WASHINGTON, April 3 (UPI) -- The U.S. Federal Reserve Board approved a final rule setting requirements for determining whether a non-bank company should have Fed oversight.
The requirements will be used by the Financial Stability Oversight Council when it considers the potential designation of a non-bank financial institution for Federal Reserve supervision, the agency said Wednesday in a release.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, a non-bank financial company can be designated for supervision by the Federal Reserve only if it is "predominantly engaged in financial activities."
A company is considered to be "predominantly engaged in financial activities" if at least 85 percent of its revenues or assets are related to financial activities as defined by the Bank Holding Company Act.
Among other things, the final rule said the Financial Stability Oversight Council must consider the extent and nature of the non-bank financial institution's transactions and relationships with other similar companies when determining whether the institution should be supervised by the Federal Reserve.
The rule goes into effect May 6.