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SECTION 265.20—Functions Delegated to Federal Reserve Banks

Except as otherwise provided in this section, each Federal Reserve Bank is authorized as to a member bank or other indicated organization for which the Reserve Bank is responsible for receiving applications or registration statements or to take other actions as indicated:

(a) Procedure.

(1) Member bank affiliate’s reports. To extend the time for good cause shown, within which an affiliate of a state member bank must file reports under section 9(17) of the Federal Reserve Act (12 U.S.C. 334).

(2) Edge corporation’s divestiture of stock. To extend the time in which an Edge Act corporation must divest itself of stock acquired in satisfaction of a debt previously contracted under section 25A(7) of the Federal Reserve Act (12 U.S.C. 615).

(3) Edge corporation’s corporate existence. To extend the period of corporate existence of an Edge corporation under section 25A(20) of the Federal Reserve Act (12 U.S.C. 628).

(4) Bank holding company and savings and loan holding company registration statement. To extend the time within which a bank holding company or savings and loan holding company must file a registration statement under section 5(a) of the Bank Holding Company Act (12 U.S.C. 1844(a)) or section 10(b) of the Home Owners’ Loan Act (12 U.S.C. 1467a(b)).

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(5) Bank holding company divestiture of nonbanking interests. To extend the time within which a bank holding company must divest itself of interests in nonbanking organizations under section 4(a) of the Bank Holding Company Act (12 U.S.C. 1843(a)).

(6) Bank holding company divestiture of DPC interests. To extend the time within which a bank holding company or any of its subsidiaries must divest itself of interests acquired in satisfaction of a debt previously contracted:

(i) Under section 4(c)(2) of the Bank Holding Company Act (12 U.S.C. 1843(c)(2)) or section 225.22(d)(1) of Regulation Y (12 CFR 225.22(d)(1)); or

(ii) Under sections 2(a)(5)(D) and 3(a) of the Bank Holding Company Act (12 U.S.C. 1841(a)(5)(D) and 1842(a)).

(7) Member bank’s surrender of Reserve Bank stock upon withdrawal from membership. To extend the time within which a member bank that has given notice of intention to withdraw from membership must surrender its Federal Reserve Bank stock and its certificate of membership under section 209.3(e) of Regulation H (12 CFR 209.3(e)).

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(8) Members bank’s reports of condition. To extend the time for publication of reports of condition under Regulation H (12 CFR part 208) for good cause shown.

(9) Bank holding company’s and savings and loan holding company’s annual reports. To grant to a bank holding company or savings and loan holding company a 90-day extension of time in which to file an annual report, and for good cause shown grant an additional extension of time not to exceed 90 days under section 5(c) of the Bank Holding Company Act (12 U.S.C. 1844(c)) or section 10(b)(2) of the Home Owners’ Loan Act (12 U.S.C. 1467a(b)(2)).

(10) Regulation K; divestiture of impermissible interests. To extend the time within which an investor, under section 211.8(e) and (f) of Regulation K (12 CFR 211.8(e) and (f)), must divest of investments in entities engaged in impermissible activities or interests acquired to prevent a loss upon a debt previously contracted in good faith.

(11) Bank holding company’s or savings and loan holding company’s acquisition of shares, opening new bank, consummating merger. To extend the time within which a bank holding company or savings and loan holding company may acquire shares, open a new bank to be acquired, or consummate a merger in connection with an application approved by the Board, if no material change relevant to the proposal has occurred since its approval.

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(12) Member bank’s establishing domestic or foreign branch; Edge or agreement corporation’s establishing branch or agency. To extend the times within which:

(i) A member bank may establish a domestic branch;

(ii) A member bank may establish a foreign branch; or

(iii) An Edge or agreement corporation may establish a branch or agency, if no material change has occurred in the bank’s (or corporation’s) general condition since the application was approved.

(13) Purchase of stock by Edge or agreement corporation, member bank, or bank holding company. To extend the time within which an Edge or agreement corporation, member bank, or a bank holding company may accomplish a purchase of stock if no material change has occurred in the general condition of the corporation, the member bank, or bank holding company since such authorization under sections 25 or 25A of the Federal Reserve Act or section 4(c)(13) of the Bank Holding Company Act (12 U.S.C. 615, 628, 1843(c)(13)).

(14) Federal Reserve membership. To extend the time within which Federal Reserve membership must be accomplished, if no material change has occurred in the bank’s general condition since the application was approved.

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(15) Enforcement actions; written agreements; cease-and-desist orders. With the concurrence of the director of the Division of Supervision and Regulation and the general counsel:

(i) To enter into a written agreement with a bank holding company or any nonbanking subsidiary thereof, with a savings and loan holding company or any subsidiary thereof (other than a savings association), with a state member bank, with a foreign bank that has elected to be treated as a financial holding company, or with any person or entity subject to the Board’s supervisory jurisdiction under section 8(b) of the Federal Deposit Insurance Act (12 U.S.C. 1818(b)) concerning the prevention or correction of an unsafe or unsound practice in conducting the business of the bank holding company or its nonbanking subsidiary, savings and loan holding company or its subsidiary (other than a savings association), or state member bank, or foreign bank that has elected to be treated as a financial holding company, or other entity, or concerning the correction or prevention of any violation of law, rule, or regulation, including section 4(m) of the Bank Holding Company Act (12 U.S.C. 1843(m)), or any condition imposed in writing by the Board in connection with the granting of any application or other request by the bank or company; and

(ii) To stay, modify, terminate, or suspend an agreement entered into pursuant to this paragraph (a)(15), other than to extend time limits in a corrective agreement with a financial institution under section 4(m) of the Bank Holding Company Act (12 U.S.C. 1843(m)).

(iii) To stay, modify, terminate, or suspend an outstanding cease-and-desist order that has become final pursuant to 12 U.S.C. 1818(b). Any agreement authorized under this paragraph may, by its terms, be enforceable to the same extent and in the same manner as an effective and outstanding cease-and-desist order that has become final pursuant to 12 U.S.C. 1818(b).

(16) Appointment of assistant Federal Reserve agents. To approve the appointment of assistant Federal Reserve agents (including representatives or alternate representatives of such agents) under section 4(21) of the Federal Reserve Act (12 U.S.C. 306).

