FR Y-20

Financial Statements for a Bank Holding Company Subsidiary Engaged in Bank-Ineligible Securities Underwriting and Dealing

Description: This report is filed by a designated bank holding company (BHC) for its subsidiary that engages in limited securities underwriting and dealing activities. The FR Y-20 consists of a Memoranda Schedule and Statement of Income. The information is needed to monitor compliance with the Board's revenue test.


Purpose: Supervision and Regulation staff use the FR Y-20 data to monitor the revenue limitations governing the Section 20 subsidiary and to assist in analyzing its financial condition in conjunction with review of the Securities and Exchange Commission's FOCUS (Financial and Operational Combined Uniform Single) Report.

Background: In 1987, the Board of Governors authorized certain BHCs to engage in limited debt securities underwriting and dealing activities through designated nonbanking subsidiaries. Subsequently in 1989, the Board expanded its authorization to enable certain subsidiaries to underwrite any debt security, as well as equity securities. The Board approves applications subject to the condition that subsidiaries do not engage principally in the underwriting and distribution of bank-ineligible securities, which were prohibited under the Banking Act of 1933 (the Glass Steagall Act) prior to passage of the Gramm-Leach-Bliley Act. This report was implemented in 1990 and is required for those organizations that continue to engage in limited securities underwriting and dealing activities subject to former Section 20 of the Glass-Steagall Act.

Respondent Panel: The panel consists of all BHCs with subsidiaries that applied, under section 4(c)(8) of the Bank Holding Company Act (BHC Act), and received the Board's approval to engage in limited underwriting and dealing in bank-ineligible securities (i.e., securities that banks were not authorized to underwrite and to deal in prior to passage of the Gramm-Leach-Bliley Act). Participation is required.

Frequency: Quarterly, as of close of business on the last calendar day of the quarter, unless operations have not commenced.

Public Release: Microdata are confidential.

Last Update: July 1, 2005