Federal Reserve Seeks Public Comment on Financial Holding Companies’ Physical Commodities and Merchant Banking Activities

The Federal Reserve Board (the Board) recently issued an advance notice of proposed rulemaking (the ANPR) seeking public comment on issues related to physical commodity activities conducted by financial holding companies (FHCs) and the restrictions imposed on these activities to ensure they are conducted in a safe and sound manner and do not pose a threat to financial stability. The commodities activities on which the Board is seeking comment are activities authorized under the “complementary” authority in Section 4(k)(1)(B) of the Bank Holding Company Act of 1956 (the BHCA) and grandfathered authority in Section 4(o) of the BHCA. The ANPR also seeks comment on merchant banking activities permitted under Section 4(k)(4)(H) of the BHCA.

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