.. -...........
`~ .. ~ ....... ~
`
`V I (.O<o·UHMl,..,
`
`GPO
`
`Page 1189
`
`TITLE 12-BANKS AND BANKING
`
`§1843
`
`1980---Subsec. (c). Pub. L . 96-221, §713, inserted provi(cid:173)
`sions relating to applications for the formation of one(cid:173)
`bank holding companies.
`Subsec. (d). Pub. L . 96-221, §712(b), (c), temporar!ly
`designated existing provisions as par. (1) and added par.
`(2). See Termination Date of 1980 Amendment note set
`out below.
`1977-Subsec. (a). Pub. L. 96-188, §301(a), authorized
`the Board to extend the time for disposition of acquired
`shares for not more than one year at a time and three
`years in the aggregate.
`Subsec. (b). Pub. L . 96-188, §302, inserted provision for
`alternative submission of views and recommendations
`within ten calendar days of the date on which notice is
`given if the Board advises the appropriate supervisory
`authority that an emergency exists requiring expedi(cid:173)
`tious action, substituted " shall, by order," for " shall
`by order· • and inserted provisions respecting procedure
`in emergencies or probable failures requiring imme(cid:173)
`diate Board action and orders.
`1970---Subsec. (a). Pub. L. 91-S07, §102(1), inserted pro(cid:173)
`vision deeming acquisition of bank shares after Dec. 31,
`1970, as not being in good faith in a fiduciary capacity
`if acquiring bank or company has sole discretionary au(cid:173)
`thority to exercise voting rights with respect thereto,
`and provision for subsequent approval of retention of
`acquired shares upon application filed within 90 days of
`acquisition and disposition of shares or sole discre(cid:173)
`tionary voting rights within two years after order in an
`event of disapproval.
`Subsec. (b). Pub. L . 91-S07, §102(2), inserted provision
`deeming an application for approval as granted where
`Board has not acted on application within 91 day period
`beginning on date of submission to Board of complete
`record on application.
`Subsec. (e). Pub. L. 91-S07, § 102(3), added subsec. (e).
`1966-Subsec. (a). Pub. L . 89-485, §7(a), (b), expanded
`the list of acts requiring prior approval of the Board by
`including therein any action that causes a bank to be(cid:173)
`come a subsidiary of a bank holding company and sub(cid:173)
`stituted provisions excepting shares that are held
`under a trust that constitutes a company as defined in
`section 1841(b) of this title and excepting shares as pro(cid:173)
`vided in pars. (2) and (3) of section 1841(g) of this title
`from the effect of the clause lifting the requirements of
`prior Board approved in the case of shares acquired by
`a bank in good faith in a fiduciary capacity for provi(cid:173)
`sions excepting shares held for the benefit of the share(cid:173)
`holders of a bank from the effect of the clause.
`Subsec. (c). Pub. L . 89-485, § 7(c), inserted provision
`prohibiting any acquisition, merger, or consolidation
`that would result in a monopoly or would further any
`combination or conspiracy to monopolize the banking
`business in any part of the United States or would sub(cid:173)
`stantially lessen competition or in any manner be in
`restraint of trade unless the public interest clearly out(cid:173)
`weighed the anticompetitive effects and substituted
`provisions requiring the Board to take into consider(cid:173)
`ation the financial and managerial resources and future
`prospects of the company or bank concerned and the
`convenience and needs of the community to be served
`for provisions requiring the Board to take into consid(cid:173)
`eration the financial history of the company or bank
`concerned, its prospects, the character of its manage(cid:173)
`ment, the needs of the community, and the public in(cid:173)
`terest.
`Subsec. (d). Pub. L . 89-485, §7(d), substituted provi(cid:173)
`sions restricting expansion to state in which the oper(cid:173)
`ations of the bank holding company's banking subsidi(cid:173)
`aries were principally conducted, defined, as that state
`in which total deposits of all such banking subsidiaries
`were largest, on July 1, 1966, or the date on which the
`company became a bank holding company, whichever is
`later, for provisions restricting expansion to state in
`which the holding company maintains its principal of(cid:173)
`fice and place of business or in which it conducts its
`principal operations.
