International Operations of U.S. Banking Organizations – Investment in an Export Trading Company

Section 211.34 of Regulation K

Who must file?

A bank holding company, a banker's bank, a foreign banking organization, or an Edge or agreement corporation that is a subsidiary of a bank holding company but not of a bank may make an investment without Federal Reserve approval in an export trading company as long as the investment qualifies for general consent under section 211.34(b)(1) of Regulation K. However, the company must submit a post-investment notice to the Federal Reserve by the end of the month in which the investment is made. For an investment that exceeds the general consent limits or for an expansion of the activities of an existing export trading company subsidiary, the entity must submit prior notice to the Federal Reserve.

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 notice period for an investment that exceeds the general consent limits expires 60 calendar days after the notice is received by the Federal Reserve unless the Federal Reserve notifies the applicant that the 60-day notice period is being extended. The Federal Reserve may waive a portion of the 60-day notice period, suspend processing of the notice, or act on the notice under the specific consent procedure based on the circumstances presented.

Factors reviewed

The factors considered by the Federal Reserve include the permissibility of the activities of the export trading company to be acquired or established and the financial impact of the proposal on the overall banking organization.

Consummation period

The bank holding company may make an investment in an export trading company 60 days after the notice has been accepted by the Federal Reserve unless the processing period is extended. The investment may be consummated before the expiration of the 60-day period if the Federal Reserve has provided written notice of its intention not to object to the proposal. The company must make the investment within one year of the earliest date on which the investment could be made.