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The approval permits the bank to purchase certain assets from affiliated broker-dealers while addressing restrictions on covered transactions between banks and affiliates. The letter specifies quantitative constraints and operational conditions, including investment-grade eligibility, fair market value pricing, repurchase of low-quality assets, parent reimbursement, and ongoing well-capitalized status. The exemption expires one week after issuance and may be revoked for noncompliance.",{"@graph":63,"@context":118},[64,80,101],{"@type":65,"itemListElement":66},"BreadcrumbList",[67,71,74,77],{"item":68,"name":69,"@type":70,"position":9},"https://docshare.wps.com","Home","ListItem",{"item":72,"name":10,"@type":70,"position":73},"https://docshare.wps.com/template/",2,{"item":75,"name":41,"@type":70,"position":76},"https://docshare.wps.com/template/letters/",3,{"item":78,"name":59,"@type":70,"position":79},"https://docshare.wps.com/template/federal-reserve-board-letter-of-exemption-from-section-23a-and-regulation-w-march-18-2020-final-approval-letter/280230/",4,{"url":78,"name":59,"@type":81,"image":82,"author":87,"headline":59,"publisher":90,"fileFormat":93,"inLanguage":57,"description":61,"dateModified":94,"datePublished":95,"encodingFormat":93,"isAccessibleForFree":96,"interactionStatistic":97},"DigitalDocument",{"url":83,"@type":84,"width":85,"height":86},"https://docshare.wps.com/thumbnails/federal-reserve-board-letter-of-exemption-from-section-23a-and-regulation-w-march-18-2020-final-approval-letter/280230.png","ImageObject",442,249,{"name":88,"@type":89},"Elsa","Person",{"url":68,"name":91,"@type":92},"DocShare","Organization","application/pdf","2026-10-19","2026-09-16",true,{"@type":98,"interactionType":99,"userInteractionCount":8},"InteractionCounter",{"@type":100},"ViewAction",{"@type":102,"mainEntity":103},"FAQPage",[104,110,114],{"name":105,"@type":106,"acceptedAnswer":107},"What exemption is granted in the letter on March 18, 2020?","Question",{"text":108,"@type":109},"The Board grants a bank an exemption from section 23A of the Federal Reserve Act and the Board’s Regulation W to allow the bank to purchase certain assets from affiliated broker-dealers.","Answer",{"name":111,"@type":106,"acceptedAnswer":112},"Which transactions are considered “covered transactions” under section 23A and Regulation W?",{"text":113,"@type":109},"“Covered transactions” include purchases of assets from an affiliate, extensions of credit to an affiliate, guarantees on behalf of an affiliate, and other transactions defined under the statute and regulation.",{"name":115,"@type":106,"acceptedAnswer":116},"What conditions must be met for the exemption to apply?",{"text":117,"@type":109},"The letter requires purchases only from a SEC-registered broker-dealer affiliate, that assets be investment grade, that purchases occur at fair market value via a reliable third-party service, and that the dealer or parent repurchase low-quality assets, reimburse losses, and maintain well-capitalized status.","https://schema.org",{"og:url":78,"og:type":120,"og:title":59,"og:site_name":91,"og:description":61},"article",{"robots":122,"canonical":78},"index,follow",{"doc_id":124,"site_id":56},280230,1790203225,{"code":4,"msg":5,"data":127},{"doc_id":124,"user_id":128,"nickname":88,"user_avatar":129,"doc_module":9,"category_id":40,"category_name":41,"doc_title":59,"doc_description":61,"doc_content":130,"file_id":131,"file_url":132,"file_type":133,"file_size":134,"view_count":8,"is_deleted":4,"is_public":9,"is_downloadable":9,"audit_status":9,"page_count":76,"language":135,"language_code":57,"site_id":56,"html_lang":57,"table_of_contents":136,"faqs":137,"seo_title":138,"seo_description":61,"update_tm":139,"read_time":9},137455077381,"https://ap-avatar.wpscdn.com/davatar_994ba38a5ba835b3df7d355c54d3ed8d","March 18 , 2020  \n[ ]  \nDear [ ] :  \nPursuant to this letter, the Director of the Division of Supervision and Regulation, acting under authority delegated by the Board, with the concurrence of the General Counsel, has granted [ ] (“Bank”),  \n[ ], an exemption from section 23A of the Federal Reserve Act  \nand the Board’s Regulation W to allow Bank to purchase certain assets from affiliated broker-dealers (the “Dealers”) .  \nSection 23A and Regulation W limit the aggregate amount of“covered transactions” between a bank and any single affiliate to 10 percent of the bank’s capital stock and surplus, and limit the aggregate amount of covered transactions between a bank and all its affiliates to 20 percent of the bank ’s capital stock and surplus.1 “Covered transactions” include the purchase of assets by a bank from an affiliate, the extension of credit by a bank to an affiliate, the issuance of a guarantee by a bank on behalf of an affiliate, and certain other transactions.2 The statute and regulation also require a bank to secure its extensions of credit to, and guarantees on behalf of, affiliates with prescribed amounts of collateral.3  \nA purchase of assets by Bank from the Dealers would be a covered transaction under section 23A and Regulation W. Dealers are affiliates ofthe Bank for purposes of section 23A and Regulation W because they are under common control of [ ] .  \nSection 23A specifically authorizes the Board to exclude, by order, from the definition of “covered transaction” the purchase of certain assets from a  \n1 12 U. S.C. § 371c(a)(1); 12 CFR 223.11 and 223.12.  \n2 12 U. S.C. § 371c(b)(7); 12 CFR 223 .3(h) .  \n3 12 U. S.C. § 371c(c); 12 CFR 223.14.  \nmember bank’s affiliated broker-dealers, subject to the limitations and conditions described below.4  \nThe exemption from the quantitative limits of section 23A and Regulation W would be subject to the following limits and conditions:  \n􀁸 Bank may only purchase assets from a broker-dealer affiliate that is registered with the Securities and Exchange Commission.  \n􀁸 All assets purchased by Bank must meet the definition of “investment grade”as defined in the Board’s Regulation Q (12 CFR 217.2) .  \n􀁸 Bank must purchase the assets at fair market value as determined by a reliable third-party pricing service.  \n􀁸 Dealer or parent holding company must agree to repurchase from Bank, on a quarterly basis, any assets that become low-quality assets (as defined in Regulation W (12 CFR 223.3(v))) at the price paid by Bank for the assets plus any accrued but unpaid interest.  \n􀁸 Bank’s ultimate parent holding company must agree to reimburse Bank promptly for any losses sustained by Bank in connection with the purchased assets.  \n􀁸 Bank and its ultimate parent holding company must remain “well capitalized” as defined in the Board’s Regulations H and Y, respectively.5  \n􀁸 The exemption would expire one week from the date of this letter. After that date, any assets purchased by Bank pursuant to this exemption could remain with Bank and would not count towards Bank’s 23A quantitative limits.  \nIn light of these considerations, the exemption for the proposed  \ncovered transactions between Bank and the Dealers appears to be consistent with the purposes of section 23A and in the public interest. Accordingly, the exemption  \n4 12 U. S.C. § 371c(b)(7)(C) .  \n5 See 12 CFR 208 .43(b)(1) and 225 .2(r) .  \nis hereby issued, subject to the conditions and limits discussed above. The FDIC and OCC have been informed of this action.  \nThis exemption is specifically conditioned on compliance by  \n[ ] and Bank with all the conditions in this letter. Non  \ncompliance with these conditions may result in revocation of the exemption.  \nVery truly yours,  \n(Signed) Ann E. Misback  \nAnn E. Misback  \nSecretary of the Board  \ncc: Ricardo Delfin, Director, Division of Complex Institution Supervision & Resolution, Federal Deposit Insurance Corporation  \nNicholas Podsiadly, General Counsel, Federal Deposit Insura","cbCaif7RmHz6bbyc","https://ap.wps.com/l/cbCaif7RmHz6bbyc","pdf",168382,"English","# March 18, 2020 exemption letter\n## Basis and scope of the exemption\n## Covered transactions and statutory limits\n## Conditions and limits for asset purchases\n## Expiration, compliance, and issuance","[{\"question\":\"What exemption is granted in the letter on March 18, 2020?\",\"answer\":\"The Board grants a bank an exemption from section 23A of the Federal Reserve Act and the Board’s Regulation W to allow the bank to purchase certain assets from affiliated broker-dealers.\"},{\"question\":\"Which transactions are considered “covered transactions” under section 23A and Regulation W?\",\"answer\":\"“Covered transactions” include purchases of assets from an affiliate, extensions of credit to an affiliate, guarantees on behalf of an affiliate, and other transactions defined under the statute and regulation.\"},{\"question\":\"What conditions must be met for the exemption to apply?\",\"answer\":\"The letter requires purchases only from a SEC-registered broker-dealer affiliate, that assets be investment grade, that purchases occur at fair market value via a reliable third-party service, and that the dealer or parent repurchase low-quality assets, reimburse losses, and maintain well-capitalized status.\"}]","Federal Reserve Board Letter of Exemption from Section 23A and Regulation W - March 18, 2020 - Final Approval Letter | PDF",1789535289]