`EFFECTIVE DATE OF 2010 AMENDMENT
`Amendment by section 604(d) of Pub. L. 111-203 effec(cid:173)
`tive on the transfer date, see section 604(j) of Pub. L .
`111-203, set out as a note under section 1462 of this title.
`
`Amendment by section 607(a) of Pub. L. 111-203 effec(cid:173)
`tive on the transfer date, see section 607(c) of Pub. L.
`111- 203, set out as a note under section 1831u of this
`title.
`
`EFFECTIVE DATE OF 2006 AMENDMENT
`Amendment by Pub. L . 10~173 effective Mar. 31, 2006,
`see section 9(j) of Pub. L . 10~173 , set out as a note
`under section 24 of this title.
`EFFECTIVE DATE OF 2004 AMENDMENT
`Amendment by Pub. L . 10S..386 effective Oct. 30, 2004,
`and, except as otherwise provided, applicable with re(cid:173)
`spect to fiscal year 2005 and each succeeding fiscal
`year, see sections 8(i) and 9 of Pub. L . los-386, set out
`as notes under section 321 of this title.
`EFFECTIVE DATE OF 2001 AMENDMENT
`Pub. L. 107-56, title III, § 327(a)(2), Oct. 26, 2001, 115
`Stat. 319, as amended by Pub. L. 109-458, title VI,
`§6202(i), Dec. 17, 2004, 118 Stat. 3746, provided that: "The
`amendment made by paragraph (1) (amending this sec(cid:173)
`tion] shall apply with respect to any application sub(cid:173)
`mitted to the Board of Governors of the Federal Re(cid:173)
`serve System under section 3 of the Bank Holding Com(cid:173)
`pany Act of 1956 [12 u.s.a. 1842] after December 31,
`[sic].'"
`
`EFFECTIVE DATE OF 1999 AMENDMENT
`Amendment by Pub. L . 106-102 effective 120 days after
`Nov. 12, 1999, see section 161 of Pub. L . 106-102, set out
`as a note under section 24 of this title.
`EFFECTIVE DATE OF 1994 AMENDMENT
`Amendment by Pub. L. 103-328 effective at end of 1-
`year period beginning on Sept. 29, 1994, see section
`101(e) of Pub. L. 103-328, set out as a note under section
`1828 of this ti tie.
`TERMINATION DATE OF 1980 AMENDMENT
`Amendment by Pub. L. 96-221 repealed on Oct. 1, 1981,
`see section 712(c) of Pub. L . 96-221, set out as a note
`under section 27 of this title.
`EXTENSION OF EMERGENCY ACQillSITION AND NET
`WORTH GUARANTEE PROVISIONS OF PUB. L . 97-320
`No amendment made by section 141(a) of Pub. L .
`97- 320, set out as a note under section 1464 of this title,
`as in effect before Aug. 10, 1987, to any other provision
`of law to be deemed to have taken effect before such
`date and any such provision of law to be in effect as if
`no such amendment had been made before such date,
`see section 509(c) of Pub. L . 100-86, set out as a note
`under section 1464 of this title.
`No amendment made by section 141(a) of Pub. L.
`97-320, set out as a note under section 1464 of this title,
`as in effect on the day before Oct. 8, 1986, to any other
`provision of law to be deemed to have taken effect be(cid:173)
`fore such date and any such provision of law to be in ef(cid:173)
`fect as if no such amendment had taken effect before
`such date , see section 1(c) of Pub. L . 99-452, set out as
`a note under section 1464 of this title.
`Section 141(a) of Pub. L . 97-320, set out as a note
`under section 1464 of this title, as in effect on the day
`after Aug. 27, 1986, applicable as if included in Pub. L .
