1. (a) In this Subarticle:

   1. (1) To “invest,” when used with respect to a corporation, means:

      1. (A) To invest in equity securities of the corporation;
      2. (B) To become or be the owner of any other securities of the corporation;
      3. (C) To make a loan or otherwise extend credit to or for the benefit of the corporation; or
      4. (D) To become or be an obligee of the corporation with respect to the payment of money.

   2. (2) To “invest in equity securities,” when used with respect to a corporation, means:

      1. (A) To become or be the owner of any equity securities of the corporation;
      2. (B) To make a contribution to the capital of the corporation; or
      3. (C) To effect any transaction which constitutes in substance, though not in form, becoming the owner of equity securities of the corporation or making a contribution to the capital of the corporation.
   3. (3) “Regulated corporation” means any corporation in which a subject institution invests under Financial Code Section 1472 and which the subject institution controls, unless the Commissioner designates the corporation as a non-regulated corporation.

2. (b) For purposes of this Subarticle, a subject institution shall be deemed to “control” a corporation in which it invests under Financial Code Section 1472 in any of the following cases:

   1. (1) In case the subject institution owns, directly or indirectly, a majority of the voting power of the corporation.
   2. (2) In case the subject institution owns, directly or indirectly, 25 percent or more (but less than a majority) of the voting power of the corporation, unless the Commissioner determines, upon application, that the subject institution does not control the corporation.
   3. (3) In case the Commissioner determines, with the consent of the subject institution and the corporation, that it is appropriate or necessary that the subject institution be treated as controlling the corporation, and that the corporation be treated as controlled by the subject institution, for purposes of Part 3 (commencing with Section 10.19090) of this Subarticle.

Note: Authority cited: Section 326, Financial Code. Reference: Section 1472, Financial Code.

History

1. Change without regulatory effect amending section filed 8-19-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 34).

2. Change without regulatory effect amending section and Note filed 8-21-2019 pursuant to section 100, title 1, California Code of Regulations (Register 2019, No. 34).