International Operations of U.S. Banking Organizations – Activities and Investments of Foreign Branches of Member Banks

Section 211.4 of Regulation K

Who must file?

A foreign branch of a member bank may engage in activities and make investments pursuant to the conditions of section 211.4(a) of Regulation K. A bank must submit an application to the Federal Reserve for specific consent under section 211.4(a)(8) of Regulation K for a foreign branch to directly acquire a subsidiary. The permissible activities of any subsidiary acquired directly by a foreign branch would be limited to activities that are permissible for the bank or incidental to the branch's activities. A bank must also submit an application for specific consent under section 211.4(b) of Regulation K for a foreign branch to engage in activities that are not listed in section 211.4(a) of Regulation K.

Publication requirements--newspaper/Federal Register

None.

Required form

The information required in Form FR K-1 must be submitted. Note that a response should be provided for all report items. Please enter “not applicable” or “N/A,” where appropriate.

Processing time frames

The Federal Reserve normally acts on the application within 60 calendar days after receipt unless the Federal Reserve notifies the applicant that the 60-day period is being extended.

Factors reviewed

In an application by a member bank for a foreign branch to directly acquire a subsidiary, the factors reviewed by the Federal Reserve include whether the activities of the company would be permissible for the bank directly or incidental to the branch's activities, as well as the overall financial and managerial condition of the bank.

In an application by a member bank for a foreign branch to engage in activities not listed in section 211.4(a) of Regulation K, the factors reviewed by the Federal Reserve include whether the proposed activities are usual in connection with the business of banking in the places where it transacts business, and the overall financial and managerial condition of the banking organization.

Consummation period

The foreign branch must make the investment within one year of the approval date.