`97-320 on Oct. 15, 1982, with no amendment made by
`such section to any other provision of law to be deemed
`to have taken effect before Aug. 27, 1986, and any such
`provision of law to be in effect as if no such amendment
`had taken effect before Aug. 27, 1986, see section 1(c) of
`Pub. L. 99-400, set out as a note under section 1464 of
`this title.
`§ 1843. Interests in nonbanking organizations
`(a) Ownership or control of voting shares of any
`company not a bank; engagement in activi(cid:173)
`ties other than banking
`Except as otherwise provided in this chapter,
`no bank holding company shall-
`
`VERSATA EXHIBIT 2051
`SAP v. VERSATA
`CASE CBM2012-00001
`
`

`

`§1843
`
`TITLE 12-BANKS AND BANKING
`
`Page 1190
`
`(1) after May 9, 1956, acquire direct or indi(cid:173)
`rect ownership or control of any voting shares
`of any company which is not a bank, or
`(2) after two years from the date as of which
`it becomes a bank holding company, or in the
`case of a company which has been continu(cid:173)
`ously affiliated since May 15, 1955, with a com(cid:173)
`pany which was registered under the Invest(cid:173)
`ment Company Act of 1940 [15 u.s.a. 80a-1 et
`seq.], prior to May 15, 1955, in such a manner
`as to constitute an affiliated company within
`the meaning of that Act, after December 31,
`1978, or, in the case of any company which be(cid:173)
`comes, as a result of the enactment of the
`Bank Holding Company Act Amendments of
`1970, a bank holding company on December 31,
`1970, after December 31, 1980, retain direct or
`indirect ownership or control of any voting
`shares of any company which is not a bank or
`bank holding company or engage in any ac(cid:173)
`tivities other than (A) those of banking or of
`managing or controlling banks and other sub(cid:173)
`sidiaries authorized under this chapter or of
`furnishing services to or performing services
`for its subsidiaries, and (B) those permitted
`under paragraph (8) of subsection (c) of this
`section subject to all the conditions specified
`in such paragraph or in any order or regula(cid:173)
`tion issued by the Board under such para(cid:173)
`graph: Provided, That a company covered in
`1970 may also engage in those activities in
`which directly or through a subsidiary (i) it
`was lawfully engaged on June 30, 1968 (or on a
`date subsequent to June 30, 1968 in the case of
`activities carried on as the result of the acqui(cid:173)
`sition by such company or subsidiary, pursu(cid:173)
`ant to a binding written contract entered into
`on or before June 30, 1968, of another company
`engaged in such activities at the time of the
`acquisition), and (ii) it has been continuously
`engaged since June 30, 1968 (or such subse(cid:173)
`quent date). The Board by order, after oppor(cid:173)
`tunity for hearing, may terminate the author(cid:173)
`ity conferred by the preceding proviso on any
`company to engage directly or through a sub(cid:173)
`sidiary in any activity otherwise permitted by
`that proviso if it determines, having due re(cid:173)
`gard to the purposes of this chapter, that such
`action is necessary to prevent undue con(cid:173)
`centration of resources, decreased or unfair
`competition, conflicts of interest, or unsound
`banking practices; and in the case of any such
`company controlling a bank having bank as(cid:173)
`sets in excess of $60,000,000 on or after Decem(cid:173)
`ber 31, 1970, the Board shall determine, within
`two years after such date (or, if later, within
`two years after the date on which the bank as(cid:173)
`sets first exceed $60,000,000), whether the au(cid:173)
`thority conferred by the preceding proviso
`with respect to such company should be termi(cid:173)
`nated as provided in this sentence. Nothing in
`this paragraph shall be construed to authorize
`any bank holding company referred to in the
`preceding proviso, or any subsidiary thereof,
`to engage in activities authorized by that pro(cid:173)
`viso through the acquisition, pursuant to a
`contract entered into after June 30, 1968, of
`any interest in or the assets of a going concern
`engaged in such activities. Any company
`which is authorized to engage in any activity
`pursuant to the preceding proviso or sub-
`
`section (d) of this section but, as a result of
`action of the Board, is required to terminate
`such activity may
`(notwithstanding any
`otherwise applicable time limit prescribed in
`this paragraph) retain the ownership or con(cid:173)
`trol of shares in any company carrying on
`such activity for a period of ten years from
`the date on which its authority was so termi(cid:173)
`nated by the Board. Notwithstanding any
`other provision of this paragraph, if any com(cid:173)
`pany that became a bank holding company as
`a result of the enactment of the Competitive
`Equality Amendments of 1987 acquired, be(cid:173)
`tween March 5, 1987, and August 10, 1987, an in(cid:173)
`stitution that became a bank as a result of the
`enactment of such Amendments, that com(cid:173)
`pany shall, upon enactment of such Amend(cid:173)
`ments, immediately come into compliance
`with the requirements of this chapter.
