Application for a Foreign Organization to Acquire a Bank Holding Company

Instructions for Preparation of
FR Y-3F
Application for a Foreign Organization
to Aquire a U.S. Bank or Bank Holding
Company
Purpose
This application collects data that are used to evaluate
the present and pro forma ownership structure and financial condition of the applicant and its proposed subsidiary(ies), the home country supervisory regime, and the
proposed transaction in terms of its effects on competition in the relevant market, and the convenience and
needs of the public.

Who Must File This Application
Any company organized under the laws of a foreign
country that is seeking to acquire a U.S. bank or bank
holding company must file this application.

Nonbanking Activities
If Applicant proposes as part of this transaction to
engage, directly or indirectly, in any U.S. nonbanking
activity, Applicant must file a companion FR Y-4 application. See section 225.28 of Regulation Y for a listing
of permissible nonbanking activities approved by regulation and section 225.24 for application procedures to
engage in those and other nonbanking activities. See also
Item 17 below.

Financial Holding Companies
If Applicant seeks to become a financial holding company in connection with the proposed transaction, it must
submit the necessary written declaration as part of the
FR Y-3F filing. The declaration must conform to Regulation Y (sections 225.81 and 225.82, or sections 225.90,
225.91, and 225.92, as appropriate). Applicant should
contact the appropriate Reserve Bank for further
information.
FR Y-3F
September 2005

If the proposal involves a financial holding company that
is seeking to acquire a depository institution that is not
well capitalized or well managed, Applicant must contact the appropriate Reserve Bank regarding the development and execution of an agreement acceptable to the
Federal Reserve. The agreement will outline the actions
to be taken by Applicant to address the financial and/or
managerial deficiencies of the depository institution, and
any limitations on the activities of Applicant until those
deficiencies are satisfactorily addressed. The agreement
must be executed prior to or upon consummation of the
proposed transaction.

Tiered Applicant Organizations
In tiered organizations that consist of more than one
foreign bank applicant, each parent foreign bank of the
foreign bank applicant must respond individually to
Items 5 (internal controls), 6 (financial information),
7 and 8 (home country supervision), and 9 (anti-money
laundering measures). If an applicant organization within
the structure is not a foreign bank, it should consult with
the appropriate Reserve Bank regarding the financial and
managerial information that should be provided.

Preparation of Application
For relevant filing information, Applicants should consult the Board’s Regulation Y (12 CFR Part 225), a copy
of which is available on the Board’s public website at
http://www.federalreserve.gov/regulations/ or through
any Reserve Bank. Additional filing information is
available on the Board’s public website at http://
federalreserve.gov/generalinfo/applications/afi/. As indicated on the FR Y-3F cover page, an application may
first be submitted in draft form whenever Applicant so
chooses.
Inquires regarding the preparation and filing of applications should be directed to the appropriate Reserve Bank
Page 1

Instructions for Preparation

as defined in Regulation Y. Applicants are encouraged to
contact Federal Reserve staff as soon as possible for
assistance in identifying the specific type of information
that should be provided in the application (particularly
information related to convenience and needs or competitive considerations, including management official interlocks subject to Regulation L (12 CFR Part 212)) and to
determine whether an examination of the bank(s) to be
acquired will be required in connection with the proposed transaction.
The required application is to be filed by submitting the
information requested in this form to the appropriate
Reserve Bank. Alternative formats, if used, must provide
all requested information. The application must be substantially complete and responsive to each item of information requested (including an indication that the answer
is ‘‘not applicable’’ or ‘‘none’’ where such is the case) in
order to be considered properly filed in accordance with
the requirements of the BHC Act
The appropriate Reserve Bank, within the established
time limitations, will review the submitted application
to determine if it is substantially complete. If so, an
acknowledgement letter will be sent indicating the date
the application has been formally accepted for processing. If not, the application will be returned to the Applicant. As necessary to complete the record of the application, a request for additional information will be sent to
the contact person named in the application. Under certain circumstances, name check and financial information may be required; such information for individuals
should be submitted on the Interagency Biographical and
Financial Report (FR 2081c; OMB No. 7100-0134), and
may be submitted in advance of the application. Contact
the appropriate Reserve Bank for further information.
The Federal Reserve System reserves the right to require
the filing of additional statements and information. If any
information initially furnished in the application changes
significantly during processing of the application, these
changes should be communicated promptly to the appropriate Reserve Bank.

