14th Jan 2015 06:35
LONDON (Alliance News) - Royal Bank of Scotland Group PLC's request for relief from regulations requiring it to form a US holding company by the middle of 2016 has been approved, according to the Federal Reserve's website.
According to a list of actions taken by the US central bank during the week ended December 20, 2014, the request was approved on December 10 last year.
The news was first reported by the Financial Times on Tuesday.
Under rules designed and introduced to make the system safer in the wake of the financial crisis, the so-called Regulation YY, foreign banking organisations with US assets of USD50 billion or more will be required to hold their US subsidiaries through a US intermediate holding company.
Intermediate holding companies will be subject to capital, capital planning, liquidity and stress testing requirements similar to those applicable to US bank holding companies.
Under the leadership of Chief Executive Ross McEwan, RBS is undergoing a massive restructuring, a process that involves shrinking its global operations and becoming a lender focused on operating in the UK.
As part of that process, the group has already begun to dispose of US retail lender Citizens Financial Group, headquartered in Providence, Rhode Island, retaining about 70% of the bank following its IPO on the New York Stock Exchange in September last year.
RBS plans to fully exit Citizens by 2016. If RBS hadn't been granted relief from the Regulation YY requirement, it would have had to form the US holding company by July 1, 2016.
The UK government still owns about 80% of RBS following the bank's bailout during the financial crisis.
http://www.federalreserve.gov/releases/h2/20141220/default.htm
http://www.federalreserve.gov/releases/h2/
By Samuel Agini; [email protected]; @samuelagini
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