Skip to Content

Adopted Regulations
Summary of Text and Changes to Part 322 of Superintendent's Regulations

December 12, 2002


RE: Final Amendments to Superintendent's Regulations Part 322 (Pledge of Assets and Maintenance of Assets by Licensed Foreign Banking Corporations in New York)

The Department has adopted as final the attached amendments to Part 322, which will significantly reduce both the amount of pledge required by most institutions and the administrative burden of calculating and maintaining the required pledge. These changes are being effected through amendments to Part 322 of the Superintendent's Regulations. The new requirements will take effect immediately upon publication in the State Register on December 18, 2002.

Summary of New Requirement

  1. The pledge requirement is reduced to 1% of third-party liabilities, from the current requirement of the greater of 5% of non-IBF third-party liabilities (applicable to most institutions) or 1% of total third-party liabilities. This will result in an overall significant reduction of the amount of the pledge for the vast majority of institutions. The Department retains its ability to require higher asset pledge levels using its supervisory authority.
  2. The current exclusion of liabilities arising from securities repurchase agreements from the calculation is expanded to include all self-liquidating liabilities arising under "Qualified Financial Contracts."
  3. The minimum pledge is raised from $1 million to $2 million.
  4. The pledge will be capped at $400 million for well-rated institutions.
  5. The calculation of liabilities subject to pledge is changed from a daily actual to a monthly average of the Wednesday Call Report figures. The amount of required pledge will be constant for the entire month following, from the fifth business day of the month. In addition to reducing the administrative burden associated with a daily calculation, this also will eliminate the need to overpledge to cushion against unexpected liability increases. Institutions will, however, need to monitor the market value of the securities pledged to assure that the minimum required is in place throughout the month.
  6. All institutions will be able to use additional AAA rated assets for up to one-half of the required amount. Those institutions considered well-rated, also will be able to use additional assets with an investment grade rating.
  7. The pledge of obligations issued or guaranteed by entities from the home country of the foreign banking corporation will no longer be allowed. Those institutions currently pledging same-country-obligor CD's will be able to continue to pledge such assets for one year after the effective date of the new regulation up to an aggregate amount of such CDs on pledge by the institution as of December 18, 2002.
  8. Haircuts will be placed upon the market value of all assets pledged, based upon the Federal Reserve’s Discount Window valuation list. These haircuts are of varying amounts, based on the type of asset and the duration and in most cases are less than 5% and are outlined in the attached Asset Pledge List.

A new monthly reporting form will be used for the first time for the month of January 2003. Please note that the form will be due on the fifth business day of the month. Institutions may, however, begin to benefit from the new requirements on December 18, using November average liabilities for the calculation. Those institutions currently pledging less than the new $2 million minimum must increase the pledge to that amount beginning on December 18. Institutions wishing to use the list of additional investment grade securities available for pledge by well-rated institutions, should contact the Department to obtain their well-rated designation.

The Department will be posting a copy of the Asset Pledge List (the "APL"), which lists the categories of assets which may be pledged and the applicable haircuts on our website ( The APL will be updated as needed. Copies of Part 322 as amended, the APL, the new monthly reporting form and a summary of the public comments received are attached and are also available on our website.

Any questions may be addressed to the Department portfolio manager assigned to your institution or to the applicable Deputy Superintendent of Banks: P. Vincent Conlon at 212-618-6625 (212-709-1600 from December 23) for Deutsche Bank AG and Banco Nacional de Mexico; Michael Lesser at 212-618-6486 (212-709-1550 from December 23) for European and Canadian banks, or Thomas Abballe at 212-618-6485 (212-709-1560 from December 23) for banks from Asia, Latin America, Spain and the Middle East. Please note that our telephone numbers will be changing on December 23, with our scheduled move to One State Street Plaza.

Yours truly,

Elizabeth McCaul
Superintendent of Banks

Department of Financial Services


DFS Facebook page

Follow NYDFS on Twitter


Sign up online or download and mail in your application.