(17) Relief from or modification of commitments. To grant or deny requests for relieving or modifying (including extending the time for performing) a commitment relied upon by the Reserve Bank in taking any action under the Bank Holding Company Act, section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)), the Change in Bank Control Act, the Federal Reserve Act, the International Banking Act, the Federal Deposit Insurance Act, or the Home Owners’ Loan Act, so long as the requests do not raise any significant legal, supervisory, or policy issues. In acting on such requests, the Reserve Bank may take into account changed circumstances and good faith efforts to fulfill the commitments, and shall consult with Board staff as appropriate. The Reserve Bank may not take any action that would be inconsistent with or result in an evasion of the provisions of the original action.

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(b) Availability of information; Board records. To make available information of the Board of the nature and in the circumstances described in sections 261.21(a) and 261.22(a) of the Board’s Rules Regarding Availability of Information (12 CFR 261.21(a) and 261.22(a)).

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(1) Require reports under oath. To require reports under oath to determine whether a company is complying with section 5(c) of the Bank Holding Company Act (12 U.S.C. 1844(c)) or section 10(b)(2) of the Home Owners’ Loan Act (12 U.S.C. 1467a(b)(2)).

(2) Acquisition of going concern—authorization of consummation; early consummation.

(i) To notify a bank holding company or savings and loan holding company that, because the circumstances surrounding the application to acquire a going concern indicate that additional information is required or that the acquisition should be considered by the Board, the acquisition should not be consummated until specifically authorized by the Reserve Bank or by the Board.

(ii) To permit a bank holding company or savings and loan holding company to make a proposed acquisition of a going concern before the expiration of the 30-day period referred to in section 225.24(d)(1) of Regulation Y (12 CFR 225.24(d)(1)) or section 238.53(f)(1)(i) of Regulation LL (12 CFR 238.53(f)(1)(i)) because exigent circumstances justify consummation of the acquisition at an earlier time.

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(3) Petition for review of decision that adverse comments are not substantive; permit proposed de novo activities; authorization of consummation. Under subpart C of Regulation Y (12 CFR part 225, subpart C) or subpart F of Regulation LL (12 CFR part 238, subpart F) and subject to section 265.3 (12 CFR 265.3), if a person submitting adverse comments that the Reserve Bank has decided are not substantive files a petition for review by the Board of that decision:

(i) To permit a bank holding company to engage de novo in activities specified in section 225.28(b) of Regulation Y (12 CFR 225.28(b)), or a savings and loan holding company to engage de novo in activities specified in sections 238.53 and 238.54 of Regulation LL (12 CFR 238.53 and 238.54), or retain shares in a company established de novo and engaging in such activities, if the Reserve Bank’s evaluation of the considerations specified in section 4(c)(8) of the Bank Holding Company Act (12 U.S.C. 1843(c)(8)) or section 10(c) of the Home Owners’ Loan Act (12 U.S.C. 1467a(c)) leads it to conclude that the proposal can reasonably be expected to produce benefits to the public.

(ii) To notify a bank holding company or savings and loan holding company that the proposal should not be consummated until specifically authorized by the Reserve Bank or by the Board or that the proposal should be processed in accordance with the procedures in subpart C of Regulation Y (12 CFR part 225, subpart C) or subpart F of Regulation LL (12 CFR part 238, subpart F).

(4) Nonbanking activities.

(i) To approve requests by bank holding companies to engage in check cashing for checks drawn on unaffiliated banks, real estate title abstracting, or acting as a certification authority for digital signatures and authenticating the identity of persons conducting financial and nonfinancial transactions, as an activity that is closely related to banking for purposes of section 4(c)(8) of the Bank Holding Company Act (12 U.S.C. 1843(c)(8)), when the proposal meets the conditions imposed by the Board in approving previous requests, and no significant legal, policy, or supervisory issues are raised by the specific proposal.

(ii) To approve requests by foreign banks subject to the Bank Holding Company Act by operation of section 8(a) of the International Banking Act (12 U.S.C. 3106(a)) to engage in acting as a certification authority for digital signatures and authenticating the identity of persons conducting financial and nonfinancial transactions, as an activity that is closely related to banking for purposes of section 4(c)(8) of the Bank Holding Company Act (12 U.S.C. 1843(c)(8)), when the proposal meets the conditions imposed by the Board in approving previous requests, and no significant legal, policy, or supervisory issues are raised by the specific proposal.

(5) Permit or stay of modification or location of activities. To permit or stay a proposed de novo modification or relocation of activities engaged in by a bank holding company or a savings and loan holding company on the same basis as de novo proposals under paragraph (c)(3) of this section.

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(6) Notices under the Change in Bank Control Act. With respect to a bank holding company, a savings and loan holding company, or a state member bank:

(i) To determine the informational sufficiency of notices and reports filed under the Change in Bank Control Act (12 U.S.C. 1817(j));

(ii) To extend periods for consideration of notices;

(iii) To determine whether a person who is or will be subject to a presumption described in section 225.41(c)(2) of Regulation Y (12 CFR 225.41(c)(2)) or section 238.31(c)(2) of Regulation LL (12 CFR 238.31(c)(2)) should file a notice regarding a proposed transaction; and

(iv) To issue a notice of intention not to disapprove a proposed change in control if all the following conditions are met:

(A) No member of the Board has indicated an objection prior to the Reserve Bank’s action;

(B) No senior officer or director of an involved party is also a director of a Federal Reserve Bank or branch;

(D) If the proposal involves shares of a state member bank or a bank holding company controlling a state member bank, the appropriate bank supervisory authorities have indicated that they have no objection to the proposal, or no objection has been received from them within the time allowed by the act; and

(E) No significant policy issue under the Change in Bank Control Act (12 U.S.C. 1817(j)), section 225.41 of Regulation Y (12 CFR 225.41), or section 238.31 of Regulation LL (12 CFR 238.31) is raised by the proposal as to which the Board has not expressed its view.

(7) Failure to comply with publication requirement under the Change in Bank Control Act. To waive, dispense with, modify, or excuse the failure to comply with the requirement for publication and solicitation of public comment regarding a notice filed under the Change in Bank Control Act (12 U.S.C. 1817(j)), with the concurrence of the director of the Division of Supervision and Regulation and the general counsel, provided that a written finding is made that such disclosure or solicitation would seriously threaten the safety or soundness of a bank holding company, savings and loan holding company, savings association, or bank under paragraph (2) of the Change in Bank Control Act (12 U.S.C. 1817(j)(2)).

