Institutions without covered transactions

GENERAL INSTRUCTIONS FOR PREPARATION OF

The Bank Holding Company Report of
of Insured Depository Institutions’ Section
23A Transactions with Affiliates
(FR Y-8)

DRAFT
Who Must Report
The Bank Holding Company Report of Insured Depository Institutions’ Section 23A Transactions with Affiliates (FR Y-8) must be filed by all top-tier bank holding companies (BHCs), including financial holding
companies (FHCs), as of the last calendar day of the
quarter. The reporting holding company must provide
the requested information on this report for each insured
depository institution that it controls. A separate FR Y-8
report form should be filed for each insured depository institution regardless of whether the insured
depository institution has section 23A transactions
with affiliates. All transactions that insured depository
institutions have with affiliates (see glossary) are reported
at the insured depository institution level.
For purposes of this report, an insured depository institution includes any state bank, national bank, trust company, or banking association and any institution that
takes deposits that are insured by the Federal Deposit
Insurance Corporation, including savings associations.
An insured depository institution does not include the
insured branches and agencies of a foreign bank. For
purposes of this report, transactions between a subsidiary
of an insured depository institution and an affiliate are
included as part of the insured depository institution’s
FR Y-8 report. The only subsidiaries excluded from this
treatment are financial subsidiaries, insured depository
institution subsidiaries, and certain ESOPs and joint
venture subsidiaries (as defined in the attached glossary)—
companies that are deemed affiliates of the insured
depository institution. A holding company should only
include information for insured depository institutions
and their subsidiaries that are part of the holding company’s organizational structure as of the last calendar day of
the quarter for which the report is being filed.
All qualified foreign banking organizations that own a
U.S. subsidiary bank also must file this report. However,
Instructions for Preparation of Reporting Form FR Y-8
General Instructions June 2009

in the case of a multi-tiered foreign banking organization,
if there is a domestic BHC that is a subsidiary of the
foreign banking organization, the domestic BHC must
file the FR Y-8 for each insured depository institution
that is owned directly or indirectly by the domestic BHC.
The foreign banking organization must file this report
only for a U.S. subsidiary bank that it owns directly.

Where to Submit the Reports
The reports are to be submitted for each report date on
the report forms provided by the Federal Reserve Bank
where the holding company’s Consolidated Financial
Statements (FR Y-9C) or Parent Company Only Financial Statements (FR Y-9SP) or Annual Report of Foreign
Banking Organizations (FR Y-7) is submitted, regardless
of the location of the insured depository institution.

Electronic Submission
All bank holding companies must submit their completed
FR Y-8 reports electronically. Bank holding companies
should contact their district Reserve Bank or go to
www.reportingandreserves.org for procedures for electronic submission.

When to Submit the Reports
The Bank Holding Company Report of Insured Depository Institutions’ Section 23A Transactions with Affıliates
(FR Y-8) is required to be submitted as of March 31,
June 30, September 30 and December 31.
The submission date for a bank holding company to file
this report for each insured depository institution is 30
calendar days after the report date. Any holding company
that controls an insured depository institution that has
more than one foreign office, other than a ‘‘shell’’ branch
or an International Banking Facility, may take an additional fifteen days to submit the report.
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General Instructions

The term ‘‘submission date’’ is defined as the date by
which the Federal Reserve must receive the bank holding
company’s FR Y-8 report.
If the submission deadline falls on a weekend or holiday,
the report must be received on the first business day after
the Saturday, Sunday, or holiday. Earlier submission aids
the Federal Reserve in reviewing and processing the
reports and is encouraged. No extensions of time for
submitting reports are granted.
The report is due by the end of the reporting day on the
submission date (5:00 p.m. at each district Reserve
Bank).

How to Prepare the Reports
A. Applicability of GAAP
Holding companies are required to prepare the FR Y-8
in accordance with generally accepted accounting principles (GAAP) and with these instructions. All reports
shall be reported in a consistent manner.
Holding companies should refer to the glossary of this
report, Regulation W, 12 CFR Part 223 and section 23A of the Federal Reserve Act for additional
information on the items requested on this report. A
copy of the FR Y-8 form and instructions may be
found on the Federal Reserve Board’s public website
(www.federalreserve.gov/boarddocs/reportforms).
Also, a copy of Regulation W may be found on
the Federal Reserve Board’s public website
(www.federalreserve.gov/regulations).

B. Instructional Detail
Legal Name of the Insured Depository
Institution
When specifying the name of the insured depository
institution for which the FR Y-8 is being filed, use the
legal name as it appears on the papers of incorporation
or formation documents. The legal name must be the
same name that is specified on the Report of Changes in
Organizational Structure (FR Y-10), or the Report of
Changes in FBO Organizational Structure (FR Y-10F).

Cover Page
The cover page of the report must include the legal name
of the holding company filing the FR Y-8 and the mailing
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address. The name and telephone number of a contact at
the holding company to whom questions about the
report(s) may be directed must be indicated.

Report Form Captions
No caption on the report form shall be changed in any
way. An insured depository institution that did not engage
in any covered or derivative transactions with affiliates
and does not control any financial subsidiaries as attested
to on page 1, the declaration page, does not need to report
any data on this report. For all other respondents, an entry
(i.e., an amount or a zero) must be made for items 1 and 2
unless the reporting institution has checked the first box
on page 2 indicating that the insured depository institution has covered transactions with financial subsidiaries
only. An entry (i.e., an amount or a zero) must be made
for items 3 through 7 unless the reporting institution has
checked the second box on page 2 indicating that the
insured depository institution does not control financial
subsidiaries. For all respondents, except those meeting
the requirements to submit the declaration page only, an
entry (i.e., an amount or a zero) must be made for
Memorandum item 1.

C. Rounding
All dollar amounts must be reported in thousands of
dollars, with the figures rounded to the nearest thousand.
Items less than $500 should be reported as zero.

D. Confidentiality
The Federal Reserve System regards the individual
insured depository institution information provided by
each respondent as confidential. If it should be determined subsequently that any information collected on
this form must be released, respondents will be notified.

E. Signatures
The FR Y-8 must be signed at the places and in the
manner indicated on the cover sheet by an authorized
officer of the holding company. The declaration page
must be signed by an officer for the insured depository
institution meeting the criteria to be exempt from reporting any data on the report form.
Bank holding companies choosing to submit these reports
electronically must maintain in their files a manually
signed and attested printout of the data submitted. Bank
Instructions for Preparation of Reporting Form FR Y-8
General Instructions June 2009

General Instructions

holding companies with an insured depository institution
that meets the exemption criteria on page 1 of the report
form, the declaration page, must maintain in their files a
manually signed copy of the declaration page. The cover
page of the Reserve Bank—supplied report form should
be used to fulfill the signature and attestation requirement
and this page should be attached it to the data printout or
declaration page placed in the bank holding company’s
files.

G. Additional Information

F. Declaration Page

H. Amended Reports

If the individual reporting depository institution did not
have any covered transactions (including derivative transactions) with affiliates and does not control any financial
subsidiaries, it need not enter any data on the report.

The Federal Reserve may require the filing of amended
Bank Holding Company Report of Insured Depository
Institutions’ Section 23A Transactions with Affiliates if
reports as previously submitted contain significant errors.

Instructions for Preparation of Reporting Form FR Y-8
General Instructions June 2009

The Federal Reserve System reserves the right to require
additional information from the insured depository institution through the holding company if the FR Y-8 is not
sufficient to determine compliance with applicable laws
and regulations.

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LINE ITEM INSTRUCTIONS FOR

The Bank Holding Company Report of Insured
Depository Institutions’ Section 23A
Transactions with Affiliates

General Instructions
This report collects information on covered transactions
between an insured depository institution and its affiliates
that are subject to section 23A of the Federal Reserve
Act, 12 U.S.C. 371c, including derivative transactions
between an insured depository institution and its affiliates. Affiliates and covered transactions are briefly
described below. Please refer to the glossary of this
report, Regulation W, 12 CFR Part 223 and section 23A of the Federal Reserve Act for additional
information.

Affiliate
An affiliate of an insured depository institution includes a
company that controls the insured depository institution,
a company under common control with the insured
depository institution, a company with a majority interlocking directorate with the insured depository institution, a company that is sponsored and advised by the
insured depository institution, certain other investment
companies advised by the insured depository institution,
an insured depository institution subsidiary, a financial
subsidiary, and certain ESOP and joint venture subsidiaries. An operating subsidiary of an insured depository
institution is treated as part of the insured depository
institution itself and is not an affiliate. See the glossary
for a complete description of entities that are and are not
considered affiliates.

(3) a purchase of assets from an affiliate, including an
asset subject to repurchase;
(4) the acceptance of securities issued by an affiliate as
collateral for an extension of credit to any person or
company; and
(5) the issuance of a guarantee, acceptance, or letter of
credit on behalf of an affiliate.
An insured depository institution’s purchase of debt
securities issued by an affiliate is an extension of credit
and, unless purchased from a nonaffiliate in a bona fide
secondary market transaction, must be collateralized.
In general, a credit exposure arising from a derivative
transaction between an insured depository institution and
its affiliates is not subject to the quantitative limits and
collateral requirements of section 23A. However, a credit
derivative between an insured depository institution and
a nonaffiliate in which the insured depository institution
protects the nonaffiliate from a default on, or decline in
value of, an obligation of an affiliate of the insured
depository institution is a guarantee by the insured
depository institution on behalf of an affiliate and is
covered under section 23A.
In addition, intraday extensions of credit that meet the
requirements of 12 CFR 223.42(1) are not subject to the
quantitative limits and collateral requirements of section 23A and should not be reported.

