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Application to Establish, Maintain, or Use a Representative Office in New York State

Please refer to the Department's Application Fee Schedule to determine the proper fee for the application being filed.


The statutory requirements for such a license are specified in Article V-B of the New York Banking Law, as amended. The law requires licensing of all foreign banking corporations wishing to establish a representative office. Section 221-d of the statute requires that the Superintendent of Financial Services be satisfied "that the financial responsibility, experience, character, and general fitness of the foreign banking corporation and its representative are such as to command the confidence of the community and to warrant belief that the representative will operate honestly, fairly and efficiently . . ." Additional factors considered by the Superintendent in connection with the licensing of representative offices may be found in Supervisory Procedure FB 1.

The application requirements are set forth in Supervisory Procedure FB 102 and Form FB-102.

The applicant must maintain policies and procedures designed to ensure and monitor compliance with the Bank Secrecy Act (BSA) as amended by the USA PATRIOT Act and the anti-money laundering programs of Part 115 of the General Regulations of the Banking Board. A compliance program must include, at a minimum, a system of internal controls to assure ongoing compliance, independent testing for compliance to be conducted by bank personnel or by an outside party, the designation of an individual or individuals responsible for coordinating and monitoring day-to-day compliance, and training for appropriate personnel.

We believe you will find it helpful to discuss your proposal with us prior to the preparation of a formal application. Should you care to proceed in this manner, we would be pleased to arrange a mutually convenient time for a meeting. Please contact our Applications Unit at (212) 709-1540.


NYL - ARTICLE V-B -- LICENSE FOR A FOREIGN BANKING CORPORATION TO MAINTAIN A REPRESENTATIVE OFFICE

Section
221-a. Doing business without license prohibited.
221-b. Definitions.
221-c. Application for license; fees.
221-d. Conditions precedent to issuing license; procedure where application denied.
221-e. License provisions.
221-f. Grounds for suspension or revocation of license; procedure.
221-g. Superintendent authorized to examine; expenses.
221-h. Licensee's books and records; reports.
221-i. Notice of acquisition of control or merger.
221-j. Authority of superintendent.
221-k. Separability of provisions.

NYL - § 221-a. Doing business without license prohibited.

1. No person, co-partnership, association, corporation or other entity shall establish, maintain or use one or more offices in this state as the representative of one or more foreign banking corporations unless the foreign banking corporation to be represented has first obtained a license from the superintendent of Financial Services. Entities lawfully registered pursuant to this article on or before September first, nineteen hundred ninety-two shall be deemed licensed pursuant to this section until September first, nineteen hundred ninety-four, provided however that the superintendent may require the submission of any additional documents or materials relating to the business activities of the registrant as he or she may deem necessary or appropriate.

2. Upon receipt of a license, the foreign banking corporation may establish one or more representative offices in this state which shall be subject to examination whenever in the superintendent's judgment such examination is necessary or advisable.

3. Such office shall be limited to conducting the following activities: solicitation of loans and in connection therewith, assembly of credit information, making of property inspections and appraisals, securing of title information, preparation of applications for loans including making recommendations with respect to action thereon, solicitation of investors to purchase loans from the bank, the search for such investors to contract with the bank for the servicing of such loans; solicitation of new business and conduct of research. Any other activity which the foreign banking corporation seeks to conduct at such office, shall be subject to the prior written approval of the superintendent by general regulation or upon application in such form as the superintendent may prescribe.

NYL - § 221-b. Definitions.

  1. Banking institution. The term "banking institution", when used in this article, shall mean any entity authorized by its charter to accept deposits and to make loans.
  2. Foreign banking corporation. The term "foreign banking corporation", when used in this article, shall mean any banking institution organized under the laws of any jurisdiction other than the United States, any state of the United States or Puerto Rico.
  3. Representative. The term "representative" shall mean any person or entity engaging in any activity in this state for or on behalf of a foreign banking corporation, provided that such activity is not otherwise permitted by law.
  4. The superintendent shall be authorized to exempt from the above definitions such additional persons, entities, activities or classes thereof which shall be deemed appropriate in order to effectuate the purposes of this article.

NYL - § 221-c. Application for license; fees.

The application for such license shall be in writing under oath and shall contain the information required by and be in the form prescribed by the superintendent. As part of the application, the foreign banking corporation shall appoint the superintendent or his or her successor as agent for service of process in connection with any action or proceeding against the foreign banking corporation relating to any cause of action which may arise out of a transaction with its representative office, with the same force and effect as if it were a domestic corporation and had been lawfully served with process in this state. At the time of making such application, the applicant shall pay to the superintendent as an investigation fee the sum of two hundred fifty dollars.

NYL - § 221-d. Conditions precedent to issuing license; procedure where application denied.

Upon the filing of an application for a license, if the superintendent shall find that the financial responsibility, experience, character, and general fitness of the foreign banking corporation and its representative are such as to command the confidence of the community and to warrant belief that the representative will operate honestly, fairly, and efficiently within the purpose and intent of this article, a license shall thereupon be issued in duplicate to conduct the activity described in section 221-a of this article in accordance with the provisions of this article. If the superintendent shall not so find, the license shall not be issued, and the applicant shall be notified of the denial. The superintendent shall transmit one copy of such license to the applicant and file another in the office of the Department of Financial Services. Such license shall remain in full force and effect until it is surrendered by the licensee or revoked or suspended as hereinafter provided. The superintendent shall approve or deny every application for a license hereunder within ninety days from the filing thereof provided, however, that failure to act within the prescribed period shall not be deemed approval of any such application.

NYL - § 221-e. License provisions.

Each license issued under this article shall state the address or addresses at which a representative is to be located and shall state fully the name of the licensee. Such license shall not be transferable or assignable. In the event the location of the representative shall be changed, the licensee shall forthwith notify the superintendent who shall thereupon without charge attach to the license an amendment certificate setting forth such changed location.

NYL - § 221-f. Grounds for suspension or revocation of license; procedure.

  1. The superintendent may revoke any license issued hereunder if it shall be found that:
    • (a) The licensee or its representative has violated any provision of this article, or of any rule or regulation made by the superintendent under and within the authority of this article or of any other law, rule or regulation of this state.
    • (b) Any fact or condition exists which, if it had existed at the time of the original application for such license, would have warranted the superintendent in refusing originally to issue such license.
  2. The superintendent may, on good cause shown, suspend any license for a period not exceeding thirty days, pending investigation.
  3. Except as provided in subdivision two of this section, no license shall be revoked or suspended except after notice and a hearing thereon.
  4. Any licensee may surrender any license by delivering to the superintendent written notice that it thereby surrenders such license, but such surrender shall not affect such licensee's civil or criminal liability for acts committed prior to such surrender.
  5. Every license issued hereunder shall remain in force and effect until the same shall have been surrendered, revoked or suspended in accordance with the provisions of this article, but the superintendent shall have authority to reinstate a suspended license or to issue a new license to a licensee whose license shall have been revoked if no fact or condition then exists which would have warranted the superintendent in refusing originally to issue such license under this article.
  6. Whenever the superintendent shall revoke or suspend a license issued pursuant to this article, a written order shall be immediately executed in duplicate to that effect. The superintendent shall file one copy of such order in the office of the department and shall forthwith serve the other copy upon the licensee. Any such order may be reviewed in the manner provided by article seventy-eight of the civil practice law and rules. Such application for review as authorized by this section must be made within thirty days from the date of such order of suspension or revocation.

NYL - § 221-g. Superintendent authorized to examine; expenses.

For the purpose of discovering violations of this article or securing information lawfully required by him hereunder, the superintendent may at any time, and as often as may be determined, either personally or by a person duly designated by him, investigate the activities of representatives of licensees and examine the books, accounts, records, and files used in relation to those activities. For that purpose the superintendent and a duly designated representative (i) shall have free access to the offices, books, accounts, papers, records, files, safes and vaults of licensees and their representatives, and (ii) shall have authority to require the attendance of and to examine under oath all persons whose testimony may be required relative to the activities of a representative. The expenses incurred in making any examination pursuant to this section shall be assessed against and paid by the licensee so examined, except that traveling and subsistence expenses so incurred shall be charged against and paid by licensees in such proportions as the superintendent shall deem just and reasonable, and such proportionate charges shall be added to the assessment of the other expenses incurred upon each examination. Upon written notice by the superintendent of the total amount of such assessment, the licensee shall become liable for and shall pay such assessment to the superintendent.

NYL - § 221-h. Licensee's books and records; reports.

