How Should Foreign Banks Be Permitted to Engage in Nonbanking Activities within the United States?
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In the lead article of The Banking Law Journal's November-December 2022 issue, White & Case partner Douglas Landy and counsel James Kong examine how foreign banks should be permitted to engage in nonbanking activities within the United States.
In the piece, the authors argue that the Federal Reserve should adopt the 2019 Volcker Rule revisions as the standard for foreign bank engagement in domestic nonbanking activities.
The article notes, "On October 8, 2019, the Federal Reserve and four other federal agencies amended the Volcker Rule to simplify or eliminate certain unnecessary, unwieldy, and/or redundant requirements. Among these changes were amendments to the requirements to utilize the 'trading outside of the United States' exception to the proprietary trading restriction ('TOTUS').While directed specifically at 'financial instruments'…we believe that the Federal Reserve should adopt TOTUS as the established standard for all FBO nonbanking activity conducted pursuant to the provision in Federal Reserve Regulation K, which states that a Foreign Bank Organization may '[e]ngage in activities of any kind outside of the United States.'"
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