Underwriting and dealing limits applicable to foreign organizations held by insured state nonmember banks.

CFR · 2024-01-01 · US · Title 12

A bank that holds an equity interest in one or more foreign organizations which underwrite, deal, or distribute equity securities outside the United States as authorized by § 347.105(b)(14) is subject to the following limitations: (a) (2) Underwriting commitments in excess of this limit must be either: (i) Covered by binding commitments from subunderwriters or purchasers; or (ii) Deducted from the capital of the bank, with at least 50 percent of the deduction being taken from Tier 1 capital, with the bank remaining well capitalized after this deduction. (b) (1) May not exceed the lesser of $30 million or 5 percent of the bank's Tier 1 capital, subject to the following: (i) Any equity securities acquired pursuant to any underwriting commitment extending up to 90 days after the payment date for the underwriting may be excluded from this limit; (ii) Any equity securities of the entity held under the authority of §§ 347.105 through 347.109 or 12 CFR 211.10 for purposes other than distribution or dealing must be included in this limit; and (iii) Up to 75 percent of the position in an equity security may be reduced by netting long and short positions in the same security, or offsetting cash positions against derivative instruments referenced to the same security so long as the derivatives are part of a prudent hedging strategy; and (2) Must be included in calculating the general consent limits under § 347.117(b)(3) if the bank relies on the general consent provisions as authority t

official document · source cfr-2024 · id 12:§ 347.111