Publication Requirement
For applications filed pursuant to section 3 of the BHC
Act, Applicant should publish a notice in a newspaper
of general circulation in the community(ies) in which
the head offices of the target bank holding company, its
Page 2

largest subsidiary bank, and each bank to be directly
or indirectly acquired is located. The newspaper notice
should provide opportunity for the public to submit written comments on the proposal for at least 30 calendar
days after the date of publication, and must be published
no more than 15 calendar days before and no later than
7 calendar days after the date the application is filed with
the appropriate Reserve Bank. On written request by the
Applicant, the Reserve Bank may publish notice of proposals in the Federal Register no more than 15 calendar
days before the application is filed.
Applicant should consult with the appropriate Reserve
Bank or the Board’s public website for the specific
publication format used at that Reserve Bank. A copy
of the newspaper notice publication must be provided
to the appropriate Reserve Bank, as required by section 262.3(b) of the Board’s Rules of Procedure.
The following is a sample notice:
Notice of Application for
(Formation of Bank Holding Company) or
(Acquisition of a Bank or Bank Holding Company
by a Bank Holding Company) or
(Merger of Bank Holding Companies)
(Name and location of head office) intends to apply to
the Federal Reserve Board for permission to (form a
bank holding company with respect to) (acquire a bank,)
(acquire/merge with another bank holding company,)
name and location of head office). We intend to acquire
control of (name of bank and location of head office;
include name and location of savings association or
other nonbank insured depository institution, if any). The
Federal Reserve considers a number of factors in deciding whether to approve the application, including the
record of performance of banks we own in helping to
meet local credit needs.
You are invited to submit comments in writing on this
application to the Federal Reserve Bank of
,
(address of appropriate Reserve Bank). The comment
period will not end before (date must be no less than
30 days from the date of publication of the application)
and may be somewhat longer. The Board’s procedures
for processing applications may be found at 12 CFR
Part 262. Procedures for processing protested applications may be found at 12 CFR 262.25. To obtain a copy
FR Y-3F
September 2005

Instructions for Preparation

of the Federal Reserve Board’s procedures, or if you
need more information about how to submit your comments on the application, contact (name of Reserve Bank
contact and telephone number). The Federal Reserve will
consider your comments and any request for a public
meeting or formal hearing on the application if they are
received in writing by the Reserve Bank on or before the
last day of the comment period.

Confidentiality
Under the provisions of the Freedom of Information Act,
the application is a public document and available to the
public upon request.
If Applicant is of the opinion that disclosure of commercial or financial information would likely result in substantial harm to its competitive position or that of its
subsidiaries, or that disclosure of information of a personal nature would result in a clearly unwarranted invasion of personal privacy, confidential treatment of such
information may be requested. This request for confidential treatment must be submitted in writing concurrently
with the submission of the application, and must discuss
in detail the justification for confidential treatment. Such
justification must be provided for each response for
which confidential treatment in the public portion of the
application is requested.
Applicant’s reasons for requesting confidentiality should
demonstrate specifically the harm that would result from
public release of the information. A statement simply
indicating that the information would result in competitive harm or that it is personal in nature is not sufficient.
(A claim that disclosure would violate the law or policy
of a foreign country is not, in and of itself, sufficient to
exempt information from disclosure. It must be demonstrated that disclosure would meet either the ‘‘substantial
competitive harm’’ or ‘‘unwarranted invasion of personal
privacy’’ tests).
Information for which confidential treatment is requested
should be: (1) specifically identified in the public portion of the application (by reference to the confidential section); (2) separately bound; and (3) labeled
‘‘Confidential.’’
Applicant should follow this same procedure on confidentiality with regard to filing any supplemental information to the application.
FR Y-3F
September 2005

The Board will determine whether information submitted
as confidential will be so regarded, and will advise
Applicant of any decision to make available to the public
information labeled ‘‘Confidential.’’ However, it shall be
understood that, without prior notice to Applicant, the
Board may disclose or comment on any of the contents
of the application in the Order or Statement issued by the
Board in connection with its decision on the application.
The Board’s staff normally will apprise Applicant in the
course of the applications process that such information
may need to be disclosed in connection with the Board’s
action on the application.

Preliminary Charter Approval
If a proposed new operating bank is involved, Applicant
should have received at least preliminary approval of the
charter before filing this application in final form. Applicant should contact the appropriate Reserve Bank during
the preliminary charter process regarding the application
to be filed.

Supporting Information
The formal questions in the application are not intended
to limit Applicant’s presentation. Applicant bears the
full burden for presenting and documenting a case to
meet the statutory criteria for approval. Supporting information for any or all factors, setting forth the basis for
Applicant’s judgment, may accompany the application.

Compliance
The Board expects Applicant to comply with all representations and commitments made in this application.
Applicant should immediately contact the Federal
Reserve if there is any material change in the information contained in the application prior to consummation.

Requested Information
I. Proposed Transaction
Item 1
Provide the following with respect to the Bank/Bank
Holding Company to be acquired:
1. Total number of shares of each class of stock
outstanding;
Page 3

Requested Information

2. Number of shares of each class now owned or under
option by Applicant, by subsidiaries of Applicant, by
principals1 of Applicant, by trustees for the benefit of
Applicant, its subsidiaries, shareholders, and employees as a class, or by an escrow arrangement instituted
by Applicant;

of condition and report of income and dividends as filed
with a Federal supervisory authority.
Item 3

3. Number of shares of each class to be acquired by cash
purchase, the amount to be paid, per share and in
total, and the source of funds to be applied to the
purchase;

1. For applications filed pursuant to section 3(a)(1) of
the BHC Act, which concerns initial acquisition of
bank shares or assets, provide for Applicant and Bank
a list of principals (including changes or additions to
this list to reflect consummation of the transaction),
providing information with respect to each as follows:

