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

New Part 114 of the General Regulations of the Banking Board (Supervision of Article XII Investment Company Holding Companies and Their Subsidiaries For Purposes of the European Union Financial Conglomerates Directive)

September 27, 2006

Part 114  

SUPERVISION AND REGULATION OF ARTICLE XII INVESTMENT COMPANY HOLDING COMPANIES AND THEIR SUBSIDIARIES FOR PURPOSES OF THE EUROPEAN UNION FINANCIAL CONGLOMERATES DIRECTIVE

(Statutory Authority: Banking Law §§ 14[1], 14[1][k], Article XII)

Sec.

114.1 Purpose and Scope
114.2 Definitions
114.3 Examination, Supervision, Regulation and Enforcement Authority of the Superintendent over Investment Company Holding Companies and their Subsidiaries for Purposes of the European Union Financial Conglomerates Directive
114.4 Supervision Agreements with Financial Conglomerates
114.5 Limitations

§ 114.1 Purpose and Scope.

Article XV of the Banking Law authorizes the formation of investment companies and Article XII of the Banking Law sets forth the rights and obligations of such investment companies. The purpose of this Part is to clarify the Superintendent’s examination, supervision, regulation, and enforcement authority over certain financial conglomerates for purposes of carrying out equivalent supervision under the European Union Financial Conglomerates Directive.

§ 114.2 Definitions.

For purposes of this Part:

“Banking Law” means the New York Banking Law.

”Banking organization” means all banks, trust companies, private bankers, savings banks, safe deposit companies, savings and loan associations, credit unions and investment companies organized under the Banking Law.

“Company” means a corporation, partnership, unincorporated association, limited liability company, or any other entity.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of a company, whether by means of the ownership of the voting stock or equity interests of such company or of one or more persons controlling such company, by means of a contractual arrangement or otherwise. Control shall be presumed to exist if any company, directly or indirectly, owns, controls or holds with the power to vote ten per centum or more of the voting stock or other equity interests of any company or of any company which owns, controls or holds with power to vote ten per centum or more of the voting stock or other equity interests of such company.

“Equivalent supervision” means a supervisory and regulatory regime meeting the standards required under the Financial Conglomerates Directive.

“Financial conglomerate” means a group meeting the definition of financial conglomerate under the Financial Conglomerates Directive and having an investment company within its structure.

“Financial Conglomerates Directive” means the European Union Financial Conglomerates Directive 2002/87/EC, as it may be amended from time to time.

“Investment company” means a banking organization organized pursuant to the Banking Law and subject to the provisions of Article XII of the Banking Law.

“Investment company holding company” means the top tier corporation or other entity that controls an investment company.

“Subsidiary” means a company at least 10 per centum of the voting stock or other equity interests of which is controlled directly or indirectly by an investment company holding company.

“Supervision Agreement” means an individual agreement entered into between a financial conglomerate and the Superintendent which provides for a detailed plan of supervision by the Superintendent over the financial conglomerate, including specific regulatory requirements applicable to the investment company holding company and its subsidiaries.

§ 114.3 Examination, Supervision, Regulation, and Enforcement Authority of the Superintendent over Investment Company Holding Companies and their Subsidiaries for Purposes of the European Union Financial Conglomerates Directive.

To assist the Banking Department in carrying out equivalent supervision of a financial conglomerate for purposes of carrying out the requirements of the Financial Conglomerates Directive, the Superintendent shall have examination, supervision, regulation, and enforcement authority over an investment company holding company and any of its subsidiaries to the same extent as he or she has examination, supervision, regulation, and enforcement authority over any banking organization under the Banking Law.

This authority includes, but is not limited to, the authority to:

  1. apply Banking Law Section 36 relating to examinations and confidentiality of information to an investment company holding company and its subsidiaries, as if such entities were banking organizations;
  2. issue orders to an investment company holding company and its subsidiaries as provided in Banking Law Section 39, as if such entities were banking organizations;
  3. impose monetary penalties for violation of law or regulation, as provided in Banking Law Section 44, as if such entities were banking organizations;
  4. impose capital requirements on an investment company holding company and its subsidiaries, as appropriate or required in the judgment of the Superintendent;
  5. prescribe requirements for the keeping of books and records by the investment company holding company and its subsidiaries;
  6. require filing by the investment company holding company and its subsidiaries with the Superintendent of periodic reports of condition, reports of income, risk profiles, large exposures and such other reports as may be required by the Superintendent;
  7. levy assessments on the investment company holding company and its subsidiaries, as provided in Banking Law Section 17, as if such entities were banking organizations;
  8. issue such general or specific rules or regulations as may be necessary to effectuate the examination, supervision, regulation, and enforcement authority over investment company holding companies and their subsidiaries for purposes of meeting the requirements of equivalent supervision under the Financial Conglomerates Directive.

§ 114.4 Supervision Agreements with Financial Conglomerates.

The Superintendent may enter into one or more Supervision Agreements with each financial conglomerate. Such Supervision Agreements will set forth the specific plan of supervision and detailed regulatory requirements applicable to an investment company holding company and its subsidiaries (e.g. capital requirements, reporting requirements, transactional limitations, etc.). The Superintendent may exercise enforcement authority under Banking Law Sections 39 and 44 for breaches or violations of such Supervision Agreements.

Such Supervision Agreements shall be in addition to, and shall not serve as a limitation on, the Superintendent’s examination, supervision, regulation and enforcement authority provided under this Part over investment company holding companies and their subsidiaries to the same extent as the Superintendent has examination, supervision, regulation, and enforcement authority over any banking organization under the Banking Law.

§ 114.5 Limitations.

The Superintendent’s examination, supervision, regulation, and enforcement authority over investment company holding companies and their subsidiaries as provided in this Part is limited to those cases in which the Banking Department needs to provide equivalent supervision for a specific financial conglomerate under the Financial Conglomerates Directive.

The provisions of Banking Law Article XIII governing voluntary and involuntary liquidations of banking organizations shall not be applicable to investment company holding companies, although they are applicable to investment companies.

Explanatory All Institutions Letter