December 04, 2015
Federal Reserve Board issues final rule providing information on Board's revised capital rules for non-traditional stock corporations
For release at 2:00 p.m. EST
The Federal Reserve Board on Friday issued a final rule providing information about how to apply the Board's revised capital framework issued in June 2013 to depository institution holding companies that are not organized as traditional stock corporations.
Institutional investors with controlling interests in depository institutions and depository institution holding companies may structure their investments through non-stock entities, such as limited liability corporations and partnerships. To show how the capital instruments issued by these non-traditionally structured firms could meet the capital requirements under the Board's revised capital framework, the final rule issued today provides examples to clarify how instruments issued by these firms may qualify as regulatory capital.
The final rule is generally similar to the proposed rule, issued in December 2014. To provide sufficient time for firms to review and revise their capital structures, the final rule extends the applicable compliance date with the Board's revised capital framework to July 1, 2016.
The final rule also notes that the Board expects to propose regulatory capital rules in the future for savings and loan holding companies that are personal or family trusts and are not business trusts, and to clarify the treatment of employee stock ownership plans that are depository institution holding companies. The final rule provides temporary exclusions for these types of firms from the revised capital framework.
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