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(8) Legacy nonbanking activities. To determine that termination of nonbanking activities conducted pursuant to the proviso in section 4(a)(2) of the Bank Holding Company Act (12 U.S.C. 1843(a)(2)) by a particular bank holding company is not warranted, provided the Reserve Bank is satisfied all of the following conditions are met:

(i) The company or its successor is “a company covered in 1970”;

(ii) The nonbanking activities that the bank holding company seeks to continue do not present any significant unsettled policy issues; and

(iii) The bank holding company was lawfully engaged in such activities as of June 30, 1968, and has been engaged in such activities continuously thereafter.

(9) Opening of additional nonbanking offices. To approve applications by a bank holding company under section 4(c)(8) of the Bank Holding Company Act (12 U.S.C. 1843(c)(8)) and subpart C of Regulation Y (12 CFR part 225, subpart C) to open additional offices to engage in nonbanking activities for which the bank holding company previously received approval pursuant to Board order, unless one of the conditions specified in paragraphs (c)(12)(i) through (iv) of this section is present.

(10) Volcker Rule. In consultation with Board staff, to approve (but not deny) an application by a banking entity for an extension of the period of time during which it must reduce its ownership interest in a covered fund to no more than 3 percent, if all of the following criteria are met:

(i) No significant issues have been identified regarding the firm’s compliance program;

(ii) The banking entity has represented that all of the requirements under section 13 of the Bank Holding Company Act (12 U.S.C. 1851) and its implementing regulations (12 CFR part 248) for organizing and offering a covered fund have been met;

(iii) The banking entity provides a plan for reducing the permitted investment in a covered fund through redemption, sale, dilution, or other methods by the end of the extension period; and

(iv) The primary federal agency responsible for enforcing compliance with section 13 of the Bank Holding Company Act (12 U.S.C. 1851) by the banking entity that invests in or sponsors the covered fund (if other than the Federal Reserve) does not object to the extension.

(11) Notices for addition or change of directors or officers. Under section 914(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1831i) and subpart H of Regulation Y (12 CFR part 225, subpart H)) and subpart H of Regulation LL (12 CFR part 238, subpart H), provided that no senior officer or director or proposed senior officer or director of the notificant is also a director of the Reserve Bank or a branch of the Reserve Bank:

(i) To determine the informational sufficiency of notices filed pursuant to section 225.72 of Regulation Y (12 CFR 225.72) or section 238.73 of Regulation LL (12 CFR 238.73); and

(ii) To waive the prior notice requirements of those sections.

(12) Applications requiring Board approval; competitive factors reports for bank mergers and savings association mergers. To approve applications requiring prior approval of the Board and furnish to the Comptroller of the Currency and the Federal Deposit Insurance Corporation reports on competitive factors involved in a bank merger or savings association merger required to be approved by one of those agencies, unless one or more of the following conditions is present:

(i) A member of the Board has indicated an objection prior to the Reserve Bank’s action; or

(ii) The Board has indicated that such delegated authority shall not be exercised by the Reserve Bank in whole or in part; or

(iii) A written substantive objection to the application has been properly made; or

(iv) The application raises a significant policy issue or legal question on which the Board has not established its position; or

(v)(A) With respect to holding company formations, acquisitions or mergers of holding companies, or acquisitions or mergers of insured depository institutions, except as set forth in paragraph (c)(12)(v)(B) of this section, upon consummation, the proposal would result in the control by a banking organization of over 35 percent of total deposits in banking offices in the relevant geographic market or an increase of at least 200 points in the Herfindahl-Hirschman Index (HHI) for deposits in a highly concentrated market (a market with a post-merger HHI of at least 1800) when including:

(1) All thrift deposits at 50 percent weight, except for deposits of thrifts determined by the Reserve Bank, with the concurrence of the director of the Division of Research and Statistics, to be commercially active, which are included at 100 percent weight; and

(2) The deposits of credit unions determined by the Reserve Bank, with the concurrence of the director of the Division of Research and Statistics, to offer consumer banking products, operate street-level branches, and have broad membership criteria in the relevant geographic market, which are included at 50 percent weight; or

(B) With respect to the formation of a savings and loan holding company, the merger of savings and loan holding companies, or the acquisition by a savings and loan holding company of a savings association, upon consummation, the proposal would result in the control by a banking organization of over 35 percent of total deposits in banking offices in the relevant geographic market or an increase of at least 200 points in the HHI for deposits in a highly concentrated market (a market with a post-merger HHI of at least 1800) when including:

(1) All thrift deposits at 100 percent weight; and

(vi) With respect to nonbank acquisitions, the nonbanking activities involved do not clearly fall within activities that the Board has designated as permissible for bank holding companies under section 225.28(b) of Regulation Y (12 CFR 225.28(b)); or

(vii) With respect to formations, acquisitions, or mergers involving depository institution holding companies, banks, or nonbank companies (except for internal corporate reorganizations), the proposed transaction represents an acquisition of assets equaling or exceeding $10 billion and would result in an organization with total assets equaling or exceeding $100 billion; or there is evidence that the transaction would result in a significant increase in interconnectedness, complexity, cross-border activities, or other risk factors related to the stability of the United States banking or financial system.

(13) Waivers.

(i) To inform an acquiring bank holding company, in connection with a notice submitted by the bank holding company pursuant to section 225.12(d)(2) of Regulation Y (12 CFR 225.12(d)(2)), that an application under section 225.11 of Regulation Y (12 CFR 225.11) is required.

(ii) To inform an acquiring savings and loan holding company, in connection with a notice submitted by the savings and loan holding company pursuant to section 238.12(d)(1) of Regulation LL (12 CFR 238.12(d)(1)), that an application under section 238.11 of Regulation LL (12 CFR 238.11) is required.

(14) Savings and loan holding companies in mutual form.

(i) To act on reorganization notices filed pursuant to section 10(o) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)) and section 239.3 of Regulation MM (12 CFR 239.3), including with respect to the establishment of a mutual holding company, if no significant legal, policy, or supervisory issues are raised by the proposal.