A foreign banking corporation licensed pursuant to this article shall keep or cause each of its representatives to keep and use such books, accounts and records as will enable the superintendent to determine whether the representative is complying with the provisions of this article and with the rules and regulations lawfully made by the superintendent. Such books, accounts and records shall be preserved for at least three years; provided however, that preservation by photographic reproduction thereof or records in photographic form shall constitute compliance with the requirements of this section.

The superintendent may require such regular or special reports as may be deemed necessary to the proper supervision of licensees under this article. Such additional reports shall be in the form prescribed by the superintendent and shall be subscribed and affirmed as true under the penalties of perjury.

NYL - § 221-i. Notice of acquisition of control or merger.

1. A foreign banking corporation licensed pursuant to this article to maintain a representative office in this state shall file with the superintendent a notice, in such form and containing such information as the superintendent may prescribe, no later than fourteen calendar days after such foreign banking corporation becomes aware of any acquisition of control of such corporation or merges with another foreign banking corporation.

2. Control, for purposes of this section, means any person or entity, or group of persons or entities acting in concert, directly or indirectly, owning, controlling, or holding with power to vote, twenty-five percent or more of any class of voting stock of such foreign banking corporation, or having the ability in any manner to elect a majority of the directors of such foreign banking corporation, or otherwise exercising a controlling influence over the management and policies of such foreign banking corporation as defined by the superintendent by regulation.

NYL - § 221-j. Authority of superintendent.

The superintendent is hereby authorized and empowered to promulgate, in addition hereto and not inconsistent herewith, such general rules and regulations, definitions, and such specific rulings, demands and findings as may be deemed necessary for the proper conduct of the business authorized and licensed hereunder and for the enforcement of this article.

NYL - § 221-k. Separability of provisions.

If any provision of this article, or the application of such provision to any person, entity or circumstance, shall be held invalid, the remainder of the article, and the application of such provision to persons, entities or circumstances other than those as to which it is held invalid, shall not be affected thereby.

NYR - FB 1 -- SUPERVISORY POLICY
(Statutory authority: Banking Law, §§ 14 (1), 26, 200) Sec.
1.1 General statement
1.2 General standards

NYR - 1.1 General statement.

No foreign banking corporation shall be granted a license to establish and maintain a branch, agency or representative office in this State, unless the superintendent shall have found that:

(a) the proposed branch, agency or representative office will promote the public convenience and advantage; and

(b) the character, responsibility and general fitness of the foreign banking corporation, its principal shareholders, its management and the person (s) designated to represent such foreign banking corporation are such as to command confidence and warrant belief that the business of such foreign banking corporation will be honestly and efficiently conducted in accordance with the intent and purpose of the New York Banking Law.

NYR - 1.2 General standards.

(a) In acting on any application to establish and maintain a branch or agency in this state under Banking Law section 26, or a representative office in this state under Banking Law section 221-c, the superintendent shall consider the following factors:

1. the economic and political stability of the home country of the foreign banking corporation;

2. the degree to which the foreign banking corporation and any foreign bank of which the foreign banking corporation is a subsidiary is subject to comprehensive supervision and regulation on a consolidated basis by the home country authorities;

3. whether adequate information will be made available initially on a continuing basis to the department on the operations and activities of the foreign banking corporation and its affiliates;

4. the financial strength and resources of the foreign banking corporation (including compliance with international capital guidelines as promulgated by the Bank for International Settlements, the applicant's projected capital position, the history of the applicant's operating performance, and its future prospects);

5. the integrity, competence and experience (including experience in international banking) of the management and principal shareholders of the foreign banking corporation and the person (s) designated to represent such foreign banking corporation;

6. the supervisory evaluations of the foreign banking corporation by other regulatory authorities;

7. the size and significance of the foreign banking corporation in relation to other banking corporations in its home country and worldwide; and

8. any other factors the superintendent deems relevant.

(b) In applying the criteria listed in paragraph (a) above to an application by a foreign banking corporation to establish and maintain a representative office, the superintendent may take into account the limited nature of the activities that shall be conducted through such representative office.

NYR - FB 2 -- REPRESENTATIVE OFFICES OF FOREIGN BANKING CORPORATIONS
(Statutory authority: Banking Law §221-a) Sec:
2.1 General.
2.2 Definitions.
2.3 Permissible activities.
2.4 Other activities.
2.5 Prior notice for regional administrative offices.
2.6 Prior notice for foreign banking corporations with branch or agency.
2.7 Exemption from licensing and prior notice procedure for establishment of office performing limited administrative function.

