BOARD OP GOVERNORS OF TH E FEDERAL RESERVE SYSTEM 

WASHINGTON, DC 20551 

December 11, 2014 

Mr. Sheldon Goldfarb 

General Counsel 

RBS Americas 

600 Washington Boulevard 

Stamford, Connecticut 06901 

Dear Mr. Goldfarb: 

This letter is in response to your request dated August 22, 2014, that the 

Board provide relief from the requirement under Regulation YY that The Royal 

Bank of Scotland pie ("RBS") form a U.S. intermediate holding company by 

July 1, 2016. 1 

Regulation YY requires a foreign banking organization with $50 billion or 

more in U.S. non-branch assets as ofJune 30, 2015, to establish a U.S. 

intermediate holding company and transfer its ownership interest in the substantial 

majority of its U.S. subsidiaries to the intermediate holding company by 

July 1, 2016.2 The Board may extend or accelerate any compliance date in 

Regulation YY if it determines that such extension or acceleration is appropriate. 3 

RBS is a foreign banking organization with an estimated m 

U.S. non-branch assets as ofJune 30, 2014. RBS is executing on its commitments 

under an agreement with Her Majesty's Treasury to divest much of its U.S. 

1 12 CFR 252.152. 

2 Id. 

3 12 CFR 252.3(b). 

www.federalreseeve.gov 
- 2 ­

operations. In particular, RBS has initiated a process to divest its U.S. subsidiary 

bank holding company, Citizens Financial Group ("CFO"). As a result ofthis 

divestiture, RBS expects its U.S. non-branch assets to equal $53.7 billion on 

June 30, 2015, and, following further planned balance sheet reductions for RBS 

Securities, Inc., to be less than $50 billion by March 31, 2016.4 RBS has 

requested relief from Regulation YY's U.S. intermediate holding company 

requirement to avoid the significant expenditures required to come into 

compliance with that requirement, as the firm currently predicts that its U.S. nonbranch assets will fall below $50 billion. 5 

After consideration of all relevant facts, the Board has approved RB S's 

request and has determined to extend Regulation YY's June 30, 2015, assetmeasurement date for the initial applicability ofthe intermediate holding company 

requirement to March 31, 2016.6 RBS will be required to measure its U.S. nonbranch assets as ofthat date, rather than based on the four-quarter average measure 

required by Regulation YY. IfRBS's U.S. non-branch assets are above 

$50 billion on March 31, 2016, RBS will be required to comply with Regulation 

YY's U.S. intermediate holding company requirement by September 30, 2016. 

This action is based on all the facts ofrecord and on all the representations 

and commitments made by you in the submissions to the Board in connection with 

the request. These representations and commitments constitute conditions 

imposed in writing in connection with the findings and decisions herein and, as 

4 A foreign banking organization ceases to be subject to the intermediate holding 

company requirement on the date on which the sum ofthe total consolidated assets 

ofthe top-tier U.S. subsidiaries ofthe foreign banking organization is below $50 

billion for each offour consecutive calendar quarters. 

5 CFO had $130.6 billion in total consolidated assets of as June 30, 2014, and 

separately will be subject to the requirements ofRegulation YY applicable to bank 

holding companies with over $50 billion in total consolidated assets on 

January 1, 2015. 12 CFR part 252, subpart D. 

6 12 CFR 252.152(b)(2). 
- 3 ­

such, may be enforced in proceedings under applicable law. Any material change 

in those facts or representations could affect this approval and should be 

communicated promptly to Board staff. 

Very truly yours, 

(\\~~('()~ 

Margctret McCloskey Shanks 


Deputy Secretary of the Board 


cc: 	 Laura Duhamel Rogers, Central Point of Contact 

Federal Reserve Bank ofBoston