The Federal Reserve approved a final rule outlining the steps nonbank companies owning at least one registered broker or dealer must take to elect supervision by the Fed. The Dodd-Frank Act eliminated the SEC’s securities holding company (SHC) supervisory framework and permitted such companies to be supervised by the Fed.
Under the rule, SHCs may seek Fed supervision to meet a foreign regulator’s requirement that they be subject to consolidated supervision in the United States in order to operate in the foreign country. The rule specifies the information that SHCs must provide to register for Fed supervision, including organizational structure, capital and financial condition.
Dodd-Frank gives the Fed the authority to examine SHCs and set capital and risk management standards for them. The final rule will become effective 30 days after publication in the Federal Register.
Read the final rule.