B oard o f G overnors o f the F ederal R eserve S ystem

W a s h i n g t o n , DC 20551

December 8, 2017

Mr. Salvatore P. Palazzolo 

Managing Director and Senior Counsel 

Deutsche Bank AG 

60 Wall Street

New York, New York 10005 

Dear Mr. Palazzolo:

This responds to the request by Deutsche Bank AG (“Deutsche Bank”), 

Frankfurt, Germany, dated April 17, 2017, that the Board permit Deutsche Bank to hold 

its ownership interest in three U.S. subsidiaries (“HFM Subsidiaries”) outside of the 

intermediate holding company (“IHC”) established by Deutsche Bank for purposes of 

compliance with Regulation YY.1

As of June 30, 2015, Deutsche Bank had U.S. non-branch assets in excess 

of $50 billion and is required, under Regulation YY, to hold its entire ownership interest 

in all U.S. subsidiaries under its IHC by July 1, 2017.2

Deutsche Bank indirectly controls the HFM Subsidiaries by virtue of its 

30 percent equity interest in Harvest Fund Management Company Limited (“Harvest”), a 

privately held asset management company organized under the laws of the People’s 

Republic of China (“PRC”).3 Deutsche Bank’s acquisition of its interest in the HFM 

Subsidiaries was approved by the China Securities Regulatory Commission, as required 

under PRC law. In 2008, Harvest formed a wholly owned subsidiary, Harvest Global 

Investments Limited (“HGI”), which is organized under the laws of Hong Kong SAR and 

provides investment management advisory services to a variety of clients primarily

Fotne 1. 12 CFR 252.152(c). Endfote 1.

Fotne 2. 12 CFR 252.152(c)(2)(ii). Endfote 2.

Fotne 3. The remaining 70 percent interest is owned by two PRC-based companies. Endfote 3.
located outside of the PRC. HGI wholly owns the HFM Subsidiaries, which are 

domiciled in the United States. The sole operating company of the HFM Subsidiaries, 

HGI USA, has three employees and engages only in marketing activities for HGI’s 

investment advisory services. The HFM Subsidiaries have, as of year-end 2016, total 

consolidated assets of approximately $4.9 million.

Deutsche Bank represents that it cannot unilaterally transfer the HFM 

Subsidiaries, or its interest in Harvest, to its IHC. Deutsche Bank does not have the 

ability to compel Harvest to sell or otherwise transfer the HFM Subsidiaries to Deutsche 

Bank’s IHC, as it is a minority shareholder of Harvest with limited board representation 

and governance rights, and its partners in the venture are unlikely to consent to the 

transfer.

Exclusion of the HFM Subsidiaries will not have a material impact on the 

regulatory capital or liquidity requirements of Deutsche Bank’s IHC. Granting the 

request would not undermine the supervisory or regulatory goals of the Board and does 

not pose a risk to the financial stability of the U.S. banking or financial system.

Based on all the facts and representations set forth in Deutsche Bank’s 

request and in related correspondence, the Director of the Division of Supervision and 

Regulation, with the concurrence of the Chairman of the Committee on Supervision and 

Regulation and the General Counsel and acting pursuant to authority delegated by the 

Board, has approved Deutsche Bank’s request to not transfer its interest in the HFM 

Subsidiaries to its IHC. Any change in the facts presented could result in a different 

conclusion and should be reported immediately to supervisory staff at the Federal 

Reserve Bank of New York. For purposes of this action, these representations and 

commitments constitute conditions imposed in writing in connection with the findings

and decisions herein and, as such, may be enforced in proceedings under applicable law.4 

This action should not be construed as granting relief from any other conditions, 

commitments, or requirements to which Deutsche Bank may be subject.

Fotne 4. 12U.S.C. § 1818(b). Endfote 4.

Very truly yours,

Signed: Ann E. Misback 

Secretary of the Board