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Journal cover: Journal of Investment Compliance

Journal of Investment Compliance

ISSN: 1528-5812

Online from: 2000

Subject Area: Accounting and Finance

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Pitfalls for non-US financial institutions undertaking business in the US

Document Information:
Title:Pitfalls for non-US financial institutions undertaking business in the US
Author(s):Chuck Grieve, (Associate Director with the Engage Group Ltd, London, UK), Tim Plews, (Partner, Financial Services Practice with Clifford Chance LLP, Canary Wharf, London, UK), Thomas Pax, (Partner, Head of US Bank Regulatory Group with Clifford Chance LLP, Washington, DC, USA), Robert Houck, (Partner, Securities Litigation, Regulatory & White Collar Group with Clifford Chance LLP, New York, USA)
Citation:Chuck Grieve, Tim Plews, Thomas Pax, Robert Houck, (2008) "Pitfalls for non-US financial institutions undertaking business in the US", Journal of Investment Compliance, Vol. 9 Iss: 4, pp.9 - 12
Keywords:Banks, Financial services, United States of America
Article type:Technical paper
DOI:10.1108/15285810810922305 (Permanent URL)
Publisher:Emerald Group Publishing Limited

Purpose – The purpose of this paper is to illustrate the regulatory challenges that financial institutions around the world face in entering the US market.

Design/methodology/approach – The paper provides examples of the intricacies in US banking regulation that a financial institution has to think though as it considers buying US assets, including selected provisions of the Bank Holding Company Act, the nature of Federal Reserve jurisdiction and supervision, competition among various federal and state regulators, and dangers related to class action suits and intrusive discovery in civil proceedings.

Findings – The paper finds that as soon as a foreign bank buys or opens a US bank, it becomes a bank holding company under Federal Reserve jurisdiction. Often there is competition among regulators; securities markets are mostly regulated at the national level, but each state also has its own code. Another new factor is cooperation among international law enforcement agencies. Class actions and intrusive discovery, for example tens of millions of pages of e-mail records, are the most expensive potential problems.

Originality/value – The paper contains guidance and insight from experienced financial services lawyers.

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