Seal of Board of Governors of the Federal Reserve System 

B OAR D O F G OVERNOR S O F TH E F EDERA L R ESERV E S YSTE M 

WASHINGTON , D C 2055 1 

Septembe r 26 , 201 3 

www.federalreservc.gov 

Mr. Hector Becil 

Managing Director, U.S. Legal Compliance 

The Bank of Nova Scotia 

One Liberty Plaza 

New York, New York 10006 

Dear Mr. Becil: 

This letter responds to your request of May 28, 2013, on behalf of The 

Bank of Nova Scotia ("BNS"), Toronto, Canada, for relief from passivity 

commitments that BNS made to the Board of Governors of the Federal Reserve 

System in connection with its investment in First BanCorp ("FBC"), San Juan, 

Puerto Rico. The requested relief would completely relieve BNS from 

commitments that the Board relied on in determining that BNS would not be able 

to exercise a controlling influence over FBC. 

On August 9, 2007, the Board approved, under section 3 of the Bank 

Holding Company Act ("BHC Act"), 

(Footnote 1. 12 U.S.C. § 1842. See 12 CFR 225.15. End footnote.) 

the application by BNS, a foreign bank that 

is a financial holding company for purposes of the BHC Act, to acquire 10 percent 

of the outstanding voting shares of FBC and, indirectly, its subsidiary bank, 

FirstBank of Puerto Rico, Santurce, Puerto Rico. In addition, the Board approved, 

\ 

under section 4 of the BHC Act, BNS's notice to acquire indirectly FBC's subsidiary savings association, FirstBank Florida, Miami, Florida. (Footnote 2. 12 U.S.C. § 1843. See 12 CFR 225.24. BNS's indirect investments in the nonbank subsidiaries were of FBC and FirstBank Florida, all in Puerto Rico and the U.S. Virgin Islands, Regulation made in accordance with section 4(c)(9) of the BHC Act and section 211.23(f)(1) of K, because these locations were outside the United States for purposes of the International Banking Act and Regulation K. 12 U.S.C. § 3101(7); 12 U.S.C. § 

1843 (c)(9); 12 CFR 211.23(f)( 1) and 211,2(i). End footnote.) At the time of 
its application and notice, BNS agreed to abide by certain commitments of the type 

on which the Board previously has relied in determining that an investing bank 

holding company would not be able to exercise a controlling influence over 

another bank holding company for purposes of the BHC Act. 

Since 2007, FBC has issued additional shares, diluting BNS's 

ownership interest in FBC to 0.3 percent. Based on BNS's de minimis ownership 

of FBC's voting securities, BNS is presumed not to control FBC. In addition, BNS 

does not have the right to appoint a director to the board of directors of FBC or 

have representation on the board. Further, there are no existing or contemplated 

business relationships between the two firms. BNS has also provided written 

representation that it will not exercise or attempt to exercise a controlling influence 

over the management or policies of FBC. 

Based on all the facts of record, the Director of the Division of 

Banking Supervision and Regulation, acting pursuant to authority delegated by the 

Board under section 265.7(a)(2) of the Board's Rules Regarding Delegation of 

Authority (12 CFR 265.7(a)(2)), and after consulting with the General Counsel, 

has approved BNS's request for relief from the passivity commitments it provided 

in connection with BNS's investment in FBC. This action is based on the 

representations and commitments set forth in all of your communications and 

correspondence related to your request, including the representations discussed 

above. Any change in the facts presented could result in a different conclusion and 

should be reported to Board staff immediately. This determination should not be 

construed as granting relief from any other conditions or commitments to which 

BNS may be subject. 

Very truly yours, 

(Signed by) Margaret McCloskey Shanks Deputy Secretary of the Board 

cc: Ivan Hurwitz, Vice President, 

Federal Reserve Bank of New York