In February 2014, the government of the United States of America announced a change in the required local operations to serve domestic customers.



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Inception date: 01 Jun 2014 | Removal date: open ended

Local operations

A final rule that the Federal Reserve Board approved on February 18, 2014, and published in the Federal Register (Volume 79 Number 59) on March 27, 2014, strengthened the supervision and regulation of large U.S. bank holding companies and foreign banking organizations. Among other things, the rule requires a foreign banking organization with a significant U.S. presence to establish an intermediate holding company over its U.S. subsidiaries to facilitate supervision and regulation of the U.S. operations of the foreign bank. The final rule was required by section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
According to the Federal Reserve, the requirements in the final rule will bolster the capital and liquidity positions of the U.S. operations of foreign banking organizations and promote a level playing field among all banking firms operating in the United States. Foreign banking organizations with U.S. non-branch assets of $50 billion or more will be required to establish a U.S. intermediate holding company over their U.S. subsidiaries. The foreign-owned U.S. intermediate holding company generally will be subject to the same risk-based and leverage capital standards applicable to U.S. bank holding companies. The intermediate holding companies also will be subject to the Federal Reserve's rules requiring regular capital plans and stress tests.
The final rule entered into effect on June 1, 2014.