Only covered transactions between an insured depository
institution and its affiliates are subject to section 23A.
Covered transactions include the following transactions:

Additional information on covered transactions that are
exempt from the quantitative limits or collateral requirements of section 23A can be found in the glossary of this
report, Regulation W, and section 23A of the Federal
Reserve Act. Covered transactions that are exempt should
not be included in this report.

(1) a loan or extension of credit to an affiliate;

Limits on Covered Transactions

(2) a purchase of, or investment in, securities issued by
an affiliate;

Section 23A limits the aggregate amount of covered
transactions between an insured depository institution

Covered Transactions

Instructions for Preparation of Reporting Form FR Y-8
Line Item Instructions June 2009

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Line Item Instructions

and any single affiliate (other than a financial subsidiary)
to no more than 10 percent of the insured depository
institution’s capital stock and surplus (as defined in the
glossary), and the aggregate amount of covered transactions with all affiliates (including financial subsidiaries)
to no more than 20 percent of the insured depository
institution’s capital stock and surplus. An insured depository institution may engage in covered transactions with
a single financial subsidiary up to 20 percent of the
insured depository institution’s capital stock and surplus
(as defined in the glossary).
The maximum aggregate amount for all covered transactions on any single day that are subject to 23A limits is
reported in Memorandum item 1.
Covered Transactions Subject to Section 23A
Collateral Requirements
Section 23A also requires that certain covered transactions between an insured depository institution and its
affiliates meet statutorily defined collateral requirements.
The types of covered transactions subject to the collateral
requirements are the following:
(1) (1) a loan or extension of credit to an affiliate; and
(2) a guarantee, acceptance, or letter of credit (including
an endorsement or standby letter of credit) issued on
behalf of an affiliate (including a credit derivative).
Covered Transactions Not Subject to Section 23A
Collateral Requirements
Covered transactions not subject to section 23A collateral
requirements include the following transactions:
(1) the purchase of, or investment in, securities issued by
an affiliate;
(2) the purchase of assets, including assets subject to an
agreement to repurchase, from an affiliate; and
(3) the acceptance of securities issued by an affiliate as
collateral security for a loan or extension of credit to
any person or company.
Note: In general, covered transactions must be reported
for as long as the transactions remain on the insured
depository institution’s books. See Regulation W for
additional information on the valuation of different transactions 12 CFR 223.21–223.24.
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Declaration Page Instructions
An insured depository institution that does not have any
covered transactions, did not engage in any derivative
transactions with affiliates and does not control any
financial subsidiaries (see glossary), should sign the
declaration page (page 1 of the report form) attesting to
these facts and submit the report each quarter with the
cover page. If the insured depository institution meets all
of the criteria on the declaration page, it need not enter
any data on page 2 or page 3 of the report form.

Line Item Instructions for Part I
Part I must be completed by all BHCs (including FHCs)
for each insured depository institution that has covered
transactions with affiliates or that controls a financial
subsidiary.
An insured depository institution that has covered transactions with financial subsidiaries only should check the
first box on page 2 of the report form and not complete
items 1 and 2.
Line items 1 and 2 below are to be reported by all BHCs
for each insured depository institution that has covered
transactions with affiliates other than financial subsidiaries.
An insured depository institution that does not control
any financial subsidiaries should check the second box on
page 2 of the report form and not complete items 3
through 7.
Line items 3 through 7 below are to be reported by all
BHCs with an insured depository institution that controls
a financial subsidiary.
All BHCs must complete Memorandum item 1.
Respondents should report in column A the outstanding
aggregate amount of covered transactions as of the report
date. Respondents should report in column B the maximum aggregate amount during the calendar quarter ending with the report date. Respondents should determine
an end of day total (each day) for the category of covered
transactions specified in each line item and report in
column B only the largest end of day total (i.e., a single
day amount) during the quarter.
Instructions for Preparation of Reporting Form FR Y-8
Line Item Instructions June 2009