(ii) To act on applications to establish a subsidiary holding company of a mutual holding company filed pursuant to section 10(o) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)) and section 239.11 of Regulation MM (12 CFR 239.11), if no significant legal, policy, or supervisory issues are raised by the proposal.

(iii) To take any action related to an application by a mutual holding company to convert from mutual to stock form filed pursuant to section 10(o) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)) and subpart E of Regulation MM (12 CFR part 239, subpart E) if no significant legal, policy, or supervisory issues are raised by the proposal.

(iv) To act on notices to repurchase stock filed pursuant to section 10(o) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)) and section 239.63(d) of Regulation MM (12 CFR 239.63(d)), if no significant legal, policy, or supervisory issues are raised by the proposal.

(v) To extend for an additional 60 days the 30-day period within which the Board may object to a notice to repurchase stock filed pursuant to section 10(o) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)) and section 239.63(d) of Regulation MM (12 CFR 239.63(d)).

(vi) To act on applications to acquire savings associations, savings and loan holding companies, and other corporations filed pursuant to section 10(o) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)) and section 239.7 of Regulation MM (12 CFR 239.7), if no significant legal, policy, or supervisory issues are raised by the proposal.

(vii) To act on notices and applications to engage in activities filed pursuant to section 10(o) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)) and section 239.8 of Regulation MM (12 CFR 239.8), if no significant legal, policy, or supervisory issues are raised by the proposal.

(viii) To act on notices of indemnification filed pursuant to section 10(o) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)) and section 239.40 of Regulation MM (12 CFR 239.40), if no significant legal, policy, or supervisory issues are raised by the proposal.

(ix) To act on notices of waiver by mutual holding companies of the right to receive dividends declared by subsidiaries of the mutual holding company filed pursuant to section 10(o) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)) and section 239.8(d) of Regulation MM (12 CFR 239.8(d)), if no significant legal, policy, or supervisory issues are raised by the proposal.

(x) To act on applications relating to charter and bylaw amendments of mutual holding companies and subsidiary holding companies filed pursuant to section 10(o) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)) and sections 239.14, 239.15, 239.22, and 239.23 of Regulation MM (12 CFR 239.14, 239.15, 239.22, and 239.23), if no significant legal, policy, or supervisory issues are raised by the proposal.

(xi) To act on notices of transfer of stock and issuance of stock to insiders, associates of insiders, or tax-qualified or non-tax-qualified employee stock benefit plans filed pursuant to section 10(o) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)) and sections 239.7(b) and 239.8(e) of Regulation MM (12 CFR 239.7(b) and 239.8(e)), if no significant legal, policy, or supervisory issues are raised by the proposal.

(xii) To act on notices of disposition of stock of certain subsidiaries filed pursuant to section 10(o) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)) and section 239.7(b) of Regulation MM (12 CFR 239.7(b)), if no significant legal, policy, or supervisory issues are raised by the proposal.

(xiii) To act on applications to engage in voluntary supervisory conversions filed pursuant to section 10(o) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)) and section 239.65 of Regulation MM (12 CFR 239.65), if no significant legal, policy, or supervisory issues are raised by the proposal.

(xiv) To approve requests from subsidiary holding companies of mutual holding companies to conduct stock issuances pursuant to section 239.24 of Regulation MM (12 CFR 239.24), persons other than its mutual holding company parent pursuant to section 239.24 of Regulation MM (12 CFR 239.24), including approval of nonconforming stock issuances pursuant to section 239.24(c)(6)(ii) of Regulation MM (12 CFR 239.24(c)(6)(ii)) and determinations that certain procedural and substantive requirements are inapplicable pursuant to section 239.24(d) of Regulation MM (12 CFR 239.24(d)), where such requests do not raise any significant legal, policy, or supervisory issues.

(xv) To approve plans of dissolution filed by mutual holding companies and subsidiary holding companies of mutual holding companies pursuant to section 239.16 of Regulation MM (12 CFR 239.16), if no significant legal, policy, or supervisory issues are raised by the proposal.

(xvi) To grant a request to waive the application of section 239.59(d)(1), (h), (j), and (p)(2) of Regulation MM (12 CFR 239.59(d)(1), (h), (j), and (p)(2)) as those provisions relate to applications and notices seeking the Board’s prior approval to conduct a stock issuance pursuant to section 239.24 of Regulation MM (12 CFR 239.24) related to a reorganization to mutual holding company form pursuant to section 10(o)(3) of the Home Owners’ Loan Act (12 U.S.C. 1467a(o)(3)), or subsequent to a mutual holding company reorganization, and that do not raise any significant legal, policy, or supervisory concerns, except that the authority to grant waiver requests under this paragraph (c)(14)(xvi) is limited to requests by firms that—

(A) Do not qualify for federal preemption of state securities filing requirements;

(B) Propose to register their shares in states with ten or more eligible account holders, as that term is defined in section 239.52(c) of Regulation MM (12 CFR 239.52(c)); and

(C) Would make a proposed stock offering available to account holders eligible to participate in the offering in states where the offering would qualify for an exemption from state securities filing requirements.

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(d) International banking.

(1) Member bank, Edge corporation, or agreement corporation establishing foreign branch. With regard to a prior notice to establish a branch in a foreign country under section 211.3 of Regulation K (12 CFR 211.3)—

(i) To waive the notice period if immediate action is required and there is no significant legal, supervisory, or policy issue;

(ii) To suspend the notice period;

(iii) To determine not to object to the notice, provided that no significant legal, supervisory, or policy issue is raised by the proposal; or

(iv) To require the notificant to file an application for the Board’s specific consent.

(2) Acquisitions by a foreign branch. To approve, under section 211.4(a)(8) of Regulation K (12 CFR 211.4(a)(8)), a proposal by a foreign branch of a member bank to acquire all of the shares of a company that engages solely in activities in which the member bank is permitted to engage or that are incidental to the activities of the foreign branch, provided that no significant legal, supervisory, or policy issue is raised.

(3) Application to establish Edge corporation. To approve the application by a U.S. banking organization to establish an Edge corporation under section 25A of the Federal Reserve Act (12 U.S.C. 611 et seq.) and section 211.5 of Regulation K (12 CFR 211.5) if all of the following criteria are met:

(i) The U.S. banking organization meets the capital adequacy guidelines and is otherwise in satisfactory condition;

(ii) The proposed Edge corporation will be a wholly owned subsidiary of a single banking organization; and

(iii) No significant legal, supervisory, or policy issues are raised by the proposal.

