---
kind: "section"
citation: "12 C.F.R. § 252.64"
title: "12"
number: "252.64"
heading: "Restrictions on corporate practices of U.S. global systemically important banking organizations."
url: "https://uscodex.org/cfr/12/252.64"
---

# §252.64. Restrictions on corporate practices of U.S. global systemically important banking organizations.

- (a) **Prohibited corporate practices.** A global systemically important BHC may not directly:
  - (1) Issue any debt instrument with an original maturity of less than 365 days (one year), including short term deposits and demand deposits, to any person, unless the person is a subsidiary of the global systemically important BHC;
  - (2) Issue any instrument, or enter into any related contract, with respect to which the holder of the instrument has a contractual right to offset debt owed by the holder or its affiliates to a subsidiary of the global systemically important BHC against the amount, or a portion of the amount, owed by the global systemically important BHC under the instrument;
  - (3) Enter into a qualified financial contract that is not a credit enhancement with a person that is not a subsidiary of the global systemically important BHC;
  - (4) Enter into an agreement in which the global systemically important BHC guarantees a liability of a subsidiary of the global systemically important BHC if such liability permits the exercise of a default right that is related, directly or indirectly, to the global systemically important BHC becoming subject to a receivership, insolvency, liquidation, resolution, or similar proceeding other than a receivership proceeding under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act ([12 U.S.C. 5381 through 5394](/usc/12/5381..5394.md)) unless the liability is subject to requirements of the Board restricting such default rights or subject to any similar requirements of another U.S. federal banking agency; or
  - (5) Enter into, or otherwise begin to benefit from, any agreement that provides for its liabilities to be guaranteed by any of its subsidiaries.
- (b) **Limit on unrelated liabilities.**
  - (1) The aggregate amount, on an unconsolidated basis, of unrelated liabilities of a global systemically important BHC owed to persons that are not affiliates of the global systemically important BHC may not exceed 5 percent of the systemically important BHC's external total loss-absorbing capacity amount, as calculated under [§ 252.63(b)](/cfr/12/252.63.md?p=b).
  - (2) For purposes of [paragraph (b)(1)](#b-1) of this section, an unrelated liability is any non-contingent liability of the global systemically important BHC owed to a person that is not an affiliate of the global systemically important BHC other than:
    - (i) The instruments that are used to satisfy the global systemically important BHC's external total loss-absorbing capacity amount, as calculated under [§ 252.63(b)](/cfr/12/252.63.md?p=b);
    - (ii) Any dividend or other liability arising from the instruments that are used to satisfy the global systemically important BHC's external total loss-absorbing capacity amount, as calculated under [§ 252.63(b)](/cfr/12/252.63.md?p=b);
    - (iii) An eligible debt security that does not provide the holder of the instrument with a currently exercisable right to require immediate payment of the total or remaining principal amount; and
    - (iv) A secured liability, to the extent that it is secured, or a liability that otherwise represents a claim that would be senior to eligible debt securities in Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act ([12 U.S.C. 5390(b)](/usc/12/5390.md?p=b)) and the Bankruptcy Code ([11 U.S.C. 507](/usc/11/507.md)).
- (c) A Covered BHC is not subject to [paragraph (b)](#b) of this section if all of the eligible debt securities issued by the Covered BHC would represent the most subordinated debt claim in a receivership, insolvency, liquidation, or similar proceeding of the Covered BHC.

## Notes

### Source

Source: 82 FR 8306, Jan. 24, 2017, unless otherwise noted.

### Authority

Authority: 12 U.S.C. 321-338a, 481-486, 1467a, 1818, 1828, 1831n, 1831o, 1831p-1, 1831w, 1835, 1844(b), 1844(c), 3101 et seq., 3101 note, 3904, 3906-3909, 4808, 5361, 5362, 5365, 5366, 5367, 5368, 5371.

### Source

Source: 77 FR 62391, Oct. 12, 2012, unless otherwise noted.