4. Number of shares of each class to be acquired by
exchange of stock, the exchange ratio, and the number and description of each class of Applicant’s shares
to be exchanged;

a. Name and address (City and State/Country). If
the principal’s country of citizenship is different
from his or her country of residence, then state the
country of citizenship;

5. Copy of any existing or proposed contract or agreement that in any manner limits the ability of individuals associated with Bank/Bank Holding Company to
compete with Bank/Bank Holding Company, Applicant or its subsidiaries. Discuss the purpose of and
the reasonableness of such an arrangement with
respect to duration, geographic area and the institutions involved; and

b. Title or positions with Applicant and Bank

6. A brief description of any unusual contractual terms,
emphasizing those terms not disclosed elsewhere in
the application. Also, provide the expiration dates
of any contractual arrangement between the parties
involved in this application.
Item 2
Discuss any material change in the financial condition of
Bank/Bank Holding Company since the most recent
examination/inspection. Indicate the amount of any dividend payment by Bank/Bank Holding Company since
the date of the most recent report of condition and report
of income and dividends. Also, indicate the amount of
any Bank/Bank Holding Company dividends that are
planned prior to consummation. For applications filed
pursuant to section 3(a)(1) of the BHC Act, provide for
Bank a copy of all schedules from the most recent report
1. The term principal as used herein means any individual or corporation that (1) owns, directly or indirectly, 10 percent or more of the
outstanding shares of any class; (2) is a director, trustee, partner, or
executive officer; or (3) with or without ownership interest, participates, or
has the authority to participate in major policy-making functions, whether
or not the individual has an official title or is serving without compensation. If Applicant believes that any such individual should not be regarded
as a principal, Applicant should so indicate and give reasons.

Page 4

c. Principal occupation if other than with Applicant
or Bank; and
d. Percentage of direct or indirect ownership, if such
ownership represents 10 percent or more of any
class of shares, or positions held in any other U.S.
depository institution or depository institution
holding company.2 Give the name and location of
such other U.S. depository institution or depository
institution holding company. (Information that
has been collected or updated within the past
12 months may be submitted, unless Applicant
has reason to believe that such information is
incorrect.)
2. For application filed pursuant to sections 3(a)(3),
which concerns subsequent acquisition of bank
shares, or 3(a)(5) of the BHC Act, which concerns
bank holding company mergers, list any changes in
management or other principal relationships for
Applicant and the Bank/Bank Holding Company
which will result from the proposal. For any existing
or proposed principal of Applicant or Bank/Bank
Holding Company that is also a principal of any other
U.S. depository institution or depository institution
holding company, provide the following information:
a. Name, address, and title or position with Applicant, Bank/Bank Holding Company, and the other
2. For purposes of the application, a depository institution is defined as
a commercial bank (including a private bank), a savings bank, a trust
company, a savings and loan association, a homestead association, a
cooperative bank, an industrial bank, or a credit union.
FR Y-3F
September 2005

Requested Information

U.S. depository institution or depository institution
holding company (give name and location of the
other U.S. depository institution or depository institution holding company);
b. Principal occupation if other than with Applicant
or Bank/Bank Holding Company; and
c. Percentage of direct or indirect ownership held in
the other U.S. depository institution or depository
institution holding company if such ownership represents 10 percent or more of any class of shares.
(Information that has been collected or updated
within the past 12 months may be substituted,
unless Applicant has reason to believe that such
information is incorrect.)

II. Operations, Structure, and Ownership
of Applicant
Item 4
1. For a foreign organization seeking initial entry:
a. Discuss whether Applicant engages directly in the
business of banking outside the United States. In
this regard, Applicant should address whether it
engages directly in banking activities usual in connection with the business of banking in the countries in which it is organized or operating.
b. Provide a brief history of Applicant, including
ranking by asset size in the home country.
c. Provide a brief summary of Applicant’s experience
in international banking. The discussion should
include a general description of the volume and
character of Applicant’s current international business and the location, number, and asset size of
direct offices overseas.
d. Provide an organization chart for Applicant and its
ultimate parent, if any, showing all subsidiaries of
Applicant and its ultimate parent.3

e. Provide the name, asset size, general activities,
place of incorporation, and ownership share held
by Applicant for each of Applicant’s direct and
indirect subsidiaries that comprise 1 percent or
more of the Applicant’s worldwide consolidated
assets.
f. List all persons (natural as well as legal) in the
upstream chain of ownership of Applicant who,
directly or indirectly, own 5 percent or more of the
voting shares of Applicant and its ultimate parent,
if any. Provide information concerning any voting
agreements or other mechanisms that exist among
shareholders for the exercise of control over Applicant or its ultimate parent.
g. For the two individuals with the most senior
decision-making authority for any applicant foreign bank provide the biographical information
requested in the Interagency Biographical and
Financial Report FR 2081c (the Financial Report
need not be provided). This information may be
submitted in advance of the application.
h. Provide for Applicant and Bank/Bank Holding
Company copies of their most recent quarterly and
annual reports prepared for shareholders.
2. For a foreign organization that has previously been
approved to acquire a U.S. bank or to establish a U.S.
branch or agency:
a. Provide current information on the foreign bank’s
ranking by asset size in the home country.
b. Provide current information regarding all persons
(natural as well as legal) in the upstream chain of
ownership of Applicant who, directly or indirectly,
own 5 percent or more of the voting shares of the
foreign bank and its ultimate parent, if any. Provide information concerning any voting agreements or other mechanisms that exist among shareholders for the exercise of control over the foreign
bank or its ultimate parent(s).
Item 5