(4) Issuance of permit to Edge corporation and amendments to articles of association and charter. To issue to an Edge corporation under section 25A of the Federal Reserve Act (12 U.S.C. 614) and section 211.5 of Regulation K (12 CFR 211.5) a permit to commence business and to approve amendments to the articles of association and charter of an Edge corporation.

(5) Investments in Edge and agreement corporations. To approve, pursuant to section 211.5(a)(3) of Regulation K (12 CFR 211.5(a)(3)) an application by a member bank to invest more than 10 percent of its capital and surplus in the aggregate amount of stock held in all Edge or agreement corporations; provided that:

(i) The member bank’s total investment, including retained earnings of the Edge and agreement corporation, does not exceed 20 percent of the bank’s capital and surplus and would not exceed that level as a result of the proposal; and

(ii) The proposal raises no significant legal, supervisory, or policy issues.

(6) Foreign ownership of an Edge corporation. To approve, under section 211.5(d) of Regulation K (12 CFR 211.5(d)), a foreign institution’s acquisition, directly or indirectly, of a majority of the shares of the capital stock of an Edge corporation, provided that no significant legal, supervisory, or policy issue is raised.

(7) Change in control of an Edge corporation. With regard to a notice to acquire, directly or indirectly, 25 percent or more of the voting securities, or otherwise to acquire control, of an Edge corporation, under section 211.5(e) of Regulation K (12 CFR 211.5(e)):

(i) To waive the notice period if immediate action is required and no significant legal, supervisory, or policy issue is raised;

(ii) To extend the notice period;

(iii) To determine not to object to the notice if no significant legal, supervisory, or policy issue is raised; or

(iv) To require the notificant to file an application for the Board’s specific consent.

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(8) Granting specific consent. To grant prior specific consent to an investor for—

(i) A long range investment plan, under section 211.9(a)(4) of Regulation K (12 CFR 211.9(a)(4)); or

(ii) An investment in its first subsidiary or its first joint venture, under section 211.9(a)(5) of Regulation K (12 CFR 211.9(a)(5)), where such investment does not exceed the general consent limitations under section 211.9(b) of Regulation K (12 CFR 211.9(b)).

(9) Investment in export trading company. To issue a notice of intention not to disapprove a proposed investment in an export trading company if all the following criteria are met:

(i) The proposed export trading company will be a wholly owned subsidiary of a single investor, or ownership will be shared with an individual or individuals involved in the operation of the export trading company;

(ii) A bank holding company investor and its lead bank meet the minimum capital adequacy guidelines of the Board, the Comptroller of the Currency, or the Federal Deposit Insurance Corporation or have enacted capital enhancement plans that have been determined by the appropriate supervisory authority to be acceptable;

(iii) The proposed activities of the export trading company do not include product research or design, product modification, or activities not specifically covered by the list of services contained in 4(c)(14)(F)(ii) of the Bank Holding Company Act (12 U.S.C. 1843(c)(14)(F)(ii)); and

(iv) No other significant policy issue is raised on which the Board has not previously expressed its view under section 4(c)(14) of the Bank Holding Company Act (12 U.S.C. 1843(c)(14)) and subpart C of Regulation K (12 CFR part 211, subpart C).

(10) Authority under prior-notice procedures.

(i) With regard to a prior notice to make an investment under section 211.9(f) of Regulation K (12 CFR 211.9(f)):

(A) To waive the notice period if immediate action is required and there is no significant legal, supervisory, or policy issue raised;

(B) To suspend the notice period;

(D) To require the notificant to file an application for the Board’s specific consent.

(ii)-(iv) [Reserved]

(v) With regard to a prior notice of a foreign bank to establish certain U.S. offices under section 211.24(a)(2)(i) of Regulation K (12 CFR 211.24(a)(2)(i)):

(A) To waive the notice period if immediate action is required and there is no significant legal, supervisory, or policy issue raised;

(B) To suspend the notice period;

(D) To require the notificant to file an application for the Board’s specific consent.

(11) Activities usual in connection with banking or other financial operations abroad.

(i) To approve a prior notice, under section 211.10(a)(14) of Regulation K (12 CFR 211.10(a)(14)), to engage in underwriting and distribution of equity securities outside the United States, provided that the proposal raises no significant legal, supervisory, or policy issue.

(ii) To approve a prior notice, under section 211.10(a)(15) of Regulation K (12 CFR 211.10(a)(15)), to engage in dealing in equity securities outside the United States, provided that the proposal raises no significant legal, supervisory, or policy issue.

(iii) To approve a prior notice, under section 211.10(a)(15)(iv)(B) of Regulation K (12 CFR 211.10(a)(15)(iv)(B)), to use internal hedging models, provided that the proposal raises no significant legal, supervisory, or policy issue.

(iv) To approve a prior notice, under section 211.10(a)(18) of Regulation K (12 CFR 211.10(a)(18), to engage in futures commission merchant activities on an mutual exchange or clearinghouse that requires members to guarantee or otherwise contract to cover losses suffered by the other members, provided that the Board has previously approved the exchange, the application is on the same terms and conditions on which the Board based its approval of the exchange, and no significant legal, supervisory, or policy issue is raised.

(12) Change in foreign bank home state. With respect to a foreign bank’s change of home state under section 211.22(b) of Regulation K (12 CFR 211.22(b)) and provided no significant legal, supervisory, or policy issue is raised:

(i) To waive the notice period; or

(ii) To determine not to object to the notice.

(13) Waiver of 30-day prior notification period. To waive the 30-day prior notification period with respect to a foreign bank’s change of home state under section 211.22(b)(1) of Regulation K (12 CFR 211.22(b)(1)).

(14) Offices of foreign banks.

(i) To approve the establishment of a branch, agency, commercial lending company, or representative office by a foreign bank in the United States, pursuant to section 211.24(a)(1) of Regulation K (12 CFR 211.24(a)(1)), if the Board has already determined that the foreign bank is subject to consolidated comprehensive supervision and provided that the application raises no significant legal, supervisory, or policy issue.

