After
December 31, 1985, a
foreign bank or other company to which subsection (a) applies on
September 17, 1978, or on the date of the establishment of a
branch in a
State an application for which was filed on or before
July 26, 1978, may continue to engage in nonbanking activities in the United
States in which directly or through an affiliate it was lawfully engaged on
July 26, 1978 (or on a date subsequent to
July 26, 1978, in the case of activities carried on as the result of the direct or indirect acquisition, pursuant to a binding written contract entered into on or before
July 26, 1978, of another company engaged in such activities at the time of acquisition), and may engage directly or through an affiliate in nonbanking activities in the United
States which are covered by an application to engage in such activities which was filed on or before
July 26, 1978; except that the
Board by order, after opportunity for hearing, may terminate the authority conferred by this subsection on any such
foreign bank or company to engage directly or through an affiliate in any activity otherwise permitted by this subsection if it determines having due regard to the purposes of this chapter and the
Bank Holding Company Act of 1956 [
12 U.S.C. 1841 et seq.], that such action is necessary to prevent undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices in the United
States. Notwithstanding subsection (a) of this section, a
foreign bank or company referred to in this subsection may retain ownership or control of any voting shares (or, where necessary to prevent dilution of its voting interest, acquire additional voting shares) of any
domestically-controlled affiliate covered in 1978 which since
July 26, 1978, has engaged in the business of underwriting, distributing, or otherwise buying or selling stocks, bonds, and other securities in the United
States, notwithstanding that such affiliate acquired after
July 26, 1978, an interest in, or any or all of the assets of, a going concern, or commences to engage in any new activity or activities. Except in the case of affiliates described in the preceding sentence, nothing in this subsection shall be construed to authorize any
foreign bank or company referred to in this subsection, or any affiliate thereof, to engage in activities authorized by this subsection through the acquisition, pursuant to a contract entered into after
July 26, 1978, of any interest in or the assets of a going concern engaged in such activities. Any
foreign bank or company that is authorized to engage in any activity pursuant to this subsection but, as a result of action of the
Board, is required to terminate such activity may retain the ownership of control of shares in any company carrying on such activity for a period of two years from the date on which its authority was so terminated by the
Board. As used in this subsection, the term “affiliate” shall mean any company more than 5 per centum of whose voting shares is directly or indirectly owned or controlled or held with power to vote by the specified
foreign bank or company, and the term
“domestically-controlled affiliate covered in 1978” shall mean an affiliate organized under the laws of the United
States or any
State thereof if (i) no
foreign bank or group of
foreign banks acting in concert owns or controls, directly or indirectly, 45 per centum or more of its voting shares, and (ii) no more than 20 per centum of the number of directors as established from time to time to constitute the whole
board of directors and 20 per centum of the executive officers of such affiliate are
persons affiliated with any such foreign bank. For the purpose of the preceding sentence, the term
“persons affiliated with any such foreign bank” shall mean (A) any person who is or was an employee, officer, agent, or director of such
foreign bank or who otherwise has or had such a relationship with such
foreign bank that would lead such person to represent the interests of such
foreign bank, and (B) in the case of any director of such domestically controlled affiliate covered in 1978, any person in favor of whose election as a director votes were cast by less than two-thirds of all shares voting in connection with such election other than shares owned or controlled, directly or indirectly, by any such
foreign bank.