TO: Examiner Young, Foreign Financial Services Division
FROM: Assistant Counsel Kane, Legal Division
RE: [ ] -- Reorganization
DATE: March 20, 2003
The [ ] ("Group") is a publicly traded [ ] company which, through operating subsidiaries in the United Kingdom, Asia and elsewhere, serves as bond trustee for international and foreign bond issuances. A Group subsidiary, [ ] ("Parent"), a [ ] company, is the parent holding company of [ ] ("Trust Company"), a State-chartered limited purpose trust company which provides bond indenture trustee services for U.S. bond issuances, and [ ] ("Services"), a corporation which acts as agent accepting service of process for various clients.
The Group contemplates a reorganization in which the Parent will form [ ] ("Holdings"), a New York corporation. Holdings will become the direct parent of the Trust Company and Services. This reorganization is contemplated in order to permit the filing of taxes on a consolidated basis.
Counsel for the above-named entities has concluded that Holdings would not become a bank holding company under the proposed reorganization, since the Group and its other subsidiaries are not banks or trust companies and the only bank-regulated entity in the Group is the Trust Company. We agree with this conclusion. However, we believe that the question that must be asked is whether a change of control application is required with respect to Holding's acquisition of the Trust Company.
Since the proposed transaction involves an internal reorganization, as opposed to an unrelated entity assuming control of the Trust Company, we conclude that there is no necessity under the Banking Law for the Group to file a change of control application.