Edge corporations

Edge corporations

Specialized banking institutions, authorized and chartered by the Federal Reserve Board of Governors in the U.S., that are allowed to engage in transactions of a foreign or international character. They are not subject to restrictions on interstate banking. Foreign banks operating in the U.S. are permitted to organize and own an edge corporation.

Edge Act Corporation

A bank chartered by the Federal Reserve to conduct international banking transactions without needing to abide by the banking laws of an individual state. Edge Act corporations were established by the Edge Act in 1919 and have since undergone several legal revisions. Because banking is more international today there are fewer distinctions between Edge Act corporations and ordinary banks.
References in periodicals archive ?
611 through 631) (Edge Corporations); corporations operating subject to an agreement with the Board under section 25 of the FRA (12 U.S.C.
(b) Banking institution means a State member bank; bank holding company; Edge Corporation and Agreement Corporation engaged in banking.
* Implements recent statutory changes authorizing a bank to invest up to 20 percent of capital and surplus in Edge corporations
Supervisory programs for state member banks and bank holding companies are implemented by individual Reserve Banks under policies and procedures issued by the Federal Reserve Board.(5) Historically, the Reserve Banks generally used local supervisory staff for examinations and inspections, which, for the most part, were focused on legal entities, such as banks, Edge corporations, or bank holding companies.
banking subsidiary of HSBC.(3) In addition, HSBC proposes to acquire the foreign operations and Edge corporations of RNYC pursuant to section 4(c)(13) of the BHC Act (12 U.S.C.
225.24) to acquire the nonbanking subsidiaries of BT Corp and thereby engage worldwide in certain permissible nonbanking activities.(2) In addition, Deutsche Bank proposes to acquire the Edge corporations of BT Corp pursuant to section 25A of the Federal Reserve Act (12 U.S.C.
Some observers have argued that operating subsidiaries should be allowed to conduct broad activities as principal in the United States because Edge corporations, which are congressionally authorized corporations chartered to conduct a banking business outside the United States and are largely owned by banks, have conducted a broader range of activities as principal outside the United States without damage to banks.
Of those offices, 10 were bank subsidiaries, 147 were branches and agencies, 2 were Edge corporations, and 3 were New York state-chartered Article XII investment companies.
Moreover, the Edge Act directs the Board to create a regulatory climate in which Edge corporations may compete effectively with foreign banks.
Under section 25A of the Federal Reserve Act, an Edge corporation may receive deposits outside the United States and only such deposits within the United States thatare incidental to or for the purpose of carrying out transactions in foreign countries.
One set of conditions permits a foreign bank to establish a branch outside its home state if the establishment and operation of such branch is permitted by the state in which the branch is to be established and the branch limits its deposit-taking to that of an Edge corporation operating under section 25A of the Federal Reserve Act.
Under section 25A of the Federal Reserve Act, an Edge corporation may receive deposits outside the United States and only such deposits within the United States that are incidental to or for the purpose of carrying out transactions in foreign countries.