In a highly-anticipated release, the Federal Reserve has issued
a final rule amending its regulations governing when one company
will be deemed to control another.
The changes will have significant implications for investments
by and in banking organizations.1 On balance, it will
provide greater certainty and transparency by codifying and
clarifying a number of principles for analyzing control that have
never before been set out in a comprehensive fashion or in formal
regulation. At the same time, the Final Rule and its preamble raise
their own questions of interpretation, making it likely that the
coming years will see the emergence of a new body of unwritten lore
and informal interpretation of the rule. In addition, because the
Final Rule is stricter in some respects than the earlier framework,
and generally does not adopt a grandfathering concept for existing
investments, banking organizations are actively focused on
developing approaches to address investments
