Foreign Bank Exemption from the Insider Lending Prohibition of Exchange Act Section 13(k)

We are adopting for qualified foreign banks an exemption from the insider lending prohibition under section 13(k) of the Securities Exchange Act of 1934, as added by section 402 of the Sarbanes-Oxley Act. This section prohibits both domestic and foreign issuers from making or arranging for loans to their directors and executive officers unless the loans fall within the scope of specified exemptions. One of these exemptions permits certain insider lending by a bank or other depository institution that is insured under the Federal Deposit Insurance Act. Foreign banks whose securities are registered with the Securities and Exchange Commission are not eligible for the bank exemption under section 13(k). The adopted rule will remedy this disparate treatment of foreign banks by exempting from section 13(k)'s insider lending prohibition those foreign banks that satisfy specified criteria similar to those that qualify domestic banks for the statutory exemption.