(ii) To allow a foreign bank to establish a temporary office of a branch or agency, pursuant to section 211.24(a)(5) of Regulation K (12 CFR 211.24(a)(5)), provided there is no direct public access to such office and no significant legal, supervisory, or policy issue is raised.

(15) Agreement with foreign bank concerning deposits of out-of-home-state branch. To enter into an agreement or undertaking with a foreign bank that it shall receive only such deposits at its out-of-home-state branch as would be permissible for an Edge corporation under section 5 of the International Banking Act (12 U.S.C. 3103).

(16) Dividends of property other than cash by an Edge corporation. To approve (but not deny) a request by an Edge corporation to declare or pay a dividend of property other than cash if the request does not raise a significant legal, supervisory, or policy issue.

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(e) Member banks.

(1) Approval of membership applications. To approve applications for membership in the Federal Reserve System under section 9 of the Federal Reserve Act (12 U.S.C. 321 et seq.) and Regulation H (12 CFR part 208) if the Reserve Bank is satisfied that approval is warranted after considering the factors set forth in 12 CFR 208.3(b).

(2) Waiver of notice of intention to withdraw from membership. To approve or deny applications by state banks for waiver of the required six months’ notice of intention to withdraw from Federal Reserve membership under section 9(10) of the Federal Reserve Act (12 U.S.C. 328).

8-121.94

(3) Approval of branch applications. To approve a state member bank’s establishment of a domestic branch under section 9 of the Federal Reserve Act (12 U.S.C. 321 et seq.) and Regulation H (12 CFR part 208) if the Reserve Bank is satisfied that approval is warranted after considering the factors set forth in 12 CFR 208.6(b).

(4) Declaration of dividends in excess of net profits. To permit a state member bank under section 9(6) of the Federal Reserve Act (12 U.S.C. 324) to declare dividends in excess of the amounts allowed in section 208.5(c) of Regulation H (12 CFR 208.5(c)) if the Reserve Bank is satisfied that approval is warranted after giving consideration to:

(i) The bank’s capitalization in relation to the character and condition of its assets and to its deposit liabilities and other corporate responsibilities, including the volume of its risk assets and of its marginal and inferior quality assets, all considered in relation to the strength of its management; and

(ii) The bank’s capitalization after payment of the proposed dividends.

(5) Reduction of capital stock. To permit a state member bank under section 9(11) of the Federal Reserve Act (12 U.S.C. 329) to reduce its capital stock below the amounts set forth in section 208.5(d) of Regulation H (12 CFR 208.5(d)) if the state member bank’s capitalization thereafter will be:

(i) In conformity with the requirements of federal law; and

(ii) Adequate in relation to the character and condition of its assets and to its deposit liabilities and other corporate responsibilities, including the volume of its risk assets and of its marginal and inferior quality assets, all considered in relation to the strength of its management.

8-121.95

(6) Acceptance of drafts and bills of exchange. To permit a member bank or a federal or state branch or agency of a foreign bank that is subject to reserve requirements under section 7 of the International Banking Act (12 U.S.C. 3105) to accept drafts or bills of exchange under section 13(7) of the Federal Reserve Act (12 U.S.C. 372) in an aggregate amount at any one time up to 200 percent of its paid-up and unimpaired capital stock and surplus, if the Reserve Bank is satisfied that such permission is warranted after giving consideration to the institution’s capitalization in relation to the character and condition of its assets and to its deposit liabilities and other corporate responsibilities, including the volume of its risk assets and of its marginal and inferior quality assets, all considered in relation to the strength of its management.

(7) Investment in bank premises in excess of capital stock. To permit a state member bank to invest in bank premises under section 24A of the Federal Reserve Act (12 U.S.C. 371d) in an amount in excess of that set forth in section 208.21(a) of Regulation H (12 CFR 208.21(a)), if the Reserve Bank is satisfied that approval is warranted after giving consideration to the bank’s capitalization in relation to the character and condition of its assets and to its deposit liabilities and other corporate responsibilities, including the volume of its risk assets and of its marginal and inferior quality assets, all considered in relation to the strength of its management.

(8) Security devices. To determine whether security devices and procedures of state member banks are deficient in meeting the requirements of Regulation H (12 CFR part 208) and whether such requirements should be varied in the circumstances of a particular banking office, and whether to require corrective action.

8-121.96

(9) Classifying member banks for election of directors. To classify member banks for the purposes of electing Federal Reserve Bank class A and class B directors under section 4(16) of the Federal Reserve Act (12 U.S.C. 304), giving consideration to:

(i) The statutory requirement that each of the three groups shall consist as nearly as may be of banks of similar capitalization; and

(ii) The desirability that every member bank have the opportunity to vote for a class A or a class B director at least once every three years.

(10) Waiver of penalty for deficient reserves. To waive the penalty for deficient reserves by a member bank if, after a review of all the circumstances relating to the deficiency, the Reserve Bank concludes that waiver is warranted, except that in no case may a penalty be waived if the deficiency in reserves arises out of the bank’s gross negligence or conduct inconsistent with the principles and purposes of reserve requirements.

8-121.97

(11) Retirement of subordinated debt. To approve the retirement prior to maturity of capital notes described in section 204.2(a)(1)(vii)(C) of Regulation D (12 CFR 204.2(a)(1)(vii)(C)) and issued by a state member bank, provided the Reserve Bank is satisfied that the capital position of the bank will be adequate after the proposed redemption.

(12) Public welfare investments.

(i) To permit a state member bank to make a public welfare investment in accordance with section 9(23) of the Federal Reserve Act (12 U.S.C. 338a), provided that the proposal satisfies section 208.22(b)(1) of Regulation H (12 CFR 208.22(b)(1)) and no significant legal, supervisory, or policy issue is raised; and

(ii) To determine, in connection with acting on a proposal pursuant to delegated authority as set forth in paragraph (e)(12)(i) of this section, that the aggregate amount of a state member bank’s public welfare investments will not pose a significant risk to the deposit insurance fund in accordance with section 9(23) of the Federal Reserve Act (12 U.S.C. 338a).

(13) Dividends of property other than cash by a state member bank. To approve (but not deny) a request by a state member bank to declare or pay a dividend of property other than cash if the request does not raise a significant legal, supervisory, or policy issue.

