Interpretive Letter 1189 — Exemption from Section 23A for Bank Merger

Washington, DC 20219
December 19, 2025
Subject: – Section 23A Exemption Request
Dear :
I am writing in response to your letter dated July 24, 2025 (Request), submitted on behalf of Bank), requesting an exemption from the quantitative limits of Section 23A of the Federal Reserve Act (Section 23A) and the implementing regulations in 12 C.F.R Part 223 (Regulation W). 1 The exemption would enable to merge the fixed income derivatives business of its nonbank affiliate, with and into . 2 is a national bank with approximately $ billion in assets, as of September 30, 2025. The Bank is a direct wholly owned subsidiary of and an indirect wholly owned subsidiary of and are registered financial holding companies under the Bank Holding Company Act.
Section 23A imposes certain qualitative and quantitative limits on covered transactions between
member banks and their affiliates. Section 23A and Regulation W limit the amount of covered transactions between a bank and any single affiliate to 10 percent of the bank’s capital stock and surplus and the aggregate amount of covered transactions between a bank and all of its affiliates to 20 percent of the bank’s capital stock and surplus.3 In addition, Section 23A and 1 See 12 U.S.C. § 371c(f)(2)(B)(i); 12 C.F.R. § 223.43. See also 12 C.F.R. §§ 31.3(c)–31.3(d). 2 Additional regulatory approvals are required to facilitate the Merger, which involves the merger of a nonbank affiliate into the Bank. Additional applications must be filed under the Bank Merger Act (12 U.S.C. § 1828(c)) and under 12 U.S.C. § 215a-3 and 12 C.F.R. § 5.33. The Bank represents that at the time of the proposed merger all of the activities of would be permissible for to conduct as a national bank. 3 See 12 U.S.C. § 371c(a)(1); 12 C.F.R. § 223.11-12. See also 12 C.F.R. § 223.3(d) and 223.3(h) for the definitions of “capital stock and surplus” and “covered transaction,” respectively. Interpretive Letter #1189 January 2026