§1850a Securities holding companies

Summary

Requires a securities holding company that already must be under full consolidated supervision by a foreign regulator to register with the Board of Governors of the Federal Reserve (the Board) if it wants the Board to supervise it in the United States. To register, the company must give the information and documents the Board asks for. The company becomes a "supervised securities holding company" 45 days after the Board receives the registration (or sooner if the Board says so). The Board can make rules about what must be filed, what records must be kept, and what reports must be sent. Records and reports may include things like balance sheets, capital and liquidity assessments, auditor reports, and reports on compliance. The Board can accept reports the company already gives to other regulators, can ask for copies, and can examine the company or use other regulators’ exams. The Board must set capital and risk-management rules for supervised securities holding companies to protect their safety and limit risks to the financial system. The Board can set different rules for different companies or groups of companies. When making rules, the Board must consider factors such as the company’s business types, assets, liabilities (including short-term funding), off-balance-sheet exposures, links with other financial firms, its importance for credit and liquidity, and the mix of its activities. Any new capital rule cannot start earlier than 180 days after the company is told. Also, certain enforcement provisions in section 1818 (subsections (b), (c) through (s), and (u)) apply to supervised securities holding companies and to their nonbank subsidiaries, with the Board treated as the appropriate federal banking agency. A supervised securities holding company is generally subject to the Bank Holding Company Act like a bank holding company, except it is not treated as a bank holding company for section 4 of that Act. Defined terms in one line each: associated person — someone who controls, is controlled by, or is under common control with the company; foreign bank and insured bank — as defined elsewhere in the U.S. Code; securities holding company — a non-person firm that owns or controls one or more registered brokers or dealers and its related persons (with listed exceptions); supervised securities holding company — one the Board oversees; affiliate, bank, bank holding company, company, control, savings association, subsidiary — same meanings as in the Bank Holding Company Act.