standing subsection (b)(2) of this section or section 23B(d)(1), a financial subsidiary of a bank

(A) shall be deemed to be an affiliate of the bank; and (B) shall not be deemed to be a subsidiary of the bank. (3) EXCEPTIONS FOR TRANSACTIONS WITH FINANCIAL SUBSIDIARIES.

(A) EXCEPTION FROM LIMIT ON COVERED TRANSACTIONS WITH ANY INDIVIDUAL FINANCIAL SUBSIDIARY.-Notwithstanding paragraph (2), the restriction contained in subsection (a)(1)(A) shall not apply with respect to covered transactions between a bank and any individual financial subsidiary of the bank.

(B) EXCEPTION FOR EARNINGS RETAINED BY FINANCIAL SUBSIDIARIES. Notwithstanding paragraph (2) or subsection (b)(7), a bank's investment in a financial subsidiary of the bank shall not include retained earnings of the financial subsidiary.

(4) ANTI-EVASION PROVISION.-For purposes of this section and section 23B—

(A) any purchase of, or investment in, the securities of a financial subsidiary of a bank by an affiliate of the bank shall be considered to be a purchase of or investment in such securities by the bank; and

(B) any extension of credit by an affiliate of a bank to a financial subsidiary of the bank shall be considered to be an extension of credit by the bank to the financial subsidiary if the Board determines that such treatment is necessary or appropriate to prevent evasions of this Act and the Gramm-Leach-Bliley Act.

(f) RULEMAKING AND ADDITIONAL EXEMPTIONS.

(1) The Board may issue such further regulations and orders, including definitions consistent with this section, as may be necessary to administer and carry out the purposes of this section and to prevent evasions thereof.

(2) The Board may, at its discretion, by regulation or order exempt transactions or relationships from the requirements of this section if it finds such exemptions to be in the public interest and consistent with the purposes of this section. (12 U.S.C. 371c) 1

(3) RULEMAKING REQUIRED CONCERNING DERIVATIVE TRANSACTIONS AND INTRADAY CREDIT.—

(A) IN GENERAL.-Not later than 18 months after the date of the enactment of the Gramm-Leach-Bliley Act, the Board shall adopt final rules under this section to address as covered transactions credit exposure arising out of derivative transactions between member banks and their af

1 Section 23A of the Federal Reserve Act, as amended by section 410(b) of the Garn-St Germain Depository Institutions Act of 1982, shall apply to any transaction entered into after the date of enactment of such Act, except for transactions which are the subject of a binding written contract or commitment entered into on or before July 28, 1982, and except that any renewal of a participation in a loan outstanding on July 28, 1982, to a company that becomes an affiliate as a result of the enactment of such Act, or any participation in a loan to such an affiliate emanating from the renewal of a binding written contract or commitment outstanding on July 28, 1982, shall not be subject to the collateral requirements of the Act (see section 410(c) of the Garn-St Germain Depository Institutions Act of 1982, 96 Stat. 1520).

filiates and intraday extensions of credit by member banks to their affiliates.

(B) EFFECTIVE DATE.-The effective date of any final rule adopted by the Board pursuant to subparagraph (A) shall be delayed for such period as the Board deems necessary or appropriate to permit banks to conform their activities to the requirements of the final rule without undue hardship.

RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES

SEC. 23B. [12 U.S.C. 371c-1] (a) IN GENERAL.—

(1) TERMS.-A member bank and its subsidiaries may engage in any of the transactions described in paragraph (2) only

(A) on terms and under circumstances, including credit standards, that are substantially the same, or at least as favorable to such bank or its subsidiary, as those prevailing at the time for comparable transactions with or involving other nonaffiliated companies, or

(B) in the absence of comparable transactions, on terms and under circumstances, including credit standards, that in good faith would be offered to, or would apply to, nonaffiliated companies.

(2) TRANSACTIONS COVERED.-Paragraph (1) applies to the following:

(A) Any covered transaction with an affiliate.

(B) The sale of securities or other assets to an affiliate, including assets subject to an agreement to repurchase.

(C) The payment of money or the furnishing of services to an affiliate under contract, lease, or otherwise.

(D) Any transaction in which an affiliate acts as an agent or broker or receives a fee for its services to the bank or to any other person.