3. The ‘‘ultimate parent’’ of a foreign bank is the parent of the foreign
bank that is not a subsidiary of any other company. A ‘‘subsidiary’’ is any
organization 25 percent or more of whose voting shares is directly or
indirectly owned, controlled, or held with the power to vote by a company,
including a foreign bank or foreign banking organization, or any organization that is otherwise controlled or capable of being controlled by a foreign
bank or foreign banking organization.
FR Y-3F
September 2005

1. for a foreign organization seeking initial entry:
Describe the methods used by Applicant to monitor
and control its operations, including those of its
domestic and foreign subsidiaries and offices (e.g.,
through internal reports and internal audits). Note the
Page 5

Requested Information

scope and frequency of those methods and whether
the methods are subject to review by external auditors
and/or the home country supervisor. Also, state
whether audit results are shared with the home country supervisor and/or Applicant’s external auditors.
2. For a foreign organization that has previously been
approved to acquire a U.S. bank or to establish a U.S.
branch or agency:
Confirm (or modify as appropriate) that there have
been no material changes in the methods used by the
foreign bank to monitor and control its operations,
including those of its domestic and foreign subsidiaries, since the Federal Reserve’s most recent determination that the foreign bank is subject to comprehensive consolidated supervision.

III. Financial and Managerial Information
The financial statements should be stated in the local
currency of the country in which the head office of
Applicant is located. The financial statements may also
be stated in U.S. dollars, but conversion to U.S. dollars
is not required. The statements should be prepared in
accordance with local accounting practices; however, an
explanation of the accounting terminology and the major
features of the accounting standards used in the preparation of the financial statements must be provided. This
explanation should include a discussion of the following
practices and any other material practices as determined
by the Applicant:
• The accounting principles used for consolidation of
investments on a line-by-line basis in the preparation
of the financial statements. Comments should address
the method and/or criteria by which the majorityowned companies are consolidated on a line-by-line
basis, and the basis for carrying value and manner of
income recognition of any majority-owned subsidiaries that are not consolidated on a line-by-line basis.
The method of valuation of the investments in which
Applicant owns between 20 percent and 50 percent,
i.e., historical cost, net asset value (book value), market value, or appraised value, and the manner of the
recognition of income should be included.
• The accounting practices used in the valuation, e.g.,
historical cost, net asset value (book value), market
value, or appraised value, of short-term investments,
long-term investments, and fixed assets. Comments
Page 6

should disclose the manner of the recognition of
increases and/or decreases in the value of the assets.
• The recording of guarantees, letters of credit, contingencies, leases, pension obligations, and other similar
accounts on the books of Applicant. The explanation
should indicate whether such accounts are carried as
assets and/or liabilities on Applicant’s financial statements, are disclosed as footnotes to the financial statements, or are undisclosed.
• The method utilized in translating foreign currency
transactions and foreign currency financial statements
with respect to current assets, long-term investments,
fixed assets, long-term debt, and forward exchange
contracts. The discussion should also include the
method of recognition of any gains or losses resulting
from such translation and the effect of the translation
upon the recognition of revenue and expense and the
determination of net income.
• The method by which interest revenue and interest
expenses are recorded on the books of Applicant.
Item 6
Provide the following for each Applicant:
1. Parent-only and consolidated balance sheets showing
separately each principal group of assets, liabilities
and capital accounts as of the end of the most recent
fiscal quarter and the two (2) most recent fiscal yearends; debit and credit adjustments (explained by footnotes) reflecting the proposed transaction; and the
resulting pro forma balance sheet.
NOTE: Goodwill and all other intangible assets
should be set out separately on the balance sheet
according to type of intangible. Also indicate the
amortization period for any amortizable intangible
asset on the balance sheet.
2. If the Applicant and any parent foreign bank are from
countries subscribing to the Basel Accord, provide,
on a consolidated basis, a breakdown of each organization’s risk-weighted assets as of the end of the most
recent fiscal quarter, showing each principal group of
on- and off-balance sheet assets and the relevant risk
weights. Also, identify the components of tier 1 and
tier 2 capital under the Basel risk-based capital
guidelines and provide calculations of the ratios of
tier 1 and total capital to risk-weighted assets for the
FR Y-3F
September 2005

Requested Information

Applicant and any parent foreign bank. Provide the
amount, maturity, and a brief description of debt
instruments and indicate which instruments qualify
under the Basel risk-based capital guidelines as tier 2
capital for each organization. If the home country
capital standards of the Applicant or any parent foreign bank differ from that established under the Basel
Accord, provide information concerning the capital
standard applied in the home country of the Applicant
and any parent foreign bank, as well as information
sufficient to evaluate each organization’s capital position adjusted as appropriate for accounting and structural differences. Further, provide, to the extent possible, information comparable to the Basel format.
3. Income statements, parent-only and consolidated,
showing separately each principal source of revenue
and expense, through the end of the most recent fiscal
quarter and for the past two (2) fiscal years.
4. Material changes between the date of the balance
sheets and the date of the application should be disclosed. If there are no material changes, a statement to
that effect should be made.

