In addition, the final rule addresses cross-border supervisory
information-sharing and revises the FDIC's foreign bank examination and
information commitment regulation to address deposit insurance applications
of depository institution subsidiaries of foreign banks, agents for service,
and consent to U.S. jurisdiction by foreign banks.
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Michael J.
Zamorski
Director
Division of Supervision and Consumer Protection
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