Securities Lawyer's Deskbook                          published by The University of Cincinnati College of Law

Rule 3a-6 -- Foreign Banks and Foreign Insurance Companies

---

1. Notwithstanding section 3(a)(1)(A) or section 3(a)(1)(C) of the Act, a foreign bank or foreign insurance company shall not be considered an investment company for purposes of the Act.
   
   
2. For purposes of this section:
   
   
   1. 1. Foreign bank means a banking institution incorporated or organized under the laws of a country other than the United States, or a political subdivision of a country other than the United States, that is:
         
         
         1. Regulated as such by that country's or subdivision's government or any agency thereof;
            
            
         2. Engaged substantially in commercial banking activity; and
            
            
         3. Not operated for the purpose of evading the provisions of the Act;
            
            
      2. The term foreign bank shall also include:
         
         
         1. A trust company or loan company that is:
            
            (1) Organized or incorporated under the laws of Canada or a political subdivision thereof;
            
            (2) Regulated as a trust company or a loan company by that country's or subdivision's government or any agency thereof; and
            
            (3) Not operated for the purpose of evading the provisions of the Act; and
            
            
         2. A building society that is:
            
            (1) Organized under the laws of the United Kingdom or a political subdivision thereof;
            
            (2) Regulated as a building society by the country's or subdivision's government or any agency thereof; and
            
            (3) Not operated for the purpose of evading the provisions of the Act.
            
            
      3. Nothing in this section shall be construed to include within the definition of foreign bank a common or collective trust or other separate pool of assets organized in the form of a trust or otherwise in which interests are separately offered.
         
         
   2. Engaged substantially in commercial banking activity means engaged regularly in, and deriving a substantial portion of its business from, extending commercial and other types of credit, and accepting demand and other types of deposits, that are customary for commercial banks in the country in which the head office of the banking institution is located.
      
      
   3. Foreign insurance company means an insurance company incorporated or organized under the laws of a country other than the United States, or a political subdivision of a country other than the United States, that is:
      
      
      1. Regulated as such by that country's or subdivision's government or any agency thereof;
         
         
      2. Engaged primarily and predominantly in:
         
         
         1. The writing of insurance agreements of the type specified in section 3(a)(8) of the Securities Act of 1933, except for the substitution of supervision by foreign government insurance regulators for the regulators referred to in that section; or
            
            
         2. The reinsurance of risks on such agreements underwritten by insurance companies; and
            
            
      3. Not operated for the purpose of evading the provisions of the Act. Nothing in this section shall be construed to include within the definition of "foreign insurance company" a separate account or other pool of assets organized in the form of a trust or otherwise in which interests are separately offered.
         
         Note: Foreign banks and foreign insurance companies (and certain of their finance subsidiaries and holding companies) relying on rule 3a-6 for exemption from the Act may be required by rule 489 under the Securities Act of 1933 to file Form F-N with the Commission in connection with the filing of a registration statement under the Securities Act of 1933.

	Notice to Users: The Deskbook is made available with the understanding that the University of Cincinnati College of Law is not engaged in rendering legal, accounting or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. See Terms and Conditions of Use.   © Copyright 1998-2008, University of Cincinnati, All Rights Reserved  Contact: joseph.hodnicki@uc.edu