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6.19 Securities Holding Company Supervision

<< Title VI Overview

6.19 Securities Holding Company Supervision

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6.19.     Securities Holding Company Supervision. 

6.19.1. Elimination of SEC-Supervised Elective Investment Bank Holding Company Framework.  Nonbank securities firms will no longer be able to elect to become investment bank holding companies subject to SEC regulation.  These provisions were in place to permit companies to elect to be supervised on a consolidated basis if required by foreign regulators.  This framework is replaced by the new Securities Holding Company framework. [§ 617]

6.19.2.     Fed Supervised Securities Holding Companies.  If a securities firm owns or controls at least one registered broker-dealer and is required to be supervised on a consolidated basis, the firm will be permitted to elect to become a securities holding company supervised by the Fed. [§ 618]   Fed Powers.  The Fed will have examination authority over securities holding companies and will be permitted to require these companies to submit reports and retain records.  The Fed also is empowered to set capital and risk management standards for securities holding companies.  In addition, enforcement provisions of the FDI Act and certain provisions of the BHC Act will apply to securities holding companies.