Regulation Y Law and Legal Definition
Regulation Y is a federal reserve regulation that governs banking and nonbanking activities of bank holding companies. Regulation Y determines the divestiture of impermissible nonbank activities. The regulation lays down:
- the procedures for forming a bank holding company;
- the procedures to be followed by bank holding companies acquiring voting shares in bank or nonbank companies; and
- nonbank activities related to banking permissible for bank holding companies.
Moreover Regulation Y lays down bank holding company transactions that require federal reserve approval. Transactions requiring federal sanction are: