BOAR D O F GOVERNOR S O F TH E FEDERA L RESERV E SYSTE M 

WASHINGTON , D C 2055 1 

DECEMBER 11 , 201 4 

Mr. Edward B. Pollock 

Executive Vice President 

Head of Regulatory Relationships & Government Affairs 

The Toronto-Dominion Bank 

1701 Route 70 East 

Cherry Hill, New Jersey 08034 

Dear Mr. Pollock: 

This is in response to your request, dated July 16, 2014, that the 

Board permit The Toronto-Dominion Bank, Toronto, Canada ("TD") to directly 

hold its ownership interest in TD Ameritrade Holding Corporation ("TD 

Ameritrade"), a Delaware corporation, and not to transfer its ownership interest in 

TD Ameritrade to a U.S. intermediate holding company formed for purposes of 

compliance with Regulation Y Y. 

Regulation YY requires a foreign banking organization with 

$50 billion or more in U.S. non-branch assets as of June 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. 

1 Under Regulation YY, the Board may permit the foreign 

banking organization not to transfer its ownership interest in a U.S. subsidiary, 

after considering whether applicable law would prohibit the foreign banking 

organization from owning or controlling the U.S. subsidiary through a single U.S. 

intermediate holding company or whether circumstances otherwise would warrant 

an exception based on the foreign banking organization's activities, scope of 

operations, structure, or similar considerations. 

2 

TD is a foreign banking organization with approximately 

billion in total U.S. non-branch assets as of June 30, 2014. Assuming that 

1

 12 CFR 252.153. 2

 12 CFR 252.153(c)(2). 

WWW.FEDERALRESERVE.GOV 
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TD's U.S. non-branch assets will exceed $50 billion on June 30, 2015, it will t 

required to form or designate a U.S. intermediate holding company under 

Regulation YY. 

TD Ameritrade is a publicly traded broker-dealer registered with the 

Securities and Exchange Commission. TD is currently the largest shareholder of 

TD Ameritrade, with an ownership stake of 40.4 percent. TD is prohibited by 

agreement from owning more than 45 pcrcent of TD Ameritrade's common stock. 

3 

TD argues that because of its limited minority interest in TD Ameritrade, TD 

would only be able to employ investment level (rather than integrated operational 

level) risk and liquidity management, stress testing and capital planning processes 

for its investment in Ameritrade, regardless of whether TD Ameritrade were held 

by TD's U.S. intermediate holding company. In support of its request, TD argues 

that (1) it lacks actual control over TD Ameritrade and does not consolidate TD 

for accounting purposes, (2) the transfer could cause a potential impediment to 

recovery and resolution planning, (3) TD would incur substantial capital costs, and 

(4) allowing TD Ameritrade to remain outside of its intermediate holding 

company would not increase systemic risk. 

After consideration of all relevant facts, including TD's activities, 

scope of operations, structure, and similar considerations, the Board has denied 

TD's request for an exemption from Regulation YY's requirement to transfer its 

ownership interest in TD Ameritrade to its U.S. intermediate holding company. 

The purpose of Regulation YY's requirement is to provide a single platform for 

the application of prudential standards and for the Board's supervision of the U.S. 4 operations of a foreign banking organization.' Although TD does not consolidate 

TD Ameritrade on its balance sheet for accounting purposes, TD has "control" 

over TD Ameritrade for purposes of the Bank Holding Company Act and has 

significant influence over TD Ameritrade's operations. 

5 Furthermore, TD 

Ameritrade has a number of significant interactions with TD's U.S. operations. 

For instance, they are partners to a deposit sweep agreement which represents a 

significant and ongoing interaction that provides a material amount of deposits to 

TD's two U.S. banks. They also share intellectual property and branding. 

3

 These shares are owned by TD Luxembourg International Holdings S.A.R.L., a 

direct subsidiary of TD. 4

 79 Fed. Reg. 17240, 17274 (March 27, 2014). 5

 12U.S.C. 1841(a)(2). TD is the largest shareholder, owning 40.4 percent of the 

shares of common stock, and it appoints five of TD Ameritrade's 12 directors. 
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Requiring TD to hold its interest in TD Ameritrade through its 

intermediate holding company will help ensure that TD holds sufficient capital in 

the United States, and has established an appropriate risk-management framework, 

to account for the risks to its U.S. operations associated with its investment in TD 

Ameritrade. 6 This, in turn, should facilitate resolution by ensuring strong ex ante 

capital and liquidity buffers in the United States. 

For the reasons stated above, the Board has denied TD's request for 

an exemption from Regulation YY's requirement to transfer its ownership interest 

in TD Ameritrade to its U.S. intermediate holding company. 

Very truly yours, 

Margaret McCloskey Shanks 

Deputy Secretary of the Board 

cc: Barbara Gorzkowski 

Federal Reserve Bank of New York 

 Under the Board's regulatory capital framework, TD's U.S. intermediate 

holding company would be required to hold additional capital to reflect its 

exposure to TD Ameritrade, which is an unconsolidated financial institution. See 

12 CFR 217.22(d). In the preamble to its adoption of Regulation YY, the Board 

noted that exemption requests where the principal goal or effect would be to 

reduce capital requirements as applied to an intermediate holding company would 

be unlikely to be approved. See 79 Fed. Reg. 17240 17275 (March 27, 2014). 

6