Skip to Content

NY.gov Portal State Agency Listing

Translate | Disclaimer

Department of Financial Services logo

Adopted Regulations

Return to: main Legal page | Banking Division Archive

Explanatory All Institutions Letter

September 14, 2006

TO THE INDIVIDUAL OR INSTITUTION ADDRESSED:

RE: Adoption of Part 114 of the General Regulations of the Banking Board (Supervision and Regulation of Investment Company Holding Companies and Their Subsidiaries for Purposes of the European Union Financial Conglomerates Directive)

The Banking Board has adopted the attached new Part 114 of its General Regulations. The regulation will become effective upon publication in the State Register, which is expected to occur on September 27, 2006. The adopted regulation is substantially similar in form to an emergency regulation which has been in effect since June 7, 2004.

Part 114 clarifies the Superintendent’s examination, supervision, regulation, and enforcement authority over financial conglomerates for purposes of carrying out equivalent supervision under the European Union Financial Conglomerates Directive (the “Directive”).

The European Commission passed the Directive and related Directives (together, the “Directives”) to implement consolidated supervision of financial groups and conglomerates with business activities in the European Economic Community (the “EEC”). These groups and conglomerates have activities in one or more financial business areas, including banking, insurance and securities.

Under the Directives, financial groups and conglomerates with operations within the EEC will need to have consolidated supervision of the group or conglomerate deemed equivalent to supervision provided to groups or conglomerates headquartered in an EEC country. Part 114 will clarify the Department’s authority to provide such supervision for groups or conglomerates that include an entity chartered under Article XII of the New York State Banking Law. Such supervision must cover the Article XII itself, any subsidiaries thereof, as well as the most senior organizational parent of the Article XII and all of such parent organization’s subsidiaries.

Clarification of the Department’s powers to supervise across an entire financial group will ensure that the Department meets the criteria to be designated as a supervisor qualified to provide equivalent consolidated supervision for existing Article XII entities with operations in Europe.

While the New York statutory language clearly permits the examination by the Superintendent of an Article XII corporation and any subsidiaries or affiliates thereof, the authority to perform other supervisory activities and to carry out related enforcement actions requires clarification. Hence the need for this new Part 114.

The application of new Part 114 is limited to those Article XII entities subject to the Directive requiring consolidated supervision and is further limited to those entities where the Department needs to provide equivalent consolidated supervision under the Directive.

The decision making process by the Europeans on regimes of equivalent supervision and the designation of supervisors qualified to provide equivalent consolidated supervision is under way. For the Department to receive such designation, it is necessary to clarify its authority to exercise such supervision. Emergency adoption of the regulation permits the European regulatory authorities to consider the Department’s regulatory framework on an actual rather than proposed basis.

Very truly yours,

Sam L. Abram
Secretary of the Banking Board

Text