Line Item Instructions

Line Item 1 Covered transactions subject to
section 23A collateral requirements. (Exclude
transactions between the insured depository
institution and financial subsidiaries.)
Report in column A the outstanding aggregate amount
of covered transactions that are subject to section 23A
collateral requirements that the insured depository institution (as defined in the glossary) had with its affiliates
as of the report date. Report in column B the maximum
aggregate amount of such transactions during the calendar quarter ending with the report date. Exclude transactions between the insured depository institution and its
financial subsidiaries or financial subsidiaries of an affiliated insured depository institution.
A line of credit that is extended to an affiliate is an
extension of credit. Any portion of the line of credit that
is used (drawn down) must be secured and reported in
this item. Any portion of a line of credit that is unused
(undrawn) is not subject to section 23A collateral
requirements if the insured depository institution does
not have a legal obligation to advance additional funds
until the collateral is provided and is reported in item 2 as
a covered transaction.
Line Item 2 Covered transactions not subject
to section 23A collateral requirements. (Exclude
transactions between the insured depository
institution and financial subsidiaries.)
Report in column A the outstanding aggregate amount of
covered transactions that are not subject to section 23A
collateral requirements that the insured depository institution (as defined in the glossary) had with its affiliates as
of the report date. Report in column B the maximum
aggregate amount of such transactions during the calendar quarter ending with the report date. Include in this
item the unused (undrawn) portion of an extension of
credit that is not subject to section 23A collateral requirements. Exclude transactions between the insured depository institution and its financial subsidiaries or financial
subsidiaries of an affiliated insured depository institution.
Line Item 3 Covered transactions between
the insured depository institution and financial
subsidiaries subject to section 23A collateral
requirements.
Report in column A the outstanding aggregate amount
of covered transactions that are subject to section 23A
Instructions for Preparation of Reporting Form FR Y-8
Line Item Instructions June 2009

collateral requirements that the insured depository institution had with its financial subsidiaries or financial
subsidiaries of an affiliated insured depository institution
as of the report date. Report in column B the maximum
aggregate amount of such transactions during the calendar quarter ending with the report date. An extension of
credit to a financial subsidiary of an insured depository
institution by an affiliate of the insured depository institution is treated as an extension of credit by the insured
depository institution if the extension of credit is treated
as regulatory capital of the financial subsidiary. Include
in this item the used (drawn down) portion of an extension of credit that is subject to section 23A collateral
limits. Do not include in this item the unused (undrawn)
portion of an extension of credit that is not subject to
section 23A collateral requirements. Unused (undrawn)
portions should be reported in item 4. Exclude transactions reported in item 1 above and in items 5 and 6 below.
Line Item 4 Covered transactions between
the insured depository institution and financial
subsidiaries not subject to section 23A collateral
requirements.
Report in column A the outstanding aggregate amount of
covered transactions that are not subject to section 23A
collateral requirements that the insured depository institution had with its financial subsidiaries or financial
subsidiaries of an affiliated insured depository institution
as of the report date. Report in column B the maximum
aggregate amount of such transactions during the calendar quarter ending with the report date. Include in this
item the unused (undrawn) portion of an extension of
credit that is not subject to section 23A collateral requirements. Exclude transactions reported in item 2 above and
in items 5 and 6 below.
Line Item 5 Purchase of, or investment in, the
securities issued by financial subsidiaries of the
insured depository institution by the insured
depository institution.
Line Item 5(a)

Equity securities.

Report in column A the outstanding amount of the
purchase of, or investment in, equity securities issued by
financial subsidiaries of the insured depository institution
or financial subsidiaries of affiliated insured depository
institutions by the insured depository institution as of the
report date. Certain retained earnings of the financial
subsidiaries should be excluded when calculating the
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Line Item Instructions

insured depository institution’s investment in or purchase
of equity securities issued by financial subsidiaries
(Please refer to 12 CFR 223.32(b) for additional information.) Exclude transactions reported in items 1, 2, 3, and 4
above.
Line Item 5(b) Debt securities.
Report in column A the outstanding amount of the
purchase of, or investment in, debt securities issued by
financial subsidiaries of the insured depository institution
or financial subsidiaries of affiliated insured depository
institutions by the insured depository institution as of the
report date. Exclude transactions reported in items 1, 2, 3,
4, and 5(a) above.
Line Item 6 Purchase of, or investment in, the
securities issued by financial subsidiaries of the
insured depository institution by the affiliates
of the insured depository institution.
Line Item 6(a) Equity securities.
Report in column A the outstanding amount of the
purchase of, or investment in, equity securities issued by
the financial subsidiaries of the insured depository institution or financial subsidiaries of affiliated insured depository institutions by the affiliates of the insured depository
institution, including affiliated insured depository institutions, as of the report date. Certain retained earnings of
the financial subsidiaries should be excluded when calculating the affiliates’ investment in or purchase of equity
securities issued by the financial subsidiaries. (Please
refer to 12 CFR 223.32(b) for additional information.)
Exclude transactions reported in items 1, 2, 3, and 4
above.
Line Item 6(b) Debt securities.
Report in column A the outstanding amount of the
purchase of, or investment in, debt securities issued by
the financial subsidiaries of the insured depository institution or financial subsidiaries of affiliated insured depository institutions by the affiliates of the insured depository
institution, including affiliated insured depository institutions, as of the report date. Exclude transactions reported
in items 1, 2, 3, 4, and 6(a) above.

