December 16, 2021 

Mr. Andrew Fellingham

Managing Director, Group Head CUSO Liquidity Risk

Sumitomo Mitsui Banking Corporation Americas 

One North Lexington Avenue 

White Plains, New York 10601 

Dear Mr. Fellingham: 

This letter responds to the request by Sumitomo Mitsui Banking Corporation (SMBC), 

Tokyo, Japan, for the Board to determine that Canada Mortgage Bonds (CMBs)1 meet the 

criteria to be highly liquid assets under section 252.157(c)(7)(i)(C) of the Board’s Regulation 

YY2 for purposes of the liquidity buffer that SMBC must maintain for its U.S. branches and 

agencies.

3

Regulation YY requires that a foreign banking organization that has combined U.S. assets 

of $100 billion or more must maintain a liquidity buffer consisting of highly liquid assets for its 

U.S. branches and agencies.4 Highly liquid assets include cash, assets that meet the criteria for 

high-quality liquid assets as defined in section 249.20 of the Board’s Regulation WW,5

 or any 

1

 CMBs are bonds issued by Canada Housing Trust No. 1, a special purpose trust that holds 

mortgage-backed securities issued by the Canada Mortgage and Housing Corporation pursuant to 

the Canadian National Housing Act. See generally Canada Housing Trust No. 1, Canada 

Mortgage Bonds Program User Guide (2018). 

2

 12 CFR 252.157(c)(7)(i)(C)(1)-(3).

3

 12 CFR 252.157(c)(1) and (3).

4

 Id. Similar requirements apply to certain large foreign banking organizations with respect to 

their intermediate holding companies and certain large domestic depository institution holding 

companies with respect to their consolidated organizations. See 12 CFR 252.157(c)(1)-(2) 

(intermediate holding companies of foreign banking organizations); 12 CFR 252.35(b) (bank 

holding companies); and 12 CFR 238.124 (b) (savings and loan holding companies). 

5

 12 CFR 249.20. 
2 

other asset that the foreign banking organization demonstrates to the satisfaction of the Board 

meets the following criteria: 

(1) Has low credit risk and low market risk; 

(2) Is traded in an active secondary two-way market that has 

committed market makers and independent bona fide offers to buy 

and sell so that a price reasonably related to the last sales price or 

current bona fide competitive bid and offer quotations can be 

determined within one day and settled at that price within a 

reasonable time period conforming with trade custom; and 

(3) Is a type of asset that investors historically have purchased in 

periods of financial market distress during which market liquidity 

has been impaired.6

Based on all the facts of record, including the information provided by SMBC and other 

supervisory information, the Director of the Division of Supervision and Regulation, in 

consultation with the General Counsel, acting under authority delegated by the Board,7 has 

granted SMBC’s request.8

This action is based on the specific facts of record and representations in the request and 

in related communications with Board staff. Any material change in these facts or 

representations should be communicated immediately to Board staff and may result in a 

revocation of this determination. 

6

 12 CFR 252.157(c)(7)(i). 

7

 See Board Order Delegating Authority to Make Certain Determinations under Regulation LL 

and Regulation YY, item 1 (Oct. 10, 2019), 

https://www.federalreserve.gov/aboutthefed/boardmeetings/files/delegating-authority-orders20191010.pdf. 

8

 This approval is limited to the determination that SMBC has satisfactorily demonstrated that 

CMBs meet the criteria to be highly liquid assets under section 252.157(c)(7)(i)(C) of Regulation 

YY for purposes of the liquidity buffer that SMBC must maintain for its U.S. branches and 

agencies. SMBC may include CMBs in such liquidity buffer provided the other requirements in 

section 252.157 of Regulation YY are met. 12 CFR 252.157. 
3

Please contact Devyn Jeffereis, Division of Supervision and Regulation, at (202) 452-

2729, or Laura Bain, Legal Division, at (202) 736-5546, if you have any questions.

Very truly yours,

(Signed) Ann E. Misback

Ann E. Misback

Secretary of the Board