“Federal Reserve Board Proposes Rule on Definitions Related to Regulation of Nonbank Financial Companies under Dodd-Frank Act”
On February 8, 2011, the Board of Governors of the Federal Reserve System (the “FRB” or the “Board”) requested comment on a proposed rule under Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act” or the “Act”) that would: (1) establish the criteria for determining whether a company is “predominantly engaged in financial activities”; and (2) define the terms “significant nonbank financial company” and “significant bank holding company” for purposes of the Act. The FRB’s release includes a number of related questions on which the FRB is requesting comment. Categorization as a “nonbank financial company,” particularly a “significant nonbank financial company,” could have important implications for a company.
This Stroock Special Bulletin looks at the proposed rule and some of the implications for a company of categorization as a “nonbank financial company” or a “significant nonbank financial company.” Comments on the proposed rule are due by March 30, 2011.