`The Board is authorized, upon application by a
`bank holding company, to extend the two year
`period referred to in paragraph (2) above from
`time to time as to such bank holding company
`for not more than one year at a time, if, in its
`judgment, such an extension would not be det(cid:173)
`rimental to the public interest, but no such ex(cid:173)
`tensions shall in the aggregate exceed three
`years. Notwithstanding any other provision of
`this chapter, the period ending December 31,
`1980, referred to in paragraph (2) above, may be
`extended by the Board of Governors to Decem(cid:173)
`ber 31, 1984, but only for the divestiture by a
`bank holding company of real estate or interests
`in real estate lawfully acquired for investment
`or development. In making its decision whether
`to grant such extension, the Board shall con(cid:173)
`sider whether the company has made a good
`faith effort to divest such interests and whether
`such extension is necessary to avert substantial
`loss to the company.
`(b) Statement purporting to represent shares of
`any company except a bank or bank holding
`company
`After two years from May 9, 1956, no certifi(cid:173)
`cate evidencing shares of any bank holding com(cid:173)
`pany shall bear any statement purporting to
`represent shares of any other company except a
`bank or a bank holding company, nor shall the
`ownership, sale, or transfer of shares of any
`bank holding company be conditioned in any
`manner whatsoever upon the ownership, sale, or
`transfer of shares of any other company except
`a bank or a bank holding company.
`(c) Exemptions
`The prohibitions in this section shall not
`apply to (i) any company that was on January 4,
`1977, both a bank holding company and a labor,
`agricultural, or horticultural organization ex(cid:173)
`empt from taxation under section 501 of title 26,
`or to any labor, agricultural, or horticultural
`organization to which all or substantially all of
`the assets of such company are hereafter trans(cid:173)
`ferred, or (ii) a company covered in 1970 more
`than 85 per centum of the voting stock of which
`was collectively owned on June 30, 1968, and con(cid:173)
`tinuously thereafter, directly or indirectly, by
`or for members of the same family, or their
`spouses, who are lineal descendants of common
`ancestors; and such prohibitions shall not, with
`
`

`

`Page 1191
`
`TITLE 12--BANKS AND BANKING
`
`§1843
`
`respect to any other bank holding company,
`apply to-
`(1) shares of any company engaged or to be
`engaged solely in one or more of the following
`activities: (A) holding or operating properties
`used wholly or substantially by any banking
`subsidiary of such bank holding company in
`the operations of such banking subsidiary or
`acquired for such future use; or (B) conducting
`a safe deposit business; or (C) furnishing serv(cid:173)
`ices to or performing services for such bank
`holding company or its banking subsidiaries;
`or (D) liquidating assets acquired from such
`bank holding company or its banking subsidi(cid:173)
`aries or acquired from any other source prior
`to May 9, 1956, or the date on which such com(cid:173)
`pany became a bank holding company, which(cid:173)
`ever is later;
`(2) shares acquired by a bank holding com(cid:173)
`pany or any of its subsidiaries in satisfaction
`of a debt previously contracted in good faith,
`but such shares shall be disposed of within a
`period of two years from the date on which
`they were acquired, except that the Board is
`authorized upon application by such bank
`holding company to extend such period of two
`years from time to time as to such holding
`company if, in its judgment, such an extension
`would not be detrimental to the public inter(cid:173)
`est, and, in the case of a bank holding com(cid:173)
`pany which has not disposed of such shares
`within 5 years after the date on which such
`shares were acquired, the Board may, upon the
`application of such company, grant additional
`exemptions if, in the judgment of the Board,