8-121.98

(f) Securities. To approve applications by a registered lender for termination of the registration under section 221.3(b)(2) of Regulation U (12 CFR 221.3(b)(2)).

8-121.99

(g) Management interlocks. After consultation with the general counsel, to decide not to disapprove notices to establish director interlocks with diversified savings and loan holding companies under section 205(8) of the Depository Institution Management Interlocks Act (12 U.S.C. 3204(8)).

(h) Qualified family partnerships. To act on requests for determinations of qualified family partnership status under section 2(o)(10) of the Bank Holding Company Act (12 U.S.C. 1841(o)(10)).

(i) Financial holding companies. In consultation with Board staff, to make effective elections filed by U.S. bank holding companies to become financial holding companies.

(j) Savings and loan holding companies.

(1) With the approval of the director of the Division of Supervision and Regulation and the general counsel, to enter into corrective action agreements with savings and loan holding companies pursuant to section 238.66 of Regulation LL (12 CFR 238.66).

(2) To act on notices of capital distributions filed pursuant to section 10(f) of the Home Owners’ Loan Act (12 U.S.C. 1467a(f)) and section 238.103 of Regulation LL (12 CFR 238.103).

(3) To act on elections to engage in financial holding company activities filed pursuant to section 10(c) of the Home Owners’ Loan Act (12 U.S.C. 1467a(c)) and subpart G of Regulation LL (12 CFR part 238, subpart G), if no significant legal, policy, or supervisory issues are raised by the proposal.

(4) To act on notices and applications to engage in activities filed pursuant to section 10(c) of the Home Owners’ Loan Act (12 U.S.C. 1467a(c)) and subparts F and G of Regulation LL (12 CFR part 238, subparts F and G), if no significant legal, policy, or supervisory issues are raised by the proposal.

(5) To grant requests by companies to deregister as savings and loan holding companies, if no significant legal, policy, or supervisory issues are raised by the proposal.

(k) Financial operations of the Bank for International Settlements. The Federal Reserve Bank of New York is authorized to assent or dissent, as appropriate, to financial operations of the Bank for International Settlements conducted in the U.S. market or in U.S. dollars.

(l) Regulatory capital rule.

(1) Delegations regarding the definition of capital.

(i) With the concurrence of the director of the Division of Supervision and Regulation, to:

(A) Act on a company’s request under section 217.20(b)(1)(iii), section 217.20(c)(1)(vi), or section 217.20(d)(1)(x) of Regulation Q (12 CFR 217.20(b)(1)(iii), 217.20(c)(1)(vi), or 217.20(d)(1)(x)) to redeem a security; and

(B) Act on a company’s request under section 217.20(c)(1)(v)(A) or section 217.20(d)(1)(v)(A) of Regulation Q (12 CFR 217.20(c)(1)(v)(A) and 217.20(d)(1)(v)(A)) to exercise a call option.

(2) Delegations regarding standardized approach risk-weighted assets.

(i) With the concurrence of the director of the Division of Supervision and Regulation, to:

(A) Act on a request from a company under section 217.37(c) of Regulation Q (12 CFR 217.37(c)) to use its own estimates of haircuts, including:

(1) Acting on a request by a company under section 217.37(c)(4)(i)(E) of Regulation Q (12 CFR 217.37(c)(4)(i)(E)) to make changes to the company’s policies and procedures; and

(2) Requiring a company under section 217.37(c)(4)(i)(F) of Regulation Q (12 CFR 217.37(c)(4)(i)(F)) to use a different period of significant financial stress in the calculation of own estimates of haircuts; and

(B) Determine under section 217.41(c) of Regulation Q (12 CFR 217.41(c)) whether or not a company has demonstrated a comprehensive understanding of the features of a securitization exposure.

(3) Delegations regarding advanced approaches risk-weighted assets.

(i) With the concurrence of the director of the Division of Supervision and Regulation, to:

(A) Act on a request for approval of any model or optional approach available under subpart E of Regulation Q (12 CFR part 217, subpart E), including, without limitation:

(1) Any counterparty credit risk model or methodology (own estimates of haircuts, simple VaR methodology, internal models methodology, or advanced CVA approach) under sections 217.122(d) and 217.132 of Regulation Q (12 CFR 217.122(d) and 217.132), including:

(i) Acting on a request by a company under section 217.132(b)(2)(iii)(A)(5) of Regulation Q (12 CFR 217.132(b)(2)(iii)(A)(5)) to make changes to the company’s policies and procedures;

(ii) Requiring a company under section 217.132(b)(2)(iii)(A)(6) of Regulation Q (12 CFR 217.132(b)(2)(iii)(A)(6)) to use a different period of significant financial stress in the calculation of own internal estimates for haircuts;

(iii) Acting on a request by a company under section 217.132(d)(1) introductory text and (d)(1)(iv) of Regulation Q (12 CFR 217.132(d)(1) introductory text and (d)(1)(iv)) to use the internal models methodology, cease using the internal models methodology for a transaction type, or to make a material change to its internal model;

(iv) Acting on a request by a company under section 217.132(d)(2)(iv) and (d)(10) of Regulation Q (12 CFR 217.132(d)(2)(iv) and (d)(10)) to use a more conservative estimate of Exposure at Default;

(v) Determining that a company must set a higher “alpha” under section 217.132(d)(2)(iv)(C) of Regulation Q (12 CFR 217.132(d)(2)(iv)(C)) based on the company’s specific characteristics of and counterparty credit risk or model performance;

(vi) Acting on a request by a company under section 217.132(d)(3) of Regulation Q (12 CFR 217.132(d)(3)) to calculate the distributions of exposures upon which the EAD calculation is based;

(vii) Requiring a company under section 217.132(d)(3)(viii) of Regulation Q (12 CFR 217.132(d)(3)(viii)) to modify its stress calibration to better reflect actual historic losses of the portfolio;

(viii) Acting on a request by a company under section 217.132(d)(5)(i) of Regulation Q (12 CFR 217.132(d)(5)(i)) to include the effect of a collateral agreement within an internal model used to calculate EAD;

(ix) Requiring a company under section 217.132(d)(5)(iii)(C) of Regulation Q (12 CFR 217.132(d)(5)(iii)(C)) to set a longer holding period (for margin period of risk for a netting set that is subject to a collateral agreement) if the director determines that a longer period is appropriate due to the nature, structure, or characteristics of the transaction or is commensurate with the risks associated with the transaction;