depository institution to financial subsidiaries of the
insured depository institution that are not subject to
section 23A. Report in column B the maximum aggregate amount of such transactions during the calendar
quarter ending with the report date. These extensions of
credit are not included in the insured depository institution’s quantitative and collateral limits under section 23A
but should be reported. Exclude from this item any
extension of credit to a financial subsidiary of an insured
depository institution by an affiliate of the insured depository institution that is treated as regulatory capital of the
financial subsidiary. Such a transaction is treated as an
extension of credit by the insured depository institution
to the financial subsidiary and should be reported in
item 3 above.
Memorandum
Line Item M1 Maximum aggregate amount of all
covered transactions included in items 1 through 6
for any single day during the calendar quarter.
Report the maximum aggregate (largest total end of the
day) amount of all covered transactions included in items
1 through 6 for any single day during the quarter. Do not
include transactions reported in item 7 above. Respondents should determine an end of day total for all covered
transactions and report only the largest end of day total
(i.e., a single day amount) during the quarter.

Line Item Instructions for Part II
Part II must be completed by all BHCs, including FHCs,
for each insured depository institution that has engaged
in derivative transactions with affiliates, including financial subsidiaries. Amounts reported in Part II are as of the
report date. Note: A credit derivative between an insured
depository institution and a nonaffiliate in which the
insured depository institution protects the nonaffiliate
from default on, or decline in value of, an obligation of
an affiliate of the insured depository institution is not
reported in this part of the report. Such credit derivatives
are covered transactions under section 23A and should be
reported in Part I.

Line Item 7 Loans or other extensions of credit
by affiliates of the insured depository institution
to financial subsidiaries of the insured depository
institution (not subject to section 23A).

Line Item 1 Positive fair value of derivative
contracts between the insured depository institution
and its affiliates.

Report in column A the outstanding amount of loans
or other extensions of credit by affiliates of the insured

Report the positive fair value of all derivative contracts
held by the insured depository institution where an

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Instructions for Preparation of Reporting Form FR Y-8
Line Item Instructions June 2009

Line Item Instructions

affiliate is the counterparty. Derivative contracts executed
with the same counterparty that meet the criteria for a
valid right of setoff contained in FASB Interpretation No.
39 (e.g., those contracts subject to a qualifying master
netting arrangement) may be reported on a net basis. Fair
value is the amount at which an asset (liability) could be
bought (incurred) or sold (settled) in a current transaction
between willing parties, that is, other than in a forced or
liquidation sale. This value represents the marked-tomarket value at the end of each trading day and serves as
the reference point for counterparties maintaining the
collateral margin held by the party with a positive fair
value.
Line Item 2 Amount of collateral pledged to the
insured depository institution to secure derivative
contracts between the insured depository institution
and its affiliates.

tracts between the insured depository institution and its
affiliates. The collateral, which is typically in the form of
liquid assets (e.g., cash or U.S. Treasuries), is typically
maintained against the marked-to-market value of the
transaction and adjusted, based on other than minor
changes in value.

Line Item 3 Notional amount of derivative
contracts between the insured depository institution
and its affiliates.
Report the total gross notional amount of derivative
contracts between the insured depository institution and
its affiliates. This should equal the total notional value of
those derivative contracts with positive and negative fair
values.

Report the market value of collateral pledged to the
insured depository institution to secure derivative con-

Instructions for Preparation of Reporting Form FR Y-8
Line Item Instructions June 2009

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Glossary

Note: Additional information on the terms defined below
is available in section 23A of the Federal Reserve Act,
12 U.S.C. 371c, and Regulation W, 12 CFR Part 223.
Affiliate:
Affiliate includes—
(1) any company that controls the insured depository
institution. Example: a BHC or a foreign banking
organization;
(2) an insured depository institution that is a subsidiary
of the insured depository institution;
(3) any company that is controlled by the company that
controls the insured depository institution. Example: the domestic and foreign nonbanking subsidiaries of a BHC;
(4) any company that is controlled directly or indirectly, by a trust or otherwise, by or for the benefit
of shareholders who beneficially or otherwise control, directly or indirectly, by trust or otherwise, the
insured depository institution or any company that
controls the insured depository institution. Example: a car dealership that is controlled by a shareholder or shareholders that controls a bank holding
company;
(5) any company in which a majority of its directors,
trustees, or general partners (or individuals exercising similar functions) constitute a majority of the
persons holding any such office with the insured
depository institution or any company that controls
the insured depository institution;
(6) any company, including a real estate investment
trust (REIT), that is sponsored and advised on a
contractual basis by the insured depository institution or any subsidiary or affiliate of the insured
depository institution;
FR Y-8
Glossary

