(a) A Federal savings association (“you”) may make pass-through investments. A pass-through investment occurs when you invest in an entity (“company”) that engages only in activities that you may conduct directly and the investment meets the requirements of this section. If an investment is authorized under both this section and some other provision of law, you may designate under which authority or authorities the investment is made. When making a pass-through investment, you must comply with all the statutes and regulations that would apply if you were engaging in the activity directly. For example, your proportionate share of the company's assets will be aggregated with the assets you hold directly in calculating investment limits (e.g., no more than 400% of total capital may be invested in nonresidential real property loans).
(b) You may make a pass-through investment without prior notice to the OCC if all of the following conditions are met:
(1) You do not invest more than 15% of your total capital in one company;
(2) The book value of your aggregate pass-through investments does not exceed 50% of your total capital after making the investment;
(3) Your investment would not give you direct or indirect control of the company;
(4) Your liability is limited to the amount of your investment; and
(5) The company falls into one of the following categories:
(i) A limited partnership;
(ii) An open-end mutual fund;
(iii) A closed-end investment trust;
(iv) A limited liability company; or
(v) An entity in which you are investing primarily to use the company's services (e.g., data processing).
(c) If you want to make other pass-through investments, you must provide the OCC with 30 days' advance notice. If within that 30-day period the OCC notifies you that an investment presents supervisory, legal, or safety and soundness concerns, you must apply for and receive the OCC's prior written approval under the standard treatment processing procedures at part 116, subparts A and E of this chapter before making the investment. Notices under this section are deemed to be applications for purposes of statutory and regulatory references to “applications.” Any conditions that the OCC imposes on any pass-through investment shall be enforceable as a condition imposed in writing by the OCC in connection with the granting of a request by a Federal savings association within the meaning of 12 U.S.C. 1818(b) or 1818(i).
Title 12 published on 2014-01-01
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This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.