Article XII company

Article XII company,

Definition of Article XII company:

  1. An Article XII company is an investment company chartered under the New York State Banking Law to finance international banking transactions. Article XII companies are usually owned by foreign banks and typically engage in activities similar to internationally oriented commercial banks, such as lending to overseas borrowers, foreign exchange (Forex) trading, and the issuance of letters of credit.

  2. Companies chartered under Article XII are given the freedom to operate like banks without facing the same level of legal restraint and scrutiny that other financial institutions (FI) in the United States usually have to endure. These companies are not subject to registration under the Investment Company Act of 1940 and are defined by the New York State Department of Financial Services as: "specialized non-depository lending institutions that have broad borrowing and lending powers and may invest in stocks and bonds.".

  3. An investment company specializing in international banking, chartered under Article XII of New York State Banking Law. Article XII companies are like other companies that facilitate foreign currency exchanges and execute international banking transactions, but they typically do not own equities and are not allowed to accept deposits in the State of New York.

How to use Article XII company in a sentence?

  1. They typically engage in activities similar to internationally oriented commercial banks, such as lending to overseas borrowers, foreign exchange (Forex) trading, and the issuance of letters of credit.
  2. An Article XII company is an investment company chartered under the New York State Banking Law to finance international banking transactions.
  3. Companies chartered under Article XII are able to do many things that commercial banks in the United States are prohibited from doing.
  4. They are not permitted to accept deposits, but they can hold credit balances and are exempt from the Federal Reserve System's (FRS) reserve requirements.

Meaning of Article XII company & Article XII company Definition