§1850a Securities Holding Companies

Summary

Lets a company that owns or controls one or more brokers or dealers register with the Federal Reserve to become supervised by the Fed if a foreign regulator or foreign law already requires it to have broad, consolidated supervision. Once registered, the company and its affiliates must follow Fed rules. The Fed can set what records and reports they must keep and give, require audits or certified filings, inspect them, accept reports other regulators already collect, and order regular exams. Registration becomes effective 45 days after the Fed receives the paperwork unless the Fed says sooner. The Fed must set capital and risk-management rules to protect safety and financial stability. Those rules can be tailored by company or category and must consider things like types of business, assets and liabilities (including short-term funding), off‑balance-sheet exposures, dealings with other financial firms, and the company’s role as a credit or liquidity source. A new capital rule cannot take effect until at least 180 days after the company is told. Key terms (one line each): associated person — someone that controls, is controlled by, or is under common control with the company; foreign bank and insured bank — as defined elsewhere in law; securities holding company — a non‑person entity that owns or controls brokers/dealers and its related persons, with several statutory exclusions; supervised securities holding company — one the Fed supervises. Certain enforcement and bank‑holding rules also apply as if the Fed were the banking regulator, except that registration here does not make the company a bank holding company under section 4.