Circular
Agencies Issue Statement on Application of Recent Corporate Governance Initiatives to Non-Public Banking Organizations
July 16, 2003
Circular No. 11529

To All Depository Institutions and Others Concerned in the Second Federal Reserve District:

In a supervisory letter (SR 03-8) dated May 5, 2003, the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision (the agencies) announced the release of the Statement on Application of Recent Corporate Governance Initiatives to Non-Public Banking Organizations.

This interagency statement responds to questions on whether the agencies expect small, non-public banking organizations to comply with the Sarbanes-Oxley Act and the recent corporate governance proposals of the New York Stock Exchange and the NASDAQ.

The agencies seek to balance the goal of strong corporate governance with the recognition that smaller, non-public banking organizations typically have fewer resources and less complex operations than public organizations.

The statement encourages these organizations to review their policies and procedures relating to corporate governance and auditing to ensure that they are consistent with applicable law, regulations, and supervisory guidance.

Questions on this matter may be directed at this Bank to Thomas Oravez, Assistant Vice President, Regional/Community Banks.