IV. Home Country Supervision
In order to approve an application by a foreign bank to
become a bank holding company, the Board must determine that the Applicant and any parent foreign bank are
each subject to comprehensive supervision or regulation
on a consolidated basis by the appropriate authorities in
the home country of each bank. The Board considers this
standard met if the foreign bank’s home country supervisor receives sufficient information on the foreign bank’s
worldwide operations (including the bank’s relationships
to any affiliates) to assess the foreign bank’s overall
financial condition and compliance with law and regulation. In making such a determination, the Board assesses,
among other factors, the extent to which the home country supervisor:
• ensures that the foreign bank has adequate procedures
for monitoring and controlling its activities worldwide;
• obtains information on the condition of the foreign
bank and its subsidiaries and offices outside the home
country through regular reports of examination, audit
reports, or otherwise;
• obtains information on the dealings and relationship
between the foreign bank and its affiliates, both foreign
and domestic;

5. Current information that will enable the Board to
make a judgment as to the quality of Applicant’s
assets. The information should be presented for Applicant’s consolidated organization and, if available,
should include, but need not be limited to, the following (Applicant should provide definitions of the
terms.):

• receives from the foreign bank financial reports that
are consolidated on a worldwide basis, or comparable
information that permits analysis of the foreign bank’s
financial condition on a worldwide, consolidated basis;
and

a. Asset classifications or assessments made by foreign banking authorities;

• evaluates prudential standards, such as capital adequacy and risk asset exposure, on a worldwide basis.

b. Delinquencies;
c. Non-accrual loans;
d. Assets acquired in satisfaction of debts previously
contracted;
e. Loans with reduced interest charges; and

Item 7
1. For a foreign organization seeking initial entry:
Describe the bank regulatory system that exists in the
home country of Applicant and, if different, the home
country of any foreign bank in the ownership chain.4

f. Foregone interest income on non-accrual and
reduced interest loans.
6. Total reserves available to cover credit-related losses
for the end of the most recent quarter end and the
two most recent fiscal year ends. The total reserve
amounts should be broken down into ‘‘specific’’
‘‘general,’’ and/or other relevant categories.
FR Y-3F
September 2005

4. If the Federal Reserve has previously determined that another bank
from Applicant’s home country is subject to comprehensive consolidated
supervision, Applicant may request a copy of the previous application
from the Federal Reserve under the Freedom of Information Act. After
reviewing the record in the previous application, Applicant may make
a statement that it is subject to the same supervisory regime as the foreign bank previously considered by the Federal Reserve, rather than

Page 7

Requested Information

The response should identify Applicant’s primary
home country supervisor and the major laws governing Applicant’s operations and activities. The description also should include a discussion of each of the
following:
a. The scope and frequency of on-site examinations
by the home country supervisor. Describe the scope
and frequency of on-site examinations, identifying
the operational areas reviewed and the general
procedures used by the home country supervisor to
evaluate asset quality and internal controls. Also,
discuss the manner in which the home country
supervisor monitors the condition and operations
of Applicant’s subsidiaries and foreign offices.
b. Off-site monitoring by the home country supervisor. Discuss the general type and frequency of
filing of regulatory and financial reports submitted
by Applicant to the home country supervisor.
Specify whether the reports contain information on
the domestic and foreign subsidiaries of Applicant
and, if so, whether this information is provided on
a consolidated basis or for each entity separately.
c. The role of external auditors. Discuss the general
frequency, nature, and scope of review of Applicant (including subsidiaries and foreign offices)
performed by external auditors, particularly with
respect to the review of asset quality and internal
controls. Discuss whether the home country supervisor sets standards for such reviews and the manner (if at all) by which the external audit results are
communicated to the home country supervisor.
Include a brief discussion of the general standards
or requirements that apply to the external auditors
themselves.
d. Transactions with Affiliates. Indicate whether (and,
if so, discuss how) the home country supervisor
regulates and monitors Applicant’s transactions
with its affiliates (e.g., through reporting requirements, lending limits, or other restrictions). Define
the home country’s definition of ‘‘affiliate’’ for this
purpose (if different from the Federal Reserve’s
responding to each subpart of this Item. In addition, Applicant should
confirm that there have been no material changes in the manner in which
Applicant is supervised and regulated by its home country supervisor(s)
since that previous application or, if material changes have occurred,
Applicant should describe such changes.