(E) Any transaction or series of transactions with a third party

(i) if an affiliate has a financial interest in the third party, or

(ii) if an affiliate is a participant in such transaction or series of transactions.

(3) TRANSACTIONS THAT BENEFIT AN AFFILIATE.-For the purpose of this subsection, any transaction by a member bank or its subsidiary with any person shall be deemed to be a transaction with an affiliate of such bank if any of the proceeds of the transaction are used for the benefit of, or transferred to, such affiliate.

(b) PROHIBITED TRANSACTIONS.

(1) IN GENERAL.-A member bank or its subsidiary

(A) shall not purchase as fiduciary any securities or other assets from any affiliate unless such purchase is permitted

(i) under the instrument creating the fiduciary relationship,

(ii) by court order, or

(iii) by law of the jurisdiction governing the fiduciary relationship; and

(B) whether acting as principal or fiduciary, shall not knowingly purchase or otherwise acquire, during the existence of any underwriting or selling syndicate, any security if a principal underwriter of that security is an affiliate of such bank.

[(2) EXCEPTIONS.-]1 Subparagraph (B) of paragraph (1) shall not apply if the purchase or acquisition of such securities has been approved, before such securities are initially offered for sale to the public, by a majority of the directors of the bank based on a determination that the purchase is a sound investment for the bank irrespective of the fact that an affiliate of the bank is a principal underwriter of the securities.

(3) DEFINITIONS.-For the purpose of this subsection

(A) the term "security" has the meaning given to such term in section 3(a)(10) of the Securities Exchange Act of 1934; and

(B) the term "principal underwriter" means any underwriter who, in connection with a primary distribution of securities

(i) is in privity of contract with the issuer or an affiliated person of the issuer;

(ii) acting alone or in concert with one or more other persons, initiates or directs the formation of an underwriting syndicate; or

(iii) is allowed a rate of gross commission, spread, or other profit greater than the rate allowed another underwriter participating in the distribution.

(c) ADVERTISING RESTRICTION.-A member bank or any subsidiary or affiliate of a member bank shall not publish any advertisement or enter into any agreement stating or suggesting that the bank shall in any way be responsible for the obligations of its affiliates.

(d) DEFINITIONS.-For the purpose of this section

(1) the term "affiliate" has the meaning given to such term in section 23A (but does not include any company described in section 2 (b)(2) of such section or any bank);

(2) the terms "bank", "subsidiary", "person", and "security" (other than security as used in subsection (b)) have the meanings given to such terms in section 23A; and

(3) the term "covered transaction" has the meaning given to such term in section 23A (but does not include any transaction which is exempt from such definition under subsection (d) of such section).

(e) REGULATIONS.-The Board may prescribe regulations to administer and carry out the purposes of this section, including— (1) regulations to further define terms used in this section; and

(2) regulations to

1 Paragraph (2) was amended in its entirety by section 738 of Public Law 106-102 (113 Stat. 1480). Such amendment did not reinsert the paragraph designation and heading.

2 So in original. Probably should be "subsection".

(A) exempt transactions or relationships from the requirements of this section; and

(B) exclude any subsidiary of a bank holding company from the definition of affiliate for purposes of this section, if the Board finds such exemptions or exclusions are in the public interest and are consistent with the purposes of this section. (12 U.S.C. 371c-1)

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EXPORT-IMPORT BANK ACT OF 1945

(Chapter 341, July 31, 1945, 59 Stat. 526)

SEC. 12. [12 U.S.C. 635i–6] DEBT REDUCTION; ENTERPRISE FOR THE AMERICAS INITIATIVE. (a) ***

(c) LOANS ELIGIBLE FOR SALE, REDUCTION, OR CANCELLATION.(1) ***

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(3) TREATMENT UNDER SECURITIES LAWS.-The filing of a registration statement under the Securities Act of 1933 shall not be required with respect to the sale or offer for sale by the Bank of a loan or any interest therein pursuant to this section. For purposes of the Securities Act of 1933, the Bank shall not be deemed to be an issuer or underwriter with respect to any subsequent sale or other disposition of such loan (or any interest therein) or any security received by an eligible purchaser pursuant to any debt-for-equity swap, debt-for-development swap, or debt-for-nature swap.