IIB Releases Memorandum Regarding Regulation and Supervision of U.S. Branches and Agencies of Foreign Banks

The Institute of International Bankers ("IIB") released a memorandum intended to help non-U.S. banking organizations obtain approval from the SEC to hold reserve account assets for SEC-registered broker-dealers. The memorandum provides a summary of standards foreign banks must satisfy to be eligible to establish a U.S. branch, and a general overview of how U.S. branches of foreign banks are regulated and supervised.Non-U.S. banks have historically been able to hold reserve account assets for broker-dealers. However, under a recent SEC's rule making, non-U.S. banks would essentially have to apply for permission from the SEC to maintain this authority. Non-U.S. banks applying to the SEC for permission may use the IIB's memorandum in support of their applications.

The new "permissioning" process was to go into effect this month, but has now been pushed back, as discussed in the news story immediately above, to March 3.

Lofchie Comment: Cadwalader has already submitted requests, on behalf of a numbr of foreign banks, requesting authority their U.S. branches to hold reserve account deposits. Anyone having a question on the process may contact Steven Lofchie orScott Cammarn.

See: IIB Memorandum: Regulation and Supervision of U.S. Branches and Agencies of Foreign Banks by U.S. Banking Authorities and the Treatment of Claims of their Third-Party Depositors in Liquidation.Related News: "SEC Publishes Two Final Rules Regarding Broker-Dealers (Fed. Reg.) (with Lofchie Comment)" (August 21, 2013).