Type: FCA Regulation
PART 620 - DISCLOSURE TO SHAREHOLDERS
Subpart D - Notice to Shareholders
§ 620.17 Special notice provisions for events related to minimum permanent capital.
(a) When a Farm Credit bank or association determines that it is not in compliance with the minimum permanent capital standard prescribed under § 615.5205 of this chapter, that institution must prepare and provide to its shareholders and the Farm Credit Administration a notice stating that the institution has initially determined it is not in compliance with minimum permanent capital standards. Such notice must be given within 30 days following the month end.
(b) When notice is given under paragraph (a) of this section, the institution must also notify its shareholders and the Farm Credit Administration when the institution’s permanent capital ratio decreases by one half of 1 percent or more from the level reported in the original notice, or from that reported in a subsequent notice provided under this paragraph. This notice must be given within 45 days following the end of every quarter at which the institution’s permanent capital ratio decreases as specified.
(c) Each institution required to prepare a notice under paragraph (a) or (b) of this section shall provide the notice to shareholders or publish it in any publication with circulation wide enough to be reasonably assured that all of the institution’s shareholders have access to the information in a timely manner. The information required to be included in this notice must be conspicuous, easily understandable, and not misleading.
(d) A notice, at a minimum, shall include:
(1) A statement that:
(i) Briefly describes the regulatory minimum permanent capital standard established by the Farm Credit Administration and the notice requirement of paragraph (a) of this section;
(ii) Indicates the institution’s current level of permanent capital; and
(iii) Notifies shareholders that the institution’s permanent capital is below the Farm Credit Administration regulatory minimum standard.
(2) A statement of the effect that noncompliance has had on the institution and its shareholders, including whether the institution is currently prohibited by statute or regulation from retiring stock or distributing earnings or whether the Farm Credit Administration has issued a capital directive or other enforcement action to the institution.
(3) A complete description of any event(s) that may have significantly contributed to the institution’s noncompliance with the minimum permanent capital standard.
(4) A statement that the institution is required by regulation to provide another notice to shareholders within 45 days following the end of any subsequent quarter at which the institution’s permanent capital ratio decreases by one half of 1 percent or more from the level reported in the notice.
[62 FR 15093, Mar. 31, 1997; as amended at 67 FR 16634, Apr. 8, 2002; 77 FR 60601, Oct. 3, 2012]
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