`such extension would not be detrimental to
`the public interest and, either the bank hold(cid:173)
`ing company has made a good faith attempt to
`dispose of such shares during such 5-year pe(cid:173)
`riod, or the disposal of such shares during such
`5-year period would have been detrimental to
`the company, except that the aggregate dura(cid:173)
`tion of such extensions shall not extend be(cid:173)
`yond 10 years after the date on which such
`shares were acquired;
`(3) shares acquired by such bank holding
`company from any of its subsidiaries which
`subsidiary has been requested to dispose of
`such shares by any Federal or State authority
`having statutory power to examine such sub(cid:173)
`sidiary, but such bank holding company shall
`dispose of such shares within a period of two
`years from the date on which they were ac(cid:173)
`quired;
`(4) shares held or acquired by a bank in good
`faith in a fiduciary capacity, except where
`such shares are held under a trust that con(cid:173)
`stitutes a company as defined in section
`1841(b) of this title and except as provided in
`paragraphs (2) and (3) of section 1841(g) of this
`title;
`(5) shares which are of the kinds and
`amounts eligible for investment by national
`banking associations under the provisions of
`section 24 of this title;
`(6) shares of any company which do not in(cid:173)
`clude more than 5 per centum of the outstand(cid:173)
`ing voting shares of such company;
`(7) shares of an investment company which
`is not a bank holding company and which is
`not engaged in any business other than invest-
`
`ing in securities, which securities do not in(cid:173)
`clude more than 5 per centum of the outstand(cid:173)
`ing voting shares of any company;
`(8) shares of any company the activities of
`which had been determined by the Board by
`regulation or order under this paragraph as of
`the day before November 12, 1999, to be so
`closely related to banking as to be a proper in(cid:173)
`cident thereto (subject to such terms and con(cid:173)
`ditions contained in such regulation or order,
`unless modified by the Board);
`(9) shares held or activities conducted by
`any company organized under the laws of a
`foreign country the greater part of whose busi(cid:173)
`ness is conducted outside the United States, if
`the Board by regulation or order determines
`that, under the circumstances and subject to
`the conditions set forth in the regulation or
`order, the exemption would not be substan(cid:173)
`tially at variance with the purposes of this
`chapter and would be in the public interest;
`(10) shares lawfully acquired and owned prior
`to May 9, 1956, by a bank which is a bank hold(cid:173)
`ing company, or by any of its wholly owned
`subsidiaries;
`(11) shares owned directly or indirectly by a
`company covered in 1970 in a company which
`does not engage in any activities other than
`those in which the bank holding company, or
`its subsidiaries, may engage by virtue of this
`section, but nothing in this paragraph author(cid:173)
`izes any bank holding company, or subsidiary
`thereof, to acquire any interest in or the as(cid:173)
`sets of any going concern (except pursuant to
`a binding written contract entered into before
`June 30, 1968, or pursuant to another provision
`of this chapter) other than one which was a
`subsidiary on June 30, 1968;
`(12) shares retained or acquired, or activities
`engaged in, by any company which becomes,
`as a result of the enactment of the Bank Hold(cid:173)
`ing Company Act Amendments of 1970, a bank
`holding company on December 31, 1970, or by
`any subsidiary thereof, if such company-
`(A) within the applicable time limits pre(cid:173)
`scribed in subsection (a)(2) of this section (i)
`ceases to be a bank holding company, or (ii)
`ceases to retain direct or indirect ownership
`or control of those shares and to engage in
`those activities not authorized under this
`section; and
`(B) complies with such other conditions as
`the Board may by regulation or order pre(cid:173)