Page 8

definition 5), and specify whether any such restrictions apply to ‘‘upstream,’’ ‘‘downstream,’’ or ‘‘sister’’ affiliates.
e. Other Applicable Prudential Requirements. To the
extent not previously addressed, describe any prudential limitations (e.g., with respect to capital
adequacy, asset classification and provisioning,
single or aggregate credit and foreign currency
exposure limits, and liquidity) that are imposed on
the operations of Applicant. Describe the methods
used by the home country supervisor to monitor
compliance with these limitations.
f. Remedial Authority of the Home Country Supervisor. Describe the general methods available to the
home country supervisor to enforce Applicant’s
compliance with prudential controls and other
supervisory or regulatory requirements.
g. Prior approval requirements. Indicate whether
prior approval of the home country supervisor is
needed for Applicant to make investments in
other companies, or generally to establish overseas offices. Indicate the type of information the
home country supervisor reviews in making its
determination.
2. For a foreign organization that has previously been
approved to acquire a U.S. bank or to establish a U.S.
branch or agency:
Provide the date of the Federal Reserve’s most recent
determination that the foreign bank is subject to comprehensive consolidated supervision. Confirm (or
modify as appropriate) that there have been no material changes in the manner in which the foreign organization, including any parent holding companies, is
supervised and regulated by its home country supervisor(s) since that time.
Item 8
Indicate what other home country regulatory authorities,
if any, in addition to the primary home country supervisor, supervise subsidiaries or particular activities of

5. An ‘‘affiliate’’ of a foreign bank or of a parent of a foreign bank is
any company that controls, or is controlled by, or is under common control
with, the foreign bank or the parent of the foreign bank.
FR Y-3F
September 2005

Requested Information

Applicant. Briefly describe the financial and/or examination requirements, including the general scope and frequency of on-site examinations, if any, of each such
regulatory authority. Also, discuss whether such regulatory authorities exchange information with the primary
home country supervisor, including financial or other
supervisory information.

V. Anti-Money Laundering and Other
Related Measures
Item 9
1. For a foreign organization seeking initial entry:
a. Describe any home country laws or regulations
that are designed to deter or prohibit money laundering, terrorist financing, or other illicit activities.
Also, describe the requirements that Applicant’s
(and any foreign bank parent’s) home country
supervisor imposes on banks for the detection and
prevention of money laundering, terrorist financing, and other illicit activities, and the reporting of
suspicious transactions.
b. Discuss the actions taken by Applicant (and any
foreign bank parent) to ensure that the bank and its
offices and subsidiaries have implemented sufficient safeguards to prevent such operations from
being used for purposes of money laundering,
terrorist financing, or other illicit activities. The
response should describe:
i. the policies and procedures implemented with
respect to anti-money laundering policies and
measures, including any customer due diligence, recordkeeping, and cash and/or suspicious transaction reporting requirements;
ii. the steps taken to ensure compliance with these
policies and procedures (including the nature
and frequency of employee training and compliance monitoring by internal auditors); and
iii. the extent to which these policies and procedures are subject to independent external
audit and examination by the home country
supervisor.
The response should indicate whether the financial
institution-specific recommendations of the Financial
FR Y-3F
September 2005

Action Task Force (‘‘FATF’’) have been implemented
throughout the organization.6 The response also
should confirm (or modify as appropriate) that the
anti-money laundering and counter-terrorist financing
policies and procedures would be implemented at
BANK.
2. For a foreign organization that has previously been
approved to acquire a U.S. bank or to establish a U.S.
branch or agency:
Indicate whether there have been any material
changes in either the anti-money laundering laws and
regulations of the home country of the foreign bank
or of Applicant or in the foreign bank’s anti-money
laundering policies and procedures, since the Federal
Reserve’s most recent review of such matters.

VI. Competition and Convenience and
Needs
If the subject transaction is a bank holding company
formation involving only one bank or an application filed
pursuant to section 3(a)(3) or 3(a)(5) of the BHC Act
to acquire a de novo bank, a response to items 10 and 11
is not required. Otherwise, Applicant should contact
the appropriate Reserve Bank to determine whether a
response to items 10 and 11 will be necessary. If a
response is required, Applicant should obtain a preliminary definition of the relevant banking markets from the
appropriate Reserve Bank. If Applicant disagrees with
the Reserve Bank’s preliminary definition of the banking
market(s), it may in addition to supplying the information requested on the basis of the Reserve Bank’s definition of the banking market(s), include its own definition
of the banking market(s), with supportive data, and
answer the questions based on its definition. If later
analysis leads Federal Reserve staff to alter the preliminary definition provided, Applicant will be so informed.
Item 10
Discuss the effects of the proposed transaction on competition considering the structural criteria specified in the
Board’s Rules Regarding Delegation of Authority (section 265.11c(11)(v)). Applicant may be required to provide additional information if Federal Reserve staff determines that the proposal exceeds existing competitive
6. These recommendations can be obtained from the following web
site: http://www.oecd.org/fatf/index.htm.