(x) Acting on a request by a company under section 217.132(d)(6) of Regulation Q (12 CFR 217.132(d)(6)) to calculate alpha as the ratio of economic capital from a full simulation of counterparty exposure across counterparties that incorporates a joint simulation of market and credit risk factors (numerator) and economic capital based on EPE (denominator), subject to a floor of 1.2;

(xi) Acting on a request by a company under section 217.132(e) of Regulation Q (12 CFR 217.132(e)) to calculate its CVA risk-weighted asset amounts for a class of counterparties using the advanced CVA approach;

(xii) Acting on a request by a company under section 217.132(e)(6)(ii)(D) of Regulation Q (12 CFR 217.132(e)(6)(ii)(D)) to use a conservative estimate when determining LGD_MKT; and

(xiii) Requiring a company under section 217.132(e)(6)(v)(B) of Regulation Q (12 CFR 217.132(e)(6)(v)(B)) to use a different period of significant financial stress in the calculation of the CVA_stressed measure;

(2) Any model or approach relating to cleared transactions under sections 217.122(d) and 217.133 of Regulation Q (12 CFR 217.122(d) and 217.133), including:

(i) Under section 217.133(d)(1) of Regulation Q (12 CFR 217.133(d)(1)) a company that is a clearing member to determine the risk-weighted asset amount for a default fund contribution to a CCP more frequently than quarterly if in the opinion of the director of the Division of Supervision and Regulation, there is a material change in the financial condition of the CCP; and

(ii) Acting on a request under section 217.133(d)(2) of Regulation Q (12 CFR 217.133(d)(2)) for a company to use a risk-weighted asset amount for default fund contributions to a CCP that is not a QCCP other than a 1,250 percent risk weight;

(3) Any model or approach relating to the double default treatment under sections 217.122(e) and 217.135 of Regulation Q (12 CFR 217.122(e) and 217.135), including acting on a request by a company under section 217.135(a)(6) of Regulation Q (12 CFR 217.135(a)(6)) to implement a process to detect excessive correlation between the creditworthiness of the obligor of a hedged exposure and a protection provider;

(4) A company’s own internal estimates of market price volatility and foreign exchange volatility under section 217.145(b)(4) of Regulation Q (12 CFR 217.145(b)(4)); and

(5) The internal models approach for equity exposures under sections 217.122(f) and 217.153(b) of Regulation Q (12 CFR 217.122(f) and 217.153(b));

(B) Determine under section 217.131(e)(4) of Regulation Q (12 CFR 217.131(e)(4)) whether a portfolio of exposures is or is not material; and

(C) Assess for purposes of section 217.141(c)(1) of Regulation Q (12 CFR 217.141(c)(1)) whether a company has a comprehensive understanding of the features of a securitization exposure that would materially affect the performance of the exposure.

(4) Delegations regarding market risk risk-weighted assets.

(i) With the concurrence of the director of the Division of Supervision and Regulation, to act regarding any model approval, disapproval, rescission, or supervision under subpart F of Regulation Q (12 CFR part 217, subpart F), including the authority to:

(A) Exclude from the definition of “covered position” structural foreign currency positions of a company, or any hedge of a trading position that is outside the scope of the company’s hedging strategy, under section 217.202(b) of Regulation Q (12 CFR 217.202(b));

(B) Act on a request from a company under section 217.203(c)(1) of Regulation Q (12 CFR 217.203(c)(1)) to approve its internal model(s) to calculate its risk-based capital requirement;

(C) Rescind approval under section 217.203(c)(3) of Regulation Q (12 CFR 217.203(c)(3)) of a company’s internal model(s) to calculate its risk-based capital requirement;

(D) Act on a request from a company under section 217.204(a)(2)(vi)(B) of Regulation Q (12 CFR 217.204(a)(2)(vi)(B)) to use alternative techniques to measure the risk of de minimis exposures;

(E) Act on a request from a company under section 217.204(b)(2) of Regulation Q (12 CFR 217.204(b)(2)) to use a different adjustment of its VaR-based measure;

(F) Review and determine the appropriateness of a company’s omission of risk factors under section 217.205(a)(4) of Regulation Q (12 CFR 217.205(a)(4)) and the use of proxies under section 217.205(a)(5) of Regulation Q (12 CFR 217.205(a)(5));

(G) Review and determine under section 217.205(b)(1) of Regulation Q (12 CFR 217.205(b)(1)) the appropriateness of any conversions of VaR to other holding periods by a company;

(H) Review and determine under section 217.205(b)(2)(ii) of Regulation Q (12 CFR 217.205(b)(2)(ii)) the appropriateness of a company’s alternative weighting schemes;

(I) Approve or disapprove under section 217.205(c) of Regulation Q (12 CFR 217.205(c)) any requirements relating to a company’s division of subportfolios;

(J) Approve or disapprove under section 217.206(b)(3) of Regulation Q (12 CFR 217.206(b)(3)) any changes to a company’s policies and procedures that describe how the company determines the period of significant financial stress used to calculate its stressed VaR-based measure;

(K) Require a company under section 217.206(b)(4) of Regulation Q (12 CFR 217.206(b)(4)) to use a different period of significant financial stress in the calculation of the stressed VaR-based measure;

(L) Act on a request by a company under section 217.208(a) of Regulation Q (12 CFR 217.208(a)) to include certain portfolios of equity positions in its incremental risk model;

(M) Act on a request by a company under section 217.209(a)(1) of Regulation Q (12 CFR 217.209(a)(1)) to use the comprehensive risk approach for one or more portfolios of correlation trading positions and the related approval under section 217.209(a)(2)(ii) of Regulation Q (12 CFR 217.209(a)(2)(ii)) regarding a company’s comprehensive risk capital requirement;

(N) Determine under section 217.210(e)(3) of Regulation Q (12 CFR 217.210(e)(3)) whether an index is a main index because the equities represented by the index have comparable liquidity, depth of market, and size of bid-ask spreads as equities in the Standard & Poor’s 500 Index and FTSE All-World Index; and

(O) Determine under section 217.210(f)(1) of Regulation Q (12 CFR 217.210(f)(1)) whether or not a company has demonstrated a comprehensive understanding of the features of a securitization exposure.