June 2009

(7) any investment company with respect to which
the insured depository institution or any affiliate
thereof is an investment advisor as defined in
section 2(a)(20) of the Investment Company Act
of 1940. Example: a mutual fund;
(8) any other investment fund for which the insured
depository institution or any affiliate of the insured
depository institution serves as an investment advisor, if the insured depository institution and its
affiliates own or control in the aggregate more than
5 percent of any class of voting securities or of the
equity capital of the fund;
(9) a financial subsidiary (and its subsidiaries) of the
insured depository institution;
(10) any company held under merchant banking or
insurance company investment authority in which a
bank holding company of the insured depository
institution owns or controls, directly or indirectly,
or acting through one or more other persons, 15 percent or more of the equity capital pursuant to
section 4(k)(4)(H) or (I) of the Bank Holding
Company Act, unless exempt under 12 CFR 223.2
(a)(9)(ii);
(11) any partnership for which the insured depository
institution or any affiliate of the insured depository
institution serves as a general partner or for which
the insured depository institution or any affiliate of
the insured depository institution causes any director, officer, or employee of the insured depository
institution or affiliate to serve as a general partner;
(12) any subsidiary of a company described in 1 through
11 above; and
(13) any company that the Board or the appropriate
Federal banking agency for the insured depository
intitution determines to be an affiliate.
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Glossary

Notwithstanding the above, affiliate with respect to an
insured depository institution does not include—
(1) any company that is a subsidiary of the insured
depository institution, unless the company is:
(a) an insured depository institution;
(b) a financial subsidiary;
(c) directly controlled by:
(i) one or more affiliates (other than depository
institution affiliates) of the insured depository institution; or
(ii) a shareholder that controls the insured
depository institution or a group of shareholders that together control the insured
depository institution;
(d) an employee stock option plan (ESOP), trust, or
similar organization that exists for the benefit of
the shareholders, partners, members, or employees of the insured depository institution or any of
its affiliates;
(1) a company engaged solely in holding the premises
of the insured depository institution;
(2) a company engaged solely in conducting a safe
deposit business;
(3) any company engaged solely in holding obligations
of the United States or its agencies or obligations
fully guaranteed by the United States or its agencies;
and
(4) any company where control results from the exercise
of rights arising from a debt previously contracted
(DPC).
Capital Stock and Surplus: For purposes of this report,
capital stock and surplus is defined as the sum of
(1) Tier 1 and Tier 2 capital included in an insured
depository institution’s risk-based capital under the
capital guidelines of the appropriate Federal banking
agency, based on the institution’s most recent consolidated Report of Condition and Income filed under
12 U.S.C. 1817(a)(3);
(2) the balance of an insured depository institution’s
allowance for loan and lease losses not included in its
Tier 2 capital for purposes of the calculation of
risk-based capital by the appropriate Federal banking
GL-2

