Under Sections 23A and 23B of the Federal Reserve Act, and the accompanying Federal Reserve Board Regulation W, US insured retail banks, and certain other US banking organizations are restricted in the types of transactions in which they can engage with their nonbank affiliates. This sometimes can lead to confusion on the part of the non-bank affiliate, which may wish to have participation by the US bank affiliate in a particular transaction, and cannot fully understand why it is being turned down.

Kathleen A. Scott wrote a recent column in the New York Law Journal that discusses Regulation W, its key definitions and the specific prohibitions and restrictions on such affiliate transactions, in order to assist non-bank affiliates in understanding what affiliate transactions are permissible, or impermissible, as the case may be.

Read the article: Affiliate Transactions Involving Non-U.S. Banks