The Federal Reserve approved a final rule that defines whether a company is “predominantly engaged in financial activities.”
“The requirements will be used by the Financial Stability Oversight Council when it considers the potential designation of a nonbank financial company for consolidated supervision by the Federal Reserve,” the Fed said today in a statement today in Washington. The rule says companies are “predominantly” engaged in financial activities if 85 percent or more of the firm’s revenues or assets are financial in nature.
The Fed was required to write the rule by the Dodd-Frank financial regulatory overhaul that was signed into law in July 2010. Regulators will use the designation in determining whether a company may be subject to additional regulatory oversight.
The Fed first proposed the rule in February 2011.
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