Page 9

Requested Information

guidelines. Also, if divestiture of all or any portion of
any bank or nonbanking company constitutes part of the
proposal, discuss in detail the specifics and timing of
such divestiture.
Item 11
If the proposal involves the acquisition of nonbank
operations under section 4(c)(8) of the Bank Holding
Company Act, a Form FR Y-4 should be submitted in
connection with FR Y-3F filing. At a minimum, the
information related to the nonbank operations should
include the following:
1. A description of the proposed activity(ies);
2. The name and location of Applicant’s and Bank’s
direct or indirect subsidiaries that engage in the proposed activity(ies);
3. Identification of the geographic and product markets
in which competition would be affected by the
proposal;

If any services or products will be discontinued,
describe and explain the reasons.
2. Discuss the programs, products, and activities of the
depository subsidiaries of the Applicant or the target
Bank that will meet the existing or anticipated needs
of its community(ies) under the applicable criteria
of the Community Reinvestment Act (CRA) regulation, including the needs of low- and moderateincome geographies and individuals. For a subsidiary
of the Applicant or Target Bank that has received
a CRA composite rating of ‘‘needs to improve’’
or ‘‘substantial noncompliance’’ institution-wide or,
where applicable, in a state or multi-state MSA, or
has received an evaluation of less that satisfactory
performance in an MSA or in the non-MSA portion of
a state in which the applicant is expanding as a result
of the transaction, describe the specific actions, if any,
that have been taken to address the deficiencies in
the institution’s CRA performance record since the
rating.

4. A description of the effect of the proposal on the
competition in the relevant markets; and

VII. Other Matters

5. A list of major competitors in each affected market.

Item 14

In addition, the applicant should identify any other nonbank operations to be acquired, with brief descriptions of
the activities provided.

1. For a foreign organization seeking initial entry:

Item 12
In an application in which any principal of Applicant or
Bank/Bank Holding Company is also a principal of any
other insured U.S. depository institution or depository
institution holding company, give the name and location
of each office of such other institution that is located
within the relevant banking market of Bank/Bank Holding Company, and give the approximate road miles by
the most accessible and traveled route between those
offices and each of the offices of Bank/Bank Holding
Company.

List all jurisdictions (in addition to the home country)
in which Applicant has material operations.7 For each
such jurisdiction, describe any secrecy laws or other
impediments that would restrict the ability of Applicant or its ultimate parent, if any, from providing
information on the operations or activities of Applicant and any of its affiliates that the Board deems
necessary to determine and enforce compliance with
the International Banking Act, the BHCA, and other
applicable federal laws. If any material impediments
exist, discuss the manner in which Applicant and its
ultimate parent, if any, propose to provide the Board
with adequate assurances of access to information.
2. For a foreign organization that has previously been
approved to acquire a U.S. bank or to establish a U.S.
branch or agency:

Item 13
1. Describe how the proposal will meet the convenience
and needs of the target Bank’s community(ies). List
any significant changes in services or products that
will result from the consummation of the transaction.
Page 10

7. Material operations exist in any jurisdiction in which the direct and
indirect activities in that jurisdiction, in the aggregate, account for 5 percent or more of the consolidated, worldwide assets of the foreign bank or
its ultimate parent.
FR Y-3F
September 2005

Requested Information

Indicate whether there have been any changes to the
list of jurisdictions in which foreign bank has material
operations since such information was previously provided to the Federal Reserve. For any additional such
jurisdiction, describe any secrecy laws or other impediments that would restrict the ability of Applicant
or its ultimate parent, if any, to provide information
on the operations or activities of Applicant and any of
its affiliates that the Federal Reserve deems necessary
to determine and enforce compliance with the International Banking Act, the BHCA, and other applicable
federal laws. If such impediments exist, discuss the
manner in which Applicant and its ultimate parent,
if any, propose to provide the Federal Reserve with
adequate assurance of access to such information.
Item 15
State whether Applicant(s), upon consummation of the
subject proposal, would be a qualifying foreign banking
organization as defined in Section 211.23(a) of Regulation K, and provide the necessary information to support
such a determination. In tiered organizations, if a foreign bank Applicant meets the requirements of section 211.23(a) but the ultimate parent Applicant does not,
then indicate whether the ultimate parent Applicant
would satisfy the requirements set forth in section 211.23(c) of Regulation K, and provide the necessary information to support that determination. To the
extent the information requested in this item has been
provided in other report forms (FR Y-7) filed with the
Federal Reserve, Applicant(s) may include such information by reference to those filings.
Item 16
If Applicant’s home country maintains capital export
controls, discuss in detail the limitations such controls
would place on Applicant’s ability to serve as a source of
strength for its United States banking interests.
Item 17
If Applicant itself, or any company (banking and nonbanking) in which it will have direct or indirect ownership or control of more than 5 percent of the voting
shares, will engage directly or indirectly at the time of
consummation of this proposal in any nonbanking activities in the United States, provide the following:
FR Y-3F
September 2005