`scribe;
`(13) shares of, or activities conducted by, any
`company which does no business in the United
`States except as an incident to its inter(cid:173)
`national or foreign business, if the Board by
`regulation or order determines that, under the
`circumstances and subject to the conditions
`set forth in the regulation or order, the ex(cid:173)
`emption would not be substantially at vari(cid:173)
`ance with the purposes of this chapter and
`would be in the public interest; or
`(14) shares of any company which is an ex(cid:173)
`port trading company whose acquisition (in(cid:173)
`cluding each acquisition of shares) or forma(cid:173)
`tion by a bank holding company has not been
`disapproved by the Board pursuant to this
`paragraph, except
`that such
`investments,
`whether direct or indirect, in such shares shall
`
`

`

`§1843
`
`TITLE 12-BANKS AND BANKING
`
`Page 1192
`
`not exceed 5 per centum of the bank holding
`company's consolidated capital and surplus.
`(A)(i) No bank holding company shall in(cid:173)
`vest in an export trading company under
`this paragraph unless the Board has been
`given sixty days' prior written notice of such
`proposed investment and within such period
`has not issued a notice disapproving the pro(cid:173)
`posed investment or extending for up to an(cid:173)
`other thirty days the period during which
`such disapproval may be issued.
`(ii) The period for disapproval may be ex(cid:173)
`tended for such additional thirty-day period
`only if the Board determines that a bank
`holding company proposing to invest in an
`export trading company has not furnished
`all the information required to be submitted
`or that in the Board's judgment any mate(cid:173)
`rial information submitted is substantially
`inaccurate.
`(iii) The notice required to be filed by a
`bank holding company shall contain such
`relevant information as the Board shall re(cid:173)
`quire by regulation or by specific request in
`connection with any particular notice.
`(iv) The Board may disapprove any pro(cid:173)
`posed investment only if-
`(I) such disapproval is necessary to pre(cid:173)
`vent unsafe or unsound banking practices,
`undue concentration of resources, de(cid:173)
`creased or unfair competition, or conflicts
`of interest;
`(II) the Board finds that such investment
`would affect the financial or managerial
`resources of a bank holding company to an
`extent which is likely to have a materially
`adverse effect on the safety and soundness
`of any subsidiary bank of such bank hold(cid:173)
`ing company, or
`(III) the bank holding company fails to
`furnish the information required under
`clause (iii).
`(V) LEVERAGE.-The Board may not dis(cid:173)
`approve any proposed investment solely on
`the basis of the anticipated or proposed
`asset-to-equity ratio of the export trading
`company with respect to which such invest(cid:173)
`ment is proposed, unless the anticipated or
`proposed annual average asset-to-equity
`ratio is greater than 20-to-1.
`(vi) Within three days after a decision to
`disapprove an investment, the Board shall
`notify the bank holding company in writing
`of the disapproval and shall provide a writ(cid:173)
`ten statement of the basis for the dis(cid:173)
`approval.
`(vii) A proposed investment may be made
`prior to the expiration of the disapproval pe(cid:173)
`riod if the Board issues written notice of its
`intent not to disapprove the investment.
`(B)(i) The total amount of extensions of
`credit by a bank holding company which in(cid:173)
`vests in an export trading company, when
`combined with all such extensions of credit
`by all the subsidiaries of such bank holding
`company, to an export trading company
`shall not exceed at any one time 10 per cen(cid:173)
`tum of the bank holding company's consoli(cid:173)
`dated capital and surplus. For purposes of
`the preceding sentence, an extension of cred(cid:173)
`it shall not be deemed to include any
`
`amount invested by a bank holding company
`in the shares of an export trading company.
