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Can you summarize 12 CFR Part 251?
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM > CONCENTRATION LIMIT (REGULATION XX)
Short Summary
This regulation, known as Regulation XX, governs the concentration limit for covered acquisitions by financial companies. It prohibits a financial company from merging or consolidating with, acquiring all or substantially all of the assets of, or otherwise acquiring control of, another company if the resulting company’s consolidated liabilities would exceed 10 percent of the aggregate consolidated liabilities of all financial companies. The regulation applies to financial companies seeking to merge, consolidate, or acquire control of another company. Exemptions to the concentration limit are provided for certain situations, such as acquisitions of insured depository institutions in default or in danger of default, acquisitions with assistance from the Federal Deposit Insurance Corporation, or acquisitions resulting in an increase in liabilities not exceeding $2 billion when aggregated with other acquisitions made by the financial company in the preceding twelve months. The regulation does not specify penalties for non-compliance or violations. Overall, the regulation aims to ensure the stability and soundness of the financial sector by setting forth requirements and limitations for covered acquisitions by financial companies.
Whom does it apply to?
Financial companies seeking to merge, consolidate, or acquire control of another company
What does it govern?
Concentration limit for covered acquisitions by financial companies
What are exemptions?
Exemptions include covered acquisitions of insured depository institutions in default or in danger of default, covered acquisitions with assistance from the Federal Deposit Insurance Corporation, or covered acquisitions resulting in an increase in liabilities not exceeding $2 billion when aggregated with other acquisitions made by the financial company in the preceding twelve months
What are the Penalties?
The regulation does not mention specific penalties for non-compliance or violations.
Jurisdiction
U.S. Federal Government