agency, based on the institution’s most recent consolidated Report of Condition and Income filed under
12 U.S.C. 1817(a)(3); and
(3) the amount of any investment by an insured depository institution in a financial subsidiary that counts as
a covered transaction and is required to be deducted
from the insured depository institution’s capital for
regulatory capital purposes.
Control: A company or shareholder shall be deemed to
have control over another company if—
(1) such company or shareholder, directly or indirectly,
or acting through one or more other persons, owns,
controls, or has power to vote 25 percent or more of
any class of voting securities of the other company;
(2) such company or shareholder controls in any manner
the election of a majority of the directors, trustees, or
general partners (or individuals exercising similar
functions) of the other company;
(3) the Board has determined that such company or
shareholder exercises a controlling influence over the
company;
(4) such company or shareholder owns or controls
25 percent or more of the equity capital of the other
company, unless the company or shareholder presents information to the Board that demonstrates, to
the Board’s satisfaction, that the company or shareholder does not control the other company; or
(5) notwithstanding any other provision of this definition, no company shall be deemed to own or control
another company by virtue of its ownership or control of shares in a fiduciary capacity, except as provided in paragraphs (b)(1)(C) and (b)(3)(B) of section 23A.
Covered Transaction: A covered transaction with respect
to an affiliate of an insured depository institution
includes—
(1) a loan or extension of credit to the affiliate;
(2) the purchase of, or investment in, securities issued by
the affiliate;
(3) the purchase of assets, including assets subject to an
agreement to repurchase, from the affiliate, except
such purchases that are exempt by Board order or
regulation;
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(4) the acceptance of securities issued by the affiliate as
collateral security for a loan or extension of credit to
any person or company;
(5) the issuance of a guarantee, acceptance, or letter of
credit, including an endorsement or standby letter
of credit, on behalf of the affiliate, a confirmation of a
letter of credit issued by the affiliate, and a crossaffiliate netting arrangement;
(6) the purchase of, or investment in, securities issued by
a financial subsidiary of the insured depository institution by an affiliate of the insured depository institution;
(7) covered transactions with a third party if the proceeds
of the transaction are used for the benefit of, or transferred to, the affiliate. Example: if an individual
controls both an insured depository institution and a car dealership and a customer of the car
dealership obtains a loan from the insured depository
institution for the purpose of purchasing a car from
the dealership, the transaction is deemed to be a
covered transaction subject to section 23A because
the proceeds of the loan are transferred to and
directly benefit the affiliate.
(8) Exemptions: General purpose credit card transactions generally do not need to be reported as a
covered transaction unless 25 percent or more of the
total value of products and services purchased with
the card are from the affıliates of the insured depository institution. Certain riskless principal and agency
transactions also are exempt if the transactions meet
the criteria in 12 CFR 223.16; and
(9) any loan or extension of credit to a financial subsidiary of the insured depository institution by an affiliate
of the insured depository institution that the Board
determines to be a covered transaction for purposes
of section 23A.
Note: In general, covered transactions must be reported
as long as the transactions remains on the insured
depository institution’s books. For reporting purposes,
the value of the assets or securities should reflect (1) the
amortization or depreciation of the assets and (2) the
repayment or retirement of the loans or other extensions
of credit. See Regulation W for additional information.
The following covered transactions are exempt from the
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quantitative limits of section 23A and should not be
included on this report:
(1) any transaction with an insured depository
institution
(a) which controls 80 percent or more of the voting
shares of the insured depository institution;
(b) in which the insured depository institution controls 80 percent or more of the voting shares; or
(c) in which 80 percent or more of the voting shares
are controlled by the company that controls
80 percent or more of the voting shares of the
insured depository institution. Example: transactions between insured depository institutions
where a single BHC controls 80 percent of each
institution (‘‘sister bank transactions’’);
(2) making a deposit in an affiliated insured depository
institution or affiliated foreign bank that represents
an ongoing, working balance maintained in the
ordinary course of correspondent business;
(3) giving immediate credit to an affiliate for uncollected items received in the ordinary course of
business;
(4) making a loan or extension of credit to, or issuing
a guarantee, acceptance, or letter of credit on behalf
of, an affiliate that is and remains fully secured
by—
(a) obligations of the United States or its agencies;
(b) obligations fully guaranteed by the United States
or its agencies as to principal and interest; or
(c) a segregated, earmarked deposit account with the
insured depository institution for the sole purpose
of securing covered transactions;
(5) purchasing securities issued by any company of the
kinds described in section 4(c)(1) of the Bank
Holding Company Act of 1956, 12 U.S.C.
1843(c)(1);
(6) purchasing assets having a readily identifiable and
publicly available market quotation and purchased
at the market quotation;
(7) purchasing a security from a securities affiliate
pursuant to 12 CFR 223.42(f);
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(8) purchasing a municipal security from a securities
affiliate pursuant to 12 CFR 223.42(g);
(9) asset purchases by newly formed insured depository institutions pursuant to 12 CFR 223.42(i);
(10) purchasing loans on a nonrecourse basis from an
affiliated insured depository institution;
(11) purchasing from an affiliate a loan or extension of
credit that was originated by the insured depository
institution and sold to the affiliate subject to a
repurchase agreement or with recourse;
(12) internal corporate reorganizations pursuant to
12 CFR 223.41(d);
(13) any merger or consolidation between an insured
depository institution and an affiliated insured
depository institution or U.S. branch or agency of a
foreign bank, or any acquisition of assets or assumption of deposit liabilities by an insured depository
institution from an affiliated insured depository
institution or U.S. branch or agency of a foreign
bank, if the transaction has been approved by the
responsible Federal banking agency pursuant to the
Bank Merger Act (12 U.S.C. 1828(c));
(14) purchasing from an affiliate, on a nonrecourse
basis, an extension of credit, if:
(a) the extension of credit was originated by the