`(ii) No provision of any other Federal law
`in effect on October 1, 1982, relating specifi(cid:173)
`cally to collateral requirements shall apply
`with respect to any such extension of credit.
`(iii) No bank holding company or subsidi(cid:173)
`ary of such company which invests in an ex(cid:173)
`port trading company may extend credit to
`such export trading company or to cus(cid:173)
`tomers of such export trading company on
`terms more favorable than those afforded
`similar borrowers in similar circumstances,
`and such extension of credit shall not in(cid:173)
`volve more than the normal risk of repay(cid:173)
`ment or present other unfavorable features.
`(C) For purposes of this paragraph, an ex(cid:173)
`port trading company-
`(i) may engage in or hold shares of a
`company engaged in the business of under(cid:173)
`writing, selling, or distributing securities
`in the United States only to the extent
`that any bank holding company which in(cid:173)
`vests in such export trading company may
`do so under applicable Federal and State
`banking laws and regulations; and
`(ii) may not engage in agricultural pro(cid:173)
`duction activities or in manufacturing, ex(cid:173)
`cept for such incidental product modifica(cid:173)
`tion including repackaging, reassembling
`or extracting byproducts, as is necessary
`to enable United States goods or services
`to conform with requirements of a foreign
`country and to facilitate their sale in for(cid:173)
`eign countries.
`(D) A bank holding company which invests
`in an export trading company may be re(cid:173)
`quired, by the Board, to terminate its in(cid:173)
`vestment or may be made subject to such
`limitations or conditions as may be imposed
`by the Board, if the Board determines that
`the export trading company has taken posi(cid:173)
`tions in commodities or commodity con(cid:173)
`tracts, in securities, or in foreign exchange,
`other than as may be necessary in the course
`of the export trading company's business op(cid:173)
`erations.
`(E) Notwithstanding any other provision of
`law, an Edge Act corporation, organized
`under section 25(a) 1 of the Federal Reserve
`Act (12 u.s.a. 611-631), which is a subsidiary
`of a bank holding company, or an agreement
`corporation, operating subject to section 25
`of the Federal Reserve Act [12 u.s.a. 601 et
`seq.], which is a subsidiary of a bank holding
`company, may invest directly and indirectly
`in the aggregate up to 5 per centum of its
`consolidated capital and surplus (25 per cen(cid:173)
`tum in the case of a corporation not engaged
`in banking) in the voting stock of2 other
`evidences of ownership in one or more export
`trading companies.
`(F) For purposes of this paragraph-
`(i) the term "export trading company"
`means a company which does business
`under the laws of the United States or any
`State, which is exclusively engaged in ac(cid:173)
`tivities related to international trade, and
`
`1 See References in Text note below.
`z So in original. Probably sbould be "or••.
`
`

`

`Page 1193
`
`TITLE 12--BANKS AND BANKING
`
`§1843
`
`which is organized and operated prin(cid:173)
`cipally for purposes of exporting goods or
`services produced in the United States or
`for purposes of facilitating the exportation
`of goods or services produced in the United
`States by unaffiliated persons by providing
`one or more export trade services.3
`(ii) the term "export trade services" in(cid:173)
`cludes, but is not limited to, consulting,
`international market research, advertis(cid:173)
`ing, marketing, insurance (other than act(cid:173)
`ing as principal, agent or broker in the
`sale of insurance on risks resident or lo(cid:173)
`cated, or activities performed,
`in the
`United States, except for insurance cover(cid:173)
`ing the transportation of cargo from any
`point of origin in the United States to a
`point of final destination outside
`the
`United States), product research and de(cid:173)
`sign, legal assistance, transportation, in(cid:173)
`cluding trade documentation and freight
`forwarding, communication and processing
`of foreign orders to and for exporters and
`foreign purchasers, warehousing, foreign
`exchange, financing, and taking title to
`goods, when provided in order to facilitate
`the export of goods or services produced in
`the United States;
`(iii) the term "bank holding company"
`shall include a bank which (I) is organized
`solely to do business with other banks and
`their officers, directors, or employees; (II)
`is owned primarily by the banks with
`which it does business; and (III) does not
`do business with the general public. No
`such other bank, owning stock in a bank
`described in this clause that invests in an
`export trading company, shall extend cred(cid:173)
`it to an export trading company in an
`amount exceeding at any one time 10 per
`centum of such other bank's capital and
`surplus; and
`(iv) the term "extension of credit" shall
`have the same meaning given such term in
`the fourth paragraph of section 371c 1 of
`this title.