1. Name, location, and a detailed description of all the
activities for each company (or Applicant itself);
2. The state(s) or geographical areas in which each
nonbanking activity will be performed; and
3. The specific section and paragraph of the Act or of
Regulation K or Regulation Y that Applicant believes
provides authority for acquisition or retention of each
U.S. nonbanking activity and a description that demonstrates that each activity will be conducted consistent with the Board’s regulations and related interpretations. If Applicant has relied on the nonbanking
exemptions afforded by Section 2(h) and 4(c)(9) of
the Act (as implemented by Section 211.23 of Regulation K) for certain activities, provide the necessary
information to support such a determination.
To the extent the information requested Item 17 has been
provided to the Federal Reserve in other report forms
(Form FR Y-7 or FR Y-10F), Applicant may include
such information by reference to those filings.
Item 18
Applicant and its ultimate parent, if any, should provide
(jointly or separately) the following commitments
(including all footnotes) through an officer that is authorized to bind the entity making the commitment.
1. Assurances Commitment. Each of [name of applicant]
(‘‘Bank’’), a bank organized under the laws of [home
country], and [name of ultimate parent] (‘‘Parent’’), a
[company/bank] organized under the laws of [home
country], will make available to the Board of Governors of the Federal Reserve System (‘‘Board’’) such
information on the operations of Bank and any affiliate 8 of Bank that the Board deems necessary to determine and enforce compliance with the Bank Holding
Company Act, the International Banking Act, and
other applicable federal law, provided that if the disclosure of such information is prohibited by law or
otherwise, Bank and Parent will cooperate with the
Board including, without limitation, by seeking to
obtain timely waivers of or exemptions from any
applicable confidentiality or secrecy restrictions or
requirements in order to enable Bank or Parent to
make any such information available to the Board.
8. An ‘‘affiliate’’ of a foreign bank or a parent of a foreign bank is any
company that controls, is controlled by, or is under common control with,
the foreign bank or the parent of the foreign bank. See 12 C.F.R. § 211.21.

Page 11

Requested Information

Bank and Parent agree that this commitment is
deemed to be a condition imposed in writing in connection with the Board’s findings and decision on
(insert information describing the application) and, as
such, may be enforced in proceedings under applicable law.

Each of Bank and Parent designates [name and
address] as its registered agent to receive service of
process on Bank or Parent in connection with such
action. Bank and Parent agree to maintain a registered
agent in the United States and to notify the Board of
any change in the designated registered agent.

2. Consent To Jurisdiction. Each of [name of applicant]
(‘‘Bank’’), a bank organized under the laws of [home
country], and [name of ultimate parent] (‘‘Parent’’), a
[company/bank] organized under the laws of [home
country], consents to the jurisdiction of the federal
courts of the United States and of all United States
governmental agencies, departments and divisions for
purposes of any and all claims made by, proceedings
initiated by, or obligations to, the United States, the
Board of Governors of the Federal Reserve System
(‘‘Board’’), and any other United States governmental
agency, department or division, in any matter arising
under U.S. Banking Law.9

Bank and Parent agree that this commitment is
deemed to be a condition imposed in writing in connection with the Board’s findings and decision on
(insert information describing the application) and, as
such, may be enforced in proceedings under applicable law.

9. For purposes of this commitment, ‘‘U.S. Banking Law’’ means:
1. all federal and state statutes, rules, and regulations that the Board,
the Office of the Comptroller of the Currency (the ‘‘OCC’’), the
Federal Deposit Insurance Corporation (the ‘‘FDIC’’), or any
other federal banking agency or department (individually, a ‘‘Federal Banking Authority’’ and collectively, the ‘‘Federal Banking
Authorities’’) administers or for which such Federal Banking
Authority has rulemaking or enforcement authority, including
without limitation, all provisions of Title 12, United States Code,
as from time to time may be applicable to [Bank], its subsidiaries
and affiliates, and any institution-affiliated party (as defined in
section 3(u) of the Federal Deposit Insurance Act (an ‘‘IAP’’)) of
each thereof;
2. all federal criminal laws of which violation(s) arise(s):

Page 12

a. from the applicability of any provision of a U.S. Banking Law,
or
b. under Section 1001 of Title 18 of the United States Code as
it relates to information, statements, omissions, writings, or
reports to a Federal Banking Authority, or
c. under Sections 1004 through 1007 of Title 18 of the United
States Code, or any other provisions of Title 18 of the United
States Code applicable to the ownership, control, operations or
activities of a bank, bank holding company, or subsidiary
thereof, to the operations or activities of a foreign bank or a
branch or agency of a foreign bank, or to the activities of any
IAP with respect to such bank, bank holding company, or
subsidiary, or branch or agency, or
d. the Bank Secrecy Act, or the Currency and Foreign Transactions Reporting Act; and,
3. any order issued or written agreement entered into by any Federal
Banking Authority or an administrative law judge acting under
authority delegated by any Federal Banking Authority or federal
court of competent jurisdiction pursuant to a U.S. Banking Law
against or with one or more of [Bank or Parent], any subsidiary or
affiliate, any IAP, or any branch or agency.

FR Y-3F
September 2005