Florida Administrative Code › 69 - DEPARTMENT OF FINANCIAL SERVICES › 69U - FSC - Financial Institution Regulation › Chapter 69U-140 - INTERNATIONAL BANKS › Section 69U-140.015 - Capital Equivalency or Asset Maintenance

Current through Reg. 50, No. 138; July 16, 2024
(1) Section
				663.07(1)(a),
				F.S., requires each international bank agency or international branch to
				maintain, with one or more banks insured by the Federal Deposit Insurance
				Corporation and located within the United States, evidence of dollar deposits
				or investment securities of the type that may be held by a state bank for its
				own account pursuant to Section
				658.67, F.S. The aggregate
				amount of dollar deposits and investment securities for an international bank
				agency or international branch shall, at a minimum equal the greater of $4
				million; or 7 percent of the total liabilities of the international bank agency
				or international branch (excluding accrued expenses and amounts due as well as
				other liabilities to affiliated branches, offices, agencies, or
				entities.)
(2) The capital
				equivalency deposits shall be maintained pursuant to a deposit agreement
				between the international banking corporation and the depository bank on Form
				OFR-U-29, Capital Equivalency Deposit Agreement, which shall be available from
				OFR. Funds deposited in investment securities placed in safekeeping at the
				depository bank to satisfy the capital equivalency requirements shall: be
				segregated on the books and records of the depository bank; not be diminished
				in aggregate value, by withdrawal, without the prior approval of OFR; be
				pledged to OFR; and be free from any lien, charge, right of set off, credit or
				preference in connection with any claim of the depository bank against the
				international banking corporation. So long as it continues business in the
				ordinary course, the international banking corporation shall be permitted to
				collect income on the securities and the funds so deposited and will be allowed
				from time to time to exchange such securities. In the event of the voluntary
				closure of the international bank agency or international branch, OFR shall
				determine the time for the release of the capital equivalency dollar deposits
				and investment securities. The time for release shall be based upon a
				determination by OFR that satisfactory arrangements have been made by the
				international banking corporation for the payment of creditors and the
				settlement of depositors of the international bank agency or international
				branch.
(3) Each international bank
				agency or international branch shall maintain a capital equivalency account and
				shall record for each business day the amount of liabilities requiring capital
				equivalency coverage. On the last business day of each month, the average daily
				balance of such liabilities shall be computed. Based on this computation, any
				increase in the dollar deposits or investment securities that may be necessary
				to maintain the minimum capital equivalency amount or capital equivalency ratio
				shall be made within the first seven business days of the following month. If
				an international banking corporation has two or more international bank
				agencies or international branches, the capital equivalency deposits and the
				amount of liabilities requiring capital equivalency coverage shall be
				determined on an aggregate basis.
(4) In lieu of the capital equivalency
				deposit required in Section
				663.07(1),
				F.S., an international bank agency or international branch may elect to hold in
				this state, assets equal to at least $4 million or 107 percent of the amount of
				liabilities (excluding accrued expenses and amounts due as well as other
				liabilities to affiliated branches, offices, agencies, or entities.)
(5) The required amount of assets shall be
				maintained as: cash on hand; deposits or placements with other banks, including
				the total amount of any reserves deposited at the Federal Reserve Bank; cash
				items in process of collection; earning assets such as federal funds sold,
				bonds, notes, debentures, bills of exchange, acceptances, loan participation
				certificates; or other evidences of indebtedness payable in United States funds
				or in funds freely convertible into United States funds. Assets held pursuant
				to this subsection shall exclude accrued income and amounts due from affiliated
				branches, agencies, or offices.
(6)
				Notwithstanding the limitations of Section
				658.67, F.S., an international
				bank agency or international branch is authorized to use securities issued by
				foreign governments, or foreign government sponsored entities, for the purpose
				of satisfying the capital equivalency or asset maintenance requirements of
				Section 663.07, F.S., provided that:
(a) The bonds or other obligations used for
				this purpose are current as to all payments of principal and interest and
				otherwise supported as to investment quality and marketability by a credit
				rating file compiled and maintained in current status;
(b) Performing trade credits, bank credits,
				bonds or other securities in the countries in which these governments or
				government sponsored entities are located are not classified as valued
				impaired, substandard or loss by ICERC; and,
(c) Such securities shall be payable in funds
				freely convertible into United States funds and the amount shall not exceed 25
				percent of the amount required for capital equivalency or asset maintenance
				compliance.