To the Chief Executive Officers of all Bank Holding Companies and of all Branches and Agencies of Foreign Banks in the Second Federal Reserve District:
The following is from a statement by the Board of Governors of the Federal Reserve System:
The Federal Reserve Board has announced its approval of an interim rule setting forth procedures for bank holding companies and foreign banks with U.S. offices to elect to be treated as financial holding companies. Financial holding companies may engage in a broad range of securities, insurance, and other financial activities under Title I of the Gramm-Leach-Bliley Act, which becomes effective on March 11, 2000.
The Board has made the rule effective on March 11, 2000, the effective date of the statute. The Board also will accept public comments on the interim rule that are submitted by March 27, 2000, and will make changes to the rule as appropriate after reviewing the comments.
While the rule will not be effective until March 11, 2000, bank holding companies and foreign banks that meet the relevant qualifications may begin filing elections to become financial holding companies at any time. Elections should be filed with the appropriate Reserve Bank for the bank holding company or foreign bank.
The Federal Reserve System will endeavor on March 13, 2000, which is the first business day following the effective date of the financial holding company provisions of the Gramm-Leach-Bliley Act, to act on all elections filed prior to February 15, 2000. The System will act on all other elections as quickly as practicable. Any elections filed prior to March 11, 2000, would not become effective, in the absence of Board action, until the 31st day after March 11 (in other words, until April 11, 2000).
With respect to foreign banks, the Board believes that the standards and procedures proposed establish a flexible approach that takes account of the statutory requirement for comparability of capital and management standards while assuring that foreign banks operating in the United States are also offered national treatment and equality of competitive opportunity.
The interim rule (pdf - 170kb), as published in the Federal Register of January 25 is available as a file. Questions on this matter may be directed, at this Bank, to Betsy Buttrill White, Senior Vice President, Bank Supervision Group.