NYR - 2.1 General.

No foreign banking corporation may establish, maintain or use a representative office in this State without having first obtained a license from the superintendent. Representative offices of foreign banking corporations that were lawfully registered under Article V-B of the Banking Law on or before September 1, 1992 shall be required to obtain a license from the Superintendent to maintain such representative office prior to September 1, 1994.

NYR - 2.2 Definitions.

For purposes of this Supervisory Policy,

NYR - 2.3 Permissible activities.

(a) The activities that may be conducted by a representative office of a foreign banking corporation in this State on behalf of such foreign banking corporation shall be limited to the following:

  1. solicitation of loans in principal amounts of $250,000 or more and, in connection therewith, assembly of credit information, making of property inspections and appraisals, securing of title information, preparation of applications for loans (including making recommendations with respect to action thereon);
  2. solicitation of purchasers of loans from the foreign banking corporation;
  3. solicitation of parties to contract with the foreign banking corporation for the servicing of its loans;
  4. solicitation of other banking business on behalf of the foreign banking corporation, except for solicitation of deposits or deposit-type liabilities;
  5. conduct of research;
  6. acting as liaison with customers of the foreign banking corporation;
  7. acting as liaison with correspondents of the foreign banking corporation;
  8. execution of loan documents for loans in principal amounts of $250,000 or more pursuant to specific written authorization with respect to each such loan;
  9. in the case of regional administrative offices, manage, supervise or coordinate the operations of the foreign bank or its affiliates, if any, in a particular geographic region, including credit approvals; and
  10. any other activity approved in writing by the Superintendent.

NYR - 2.4 Other activities.

A foreign banking corporation seeking written approval of the superintendent to engage in an activity not listed in Section 2.3(a)(l)-(9), or otherwise prohibited under Section 2.3(b), of this Supervisory Policy shall submit a letter application to the Superintendent setting forth a description of the proposed activity and a detailed explanation of why the representative office should be permitted to engage in such activity.

NYR - 2.5 Prior notice for regional administrative offices.

A foreign banking corporation may, unless otherwise advised by the superintendent, obtain a license to establish a regional administrative office in this state with 45 days' prior written notice to the Superintendent. If a foreign banking corporation maintaining a licensed branch, agency, Article XII investment company or bank in this state is performing a regional administrative office function on the same or contiguous premises as the licensed or chartered entity of the foreign banking corporation, the foreign banking corporation shall provide written notice to the Superintendent of such fact and the particular regional administrative office functions performed and shall identify relevant regional office personnel. No separate license for those regional administrative office functions will be issued, unless the regional administrative office functions are either held out by the foreign banking corporation or determined by the Superintendent to be separate from the other functions taking place on the premises. The foreign banking corporation shall notify the superintendent within 45 days of any change in regional administrative functions or personnel.

NYR - 2.6 Prior notice for foreign banking corporations with branch or agency.

A foreign banking corporation which maintains a New York state-licensed branch or agency may, unless otherwise advised by the Superintendent, obtain a license to establish a representative office in this state with 45 days' prior written notice to the Superintendent.

NYR - 2.7 Exemption from licensing and prior notice procedure for establishment of office performing limited administrative function.

Unless otherwise advised by the Superintendent, a foreign banking corporation not otherwise maintaining a licensed branch or agency in this state may, with 45 days prior written notice to the superintendent, establish a place of business of the foreign banking corporation in this state at which location the foreign banking corporation engages solely in limited administrative functions (such as back office support systems) in connection with its banking activities that do not involve contact or liaison with customers or potential customers. Unless otherwise advised by the Superintendent, if a foreign banking corporation already maintains a licensed
branch or agency in this state it may establish an office that engages solely in limited administrative functions in connection with its banking activities that do not involve contact or liaison with customers or potential customers (such as back office support systems), by notifying the Superintendent within 45 days of establishing such office.