affiliate;
(b) the insured depository institution makes an independent evaluation of the creditworthiness of the
borrower before the affiliate makes or commits to
make the extension of credit;
(c) the insured depository institution commits to
purchase the extension of credit before the affiliate makes or commits to make the extension of
credit;
(d) the insured depository institution does not make a
blanket advance commitment to purchase extensions of credit from the affiliate;
(e) the dollar amount of the extension of credit, when
aggregated with the dollar amount of all other
extensions of credit purchased from the affiliate
during the preceding 12 calendar months by the
insured depository institution and its depository
institution affiliates, does not represent more than
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50 percent (or such lower percent as is imposed
by the insured depository institution’s appropriate Federal banking agency) of the dollar amount
of extensions of credit originated by the affiliate
during the preceding 12 calendar months;
(15) any transaction the Board has exempted by order or
regulation;
(16) intraday extensions of credit pursuant to 12 CFR
223.42(l); and
(17) riskless principal transactions pursuant to 12 CFR
223.42(m).
Derivative Transactions: ‘‘Derivative transaction’’ is
any derivative contract listed in sections III.E.1.a through
d of Appendix A to 12 CFR Part 225 and any similar
derivative contract, including a credit derivative contract.
For this report, credit exposure resulting from derivative
transactions is not subject to the quantitative and collateral requirements of section 23A so long as the insured
depository institution establishes and maintains policies
and procedures designed to manage the exposure. These
derivative transactions should be reported in Part II of
this report. However, a credit derivative between an
insured depository institution and a nonaffiliate in which
the insured depository institution provides credit protection to the nonaffiliate with respect to an obligation of an
affiliate of the insured depository institution is a guarantee by an insured depository institution on behalf of an
affiliate for purposes of this report and should be reported
in Part I of this report.
Equity Capital: Equity capital means –
(1) with respect to a corporation, preferred stock, common stock, capital surplus, retained earnings, and
accumulated other comprehensive income, less treasury stock, plus any other account that constitutes
equity of the corporation; and
(2) with respect to a partnership, limited liability company, or other company, equity accounts similar to
those described above.
Extension of credit: Extension of credit is the making or
renewal of a loan, the granting of a line of credit, or the
extending of credit in any manner whatsoever, including
on an intraday basis, to an affiliate. An extension of credit
to an affiliate includes, without limitation:
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(1) an advance to an affiliate by means of an overdraft,
cash item, or otherwise;
(2) a sale of Federal funds to an affiliate;
(3) a lease that is the functional equivalent of an extension of credit to an affiliate;
(4) an acquisition by purchase, discount, exchange, or
otherwise of a note or other obligation, including
commercial paper or other debt securities, of an
affiliate;
(5) any increase in the amount of, extension of the
maturity of, or adjustment to the interest rate term or
other material term of, an extension of credit to an
affiliate; and
(6) any other similar transaction as a result of which an
affiliate becomes obligated to pay money (or its
equivalent).
Financial subsidiary: A financial subsidiary is a subsidiary of a bank that:
(1) engages, directly or indirectly, in activities that
national banks are not permitted to engage in directly
or that are conducted under terms and conditions that
differ from those that govern the conduct of such
activities by national banks; and
(2) is not a subsidiary that a national bank is specifically
authorized to own or control by the express terms of
a Federal statute (other than 12 U.S.C. 24a) and not
by implication or interpretation.
Financial subsidiary does not include:
(1) a subsidiary of a bank engaged solely in the sale of
insurance as agent or broker;
(2) a subsidiary of a State bank (other than a subsidiary
described in section 46(a) of the Federal Deposit
Insurance Act (12 U.S.C. 1831 w(a))) that is considered a financial subsidiary solely because the subsidiary engages in one or more of the following activities:
(a) an activity that the State bank may engage in
directly under applicable Federal and State law
and that is conducted under the same terms and
conditions that govern the conduct of the activity
by the State bank; or
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(b) an activity that the subsidiary was authorized by
applicable Federal and State law to engage in
prior to December 12, 2002, and that was lawfully engaged in by the subsidiary on that date.
Insured Depository Institution: An insured depository
institution, for purposes of this report, includes any state
bank, national bank, trust company, or banking association and any institution the deposits of which are insured
by the Federal Deposit Insurance Corporation (‘‘FDIC’’),
including a savings association (but does not include
insured branches of a foreign bank). Uninsured trust
companies are not required to complete this report. For
purposes of this report, an insured depository institution
should include transactions that all of its subsidiaries,
except financial subsidiaries and insured depository institution subsidiaries, have with affiliates. A separate FR Y-8
report must be completed for insured depository institutions that are subsidiaries of an insured depository institution.
Intraday Extension of Credit: An intraday extension of
credit is an extention of credit by an insured depository
institution to an affiliate that the insured depository
institution expects to be repaid, sold, or terminated, or to
qualify for a complete exemption under Regulation W, by
the end of its business day in the United States.
Operating Subsidiary: An operating subsidiary is any
company that is a subsidiary of an insured depository
institution, unless the company is an affilate (see definition of affiliate).
Purchase of Assets: The purchase of an asset by an
insured depository institution from an affiliate is the
acquisition by an insured depository institution of an
asset from an affiliate in exchange for cash or other
consideration, including an assumption of liabilities. An
insured depository institution’s acquistion of a security
issued by a company that was an affiliate of the insured
depository institution before the acquisition is treated as a
purchase of assets from an affiliate, if—
(1) as a result of the transaction, the company becomes
an operating subsidiary of the insured depository
institution; and
(2) the company has liabilities, or the insured depository
institution gives cash or any other consideration in
exchange for the security.
Securities: Securities are stocks, bonds, debentures,
notes, or other similar obligations.
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