ID Theft Red Flags FAQ IIA5 – What are “functionally regulated” subsidiaries of banks and savings associations that are referenced in the scope sections of the Identity Theft Red Flags regulations issued by several of the Agencies?

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Q:  What are “functionally regulated” subsidiaries of banks and savings associations that are referenced in the scope sections of the Identity Theft Red Flags regulations issued by several of the Agencies?
 
A:  The term “functionally regulated subsidiary” is defined in section 5(c)(5) of the Bank Holding Company Act of 1956, as amended by the Gramm-Leach-Bliley Act (12 U.S.C. § 1844(c)).  The term means any company that is not a bank holding company or depository institution and that is:
  • a broker or dealer that is registered under the Securities Exchange Act of 1934;
  • a registered investment adviser, properly registered by or on behalf of either the Securities and Exchange Commission or any state, with respect to the investment advisory activities of such investment adviser and activities incidental to such investment advisory activities;
  • an investment company that is registered under the Investment Company Act of 1940;
  • an insurance company, with respect to insurance activities of the insurance company and activities incidental to such insurance activities, that is subject to supervision by a state insurance regulator; or
  • an entity that is subject to regulation by the Commodity Futures Trading Commission, with respect to the commodities activities of such entity and activities incidental to such commodities activities.
 
ADDITIONAL INFORMATION:
This information was obtained from the Interagency FAQs for Identity Theft Red Flags and Address Discrepancies - https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20090611a1.pdf
 

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