NYR - FB 102 -- APPLICATION BY A FOREIGN BANKING CORPORATION FOR A LICENSE TO ESTABLISH OR MAINTAIN A REPRESENTATIVE OFFICE

(Statutory authority: Banking Law §221-c) Sec:
102.1 General information
102.2 Prior consultation
102.3 Information and documents requested
102.4 Prior notice for regional administrative offices
102.5 Foreign banking corporations with branch or agency
102.6 Notice for establishment of an office performing limited administrative functions

NYR - 102.1 General information.
A foreign banking corporation seeking a license under Banking Law, Article V-B and Supervisory Policy FB2, to establish, maintain or use a representative office in New York State shall submit to the Superintendent an application on Form FB-102, or written notification as appropriate, containing the information and documents required by section 102.3 of this Supervisory Procedure, or written notification as appropriate, accompanied by a check for [please refer to the Department's Application Fee Schedule].

NYR - 102.2 Prior consultation.

Preparation of the application on Form FB-l02 will be facilitated by prior consultation between the applicant and representatives of the Department of Financial Services.

NYR - 102.3 Information and documents requested.

A foreign banking corporation seeking a license to establish or maintain a representative office must submit the following information and documents:

(1) brief history of the foreign banking corporation;

(2) ranking by asset size in the home country;

(3) number of offices in the home country;

(4) description of organization structure of the foreign banking corporation (including shareholders directly or indirectly owning or controlling 10% or more of the capital stock of the applicant, its affiliates and any agencies, branches or representative offices of the applicant in the United States and other countries);

(5) description of management structure, including board of directors and principal officers of the foreign banking corporation;

(6) description of the business of the foreign banking corporation;

(1) a consolidated statement of the applicant's financial condition as of a date within 90 days prior to the date of application, certified by the applicant's chief executive or financial officer;

(2) audited consolidated financial statements, including statements of income and expense, for the applicant's latest three fiscal years or for the period that applicant has been in business if less than three years, certified by the applicant's chief executive or financial officer, with amounts to be shown in the applicant's local currency and the United States dollar equivalent;

(3) calculation of applicant's risk-based capital ratio; and

(4) an English language copy of the applicant's latest annual report;

(1) political and economic structure;

(2) economic ties with Export-Import Bank, International Monetary Fund, World Bank and other similar organizations;

(3) foreign trade, including balance of payments with the United States and other countries; and

(4) foreign exchange restrictions;

(1) the extent to which the foreign banking corporation is subject to comprehensive supervision or regulation on a consolidated basis by its home country authorities, including whether each foreign banking corporation is supervised or regulated in such a manner that its home country supervisor receives sufficient information on the worldwide operations of the foreign banking corporation (including the relationships of the foreign banking corporation to any affiliate) to assess the foreign banking corporation's overall financial condition and compliance with law and regulation;

(2) the powers and functions of the home country authorities;

(3) the frequency and scope of supervisory examinations of banking institutions;

(4) the function of the Central Bank and its relationship to private banking institutions in the home country;

(5) the deposit insurance system, if any, in the home country; and

(6) the extent to which banking institutions from other countries are permitted to conduct business in the applicant's home country;

  • (1) authorizing the filing of the application and designating the officer who is to sign the application;
  • (2) designating the person or persons who is/are to be the representative (s) of the applicant or who shall be authorized to appoint such person or persons;
  • (3) authorizing the appointment of the Superintendent as true and lawful attorney for service of process; and
  • (4) authorizing the designation of the person to whom process may be forwarded by the Superintendent;

(3) of the Banking Law and Supervisory Policy FB2;

(1) applicant's charter authorizes it to conduct the activities permitted to the proposed representative office; and

(2) the application complies with the laws of the applicant's home country;

102.4 Prior notice for regional administrative offices.

The notice required by Section 2.4 of Supervisory Policy FB 2 for establishing a regional administrative office shall contain the information required under Section 102.3(a)-(c), (m)-(n), (p)-(r), (u) and (y).

NYR - 102.5 Foreign banking corporations with branch or agency.

The notice required by Section 2.5 of Supervisory Policy FB 2 for a foreign banking corporation currently maintaining a New York state-licensed branch or agency to obtain a license to establish a representative office in New York State shall contain the information required under Section 102.3(a)-(c), (m)-(n), (t)-(w) and (y).

NYR - 102.6 Notice for establishment of an office performing limited administrative functions.

The notice required by Section 2.7 of Supervisory Policy FB 2 for establishing an office performing limited administrative functions shall contain the following information:

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