`(G) DETERMINATION OF STATUS AS EXPORT
`TRADING COMPANY.-
`(i) TIME PERIOD REQUIREMENTS.-For pur(cid:173)
`poses of determining whether an export
`trading company is operated principally
`for the purposes described in subparagraph
`(F)(i}-
`(I) the operations of such company dur(cid:173)
`ing the 2-year period beginning on the
`date such company commences oper(cid:173)
`ations shall not be taken into account in
`making any such determination; and
`(II) not less than 4 consecutive years of
`operations of such company (not includ(cid:173)
`ing any portion of the period referred to
`in subclause (I)) shall be taken into ac(cid:173)
`count in making any such determina(cid:173)
`tion.
`(ii) EXPORT REVENUE REQUIREMENTS.-A
`company shall not be treated as operated
`principally for the purposes described in
`subparagraph (F)(i) unless--
`
`•so In original. The period probably should be a semicolon.
`
`(I) the revenues of such company from
`the export, or facilitating the export, of
`goods or services produced in the United
`States exceed the revenues of such com(cid:173)
`pany from the import, or facilitating the
`import, into the United States of goods
`or services produced outside the United
`States; and
`(II) at least 1h of such company's total
`revenues are revenues from the export,
`or facilitating the export, of goods or
`services produced in the United States
`by persons not affiliated with such com(cid:173)
`pany.
`(H) INVENTORY.-
`(i) NO GENERAL LIMITATION.-The Board
`may not prescribe by regulation any maxi(cid:173)
`mum dollar amount limitation on the
`value of goods which an export trading
`company may maintain in inventory at
`any time.
`(ii) SPECIFIC LIMITATION BY ORDER.-Not(cid:173)
`withstanding clause (i), the Board may
`issue an order establishing a maximum
`dollar amount limitation on the value of
`goods which a particular export trading
`company may maintain in inventory at
`any time (after such company has been op(cid:173)
`erating for a reasonable period of time) if
`the Board finds that, under the facts and
`circumstances, such
`limitation is nec(cid:173)
`essary to prevent risks that would affect
`the financial or managerial resources of an
`investor bank holding company to an ex(cid:173)
`tent which would be likely to have a mate(cid:173)
`rially adverse effect on the safety and
`soundness of any subsidiary bank of such
`bank holding company.
`The Board shall include in its annual report to
`the Congress a description and a statement of
`the reasons for approval of each activity ap(cid:173)
`proved by it by order or regulation under such
`paragraph during the period covered by the re(cid:173)
`port.
`(d) Exemption of company controlling one bank
`prior to July 1, 1968
`To the extent that such action would not be
`substantially at variance with the purposes of
`this chapter and subject to such conditions as it
`considers necessary to protect the public inter(cid:173)
`est, the Board by order, after opportunity for
`hearing, may grant exemptions from the provi(cid:173)
`sions of this section to any bank holding com(cid:173)
`pany which controlled one bank prior to July 1,
`1968, and has not thereafter acquired the control
`of any other bank in order (1) to avoid disr