---
kind: "section"
citation: "12 C.F.R. § 1310.12"
title: "12"
number: "1310.12"
heading: "Anti-evasion provision."
url: "https://uscodex.org/cfr/12/1310.12"
---

# §1310.12. Anti-evasion provision.

- (a) **Determinations.** In order to avoid evasion of title I of the Dodd-Frank Act ([12 U.S.C. 5311-5374](/usc/12/5311-5374.md)) or this part, the Council, on its own initiative or at the request of the Board of Governors, may require that the financial activities of a company shall be supervised by the Board of Governors and subject to prudential standards if the Council determines that—
  - (1) Material financial distress related to, or the nature, scope, size, scale, concentration, interconnectedness, or mix of, the financial activities conducted directly or indirectly by a company incorporated or organized under the laws of the United States or any State or the financial activities in the United States of a company incorporated or organized in a country other than the United States would pose a threat to the financial stability of the United States, based on consideration of the factors in—
    - (i) [§ 1310.11(a)](/cfr/12/1310.11.md?p=a) if the company is incorporated or organized under the laws of the United States or any State; or
    - (ii) [§ 1310.11(b)](/cfr/12/1310.11.md?p=b) if the company is incorporated or organized in a country other than the United States; and
  - (2) The company is organized or operates in such a manner as to evade the application of title I of the Dodd-Frank Act ([12 U.S.C. 5311-5374](/usc/12/5311-5374.md)) or this part.
- (b) **Vote required.** Any proposed or final determination under [paragraph (a)](#a) of this section shall—
  - (1) Be made by the Council and shall not be delegated by the Council; and
  - (2) Require the vote of not fewer than two-thirds of the voting members of the Council then serving, including the affirmative vote of the Chairperson of the Council.
- (c) **Definition of covered financial activities.** For purposes of this section, the term “financial activities”—
  - (1) Means activities that are financial in nature (as defined in section 4(k) of the Bank Holding Company Act of 1956);
  - (2) Includes the ownership or control of one or more insured depository institutions; and
  - (3) Does not include internal financial activities conducted for the company or any affiliate thereof, including internal treasury, investment, and employee benefit functions.
- (d) **Application of other provisions.** Sections [1310.20(a)](/cfr/12/1310.20.md?p=a), [1310.20(b)](/cfr/12/1310.20.md?p=b), [1310.20(c)](/cfr/12/1310.20.md?p=c), [1310.20(e)](/cfr/12/1310.20.md?p=e), [1310.21](/cfr/12/1310.21.md), [1310.22](/cfr/12/1310.22.md), and [1310.23](/cfr/12/1310.23.md), and the definitions referred to therein, shall apply to proposed and final determinations of the Council with respect to the financial activities of a company pursuant to this section in the same manner as such sections apply to proposed and final determinations of the Council with respect to nonbank financial companies.

## Notes

### Authority

Authority: 12 U.S.C. 5321; 12 U.S.C. 5322; 12 U.S.C. 5323.

### Source

Source: 77 FR 21651, Apr. 11, 2012, unless otherwise noted.