FCD1		Definitions [Section 11-37.5-103, C.R.S.]

A.	For purposes of the Foreign Capital Depository Act Rules, the following definitions apply:

1.	"Act" means the Colorado Foreign Capital Depository Act, Section 11-37.5-101, C.R.S., et. Seq.
2.	“Banking Board,” or "Board," means the Colorado State Banking Board, appointed and serving pursuant to Section 11-102-103, C.R.S.
3.	"Core Capital" includes the following elements:
a.	Common stockholders' equity;
b.	Noncumulative perpetual preferred stock and related surplus; and
c.	Minority interests in the equity account of consolidated subsidiaries.
d.	Less:  Goodwill
4.	"Cash," or "funds," means currency, cashier's checks, and money orders.  Neither "cash" nor "funds" includes precious metals or other tangible personal property that may be held by a foreign capital depository.
5.	"Charter" means a certificate issued by the Banking Board to a corporation verifying that the corporation is authorized to conduct business in Colorado as a foreign capital depository.
6.	"Commissioner" means the State Bank Commissioner appointed and serving pursuant to Section 11-102-101(2), C.R.S.
7.	"Controlling person" means any person who directly or indirectly or acting through or in concert with one or more persons holds 5 percent or more of the equity in a foreign capital depository or who is otherwise determined by the Banking Board to exercise controlling authority over decisions affecting the management and operation of a foreign capital depository.
8.	"Customer" means a person who is using or has used the services of a foreign capital depository or for whom a foreign capital depository has acted as a fiduciary.
9.	"Division" means the Colorado Division of Banking established pursuant to Section 11-102-101(1), C.R.S.
10.	"Foreign bank" means a bank that has its primary office outside the jurisdiction of the United States and is licensed under the laws of a foreign country or a political subdivision of a foreign country.
11.	"Foreign capital depository," or "depository," means a financial institution incorporated in Colorado and chartered by the Banking Board to conduct business as a foreign capital depository in accordance with the Act.
12.	"Goodwill" means an intangible asset that represents the excess of the purchase price over the fair market value of tangible and identifiable intangible assets acquired in purchases accounted for under the purchase method of accounting.
13.	"Money laundering" is the process through which the existence, illegal source, true ownership or unlawful application of illicitly-derived funds is concealed or disguised to make funds appear legitimate, thereby helping to evade detection, prosecution, seizure, or taxation.
14.	"Nonresident alien" means a person who is not a citizen or a resident of the United States.
15.	"Person" means an individual, partnership, corporation, limited liability company, association, trust or other legal entity.

FCD2	Application Procedure For A Charter [Section 11-37.5-109, C.R.S.]
A.	One or more individual incorporators desiring to organize a foreign capital depository shall file with the Commissioner an application to the Banking Board for a charter for a foreign capital depository.  The application shall be signed by each of the incorporators, sworn to before a notary, officer, or other official recognized by the laws of this state or under federal law as having the power to administer oaths or witness and attest to execution, and the application shall contain the following information in addition to any other information as may be required pursuant to Section 11-37.5-109, C.R.S., including the form of application prescribed by the Commissioner:
1.	The names, addresses, places of residence, and principal occupations of the incorporators and the stockholders initially subscribing to purchase the capital stock of the applicant and the number of shares subscribed by each initial subscriber;
2.	The name of the city or town and county in which the principal office of the depository is to be located;
3.	The names, principal occupations, addresses, places of residence, and business and professional experience of all proposed officers, including the officer designated as managing officer for the applicant;
4.	The number of members on the board of directors and the names, principal occupations, addresses, places of residence, and business and professional experience of the applicant’s initial board members;
5.	Financial statements that contain sufficient detail to substantiate each controlling person’s net worth;
6.	Documents certifying that the identity of each director, executive officer, and controlling person of the proposed foreign capital depository has been verified by means of a background check.  Such background check, which shall be in addition to any background check that the Commissioner or designated personnel of the Division shall conduct pursuant to Paragraph (B) of Banking Board Rule FCD8, shall be conducted by a reputable and licensed private investigative service and shall include inquiry into each individual’s financial means, employment history, credit history, criminal record, and record of tax delinquencies, if any;
7.	Evidence that capital stock has been fully subscribed and the incorporator(s) has paid in full in cash for stock having a par value of not less than one percent of the minimum capital and paid-in surplus requirements. 
8.	A business plan pro forma statement containing at a minimum:
a.	A three-year projected comparative balance sheet, income statement and statement of cash flows, showing projections of income, costs, profits and cash flows;
b.	A three-year estimate of the volume of deposits and fiduciary assets, if applicable, to be placed with the proposed depository, with an explanation of the applicant’s reasons for believing it will develop such volume of business;
c.	A three-year capital plan detailing compliance with the minimum capital requirements set forth in Banking Board Rule FCD5 based on the business plan projections, and potential sources of additional capital infusions if necessary to maintain compliance; and,
d.	A statement of proposed expenditures for fixed assets such as premises, fixtures, furniture and equipment, and a statement of estimated start-up costs.
9.	A description of the services the depository will provide to nonresident aliens, which may include the following:
a.	A detailed description of the products and services that are to be offered;
b.	A discussion of any affiliated and/or non-affiliated business relationships that may be contemplated;
c.	The data processing system(s) intended to support the products and services to be offered, the level of customer access that will be provided, links to external systems, if applicable, and system controls and security features.
10.	The intended location of each depository office in this state and identification and location of any facilities (all of which places of business and facilities must be located in Colorado) that will be used to maintain or hold assets deposited with, or the funds or other assets of, the depository, including the identity and qualifications of anyone who will control or hold any such assets or funds and documentation of the proposed policies and procedures for assuring compliance by such parties with the Act and administrative rules pertaining to privacy and all other matters;
11.	The officers and employees of the applicant proposed to be bonded, the amount of bonds to be provided and the surety company or sureties proposed to issue said bonds, which bonds shall be in such form as is provided or approved by the Commissioner and issued by a surety company qualified and authorized to do business in Colorado or otherwise approved by the Commissioner;
12.	The proposed articles of incorporation, in accordance with Section 11-37.5-109(1)(b), C.R.S.;
13.	A written copy of the applicant’s know-your-customer policy and a written description of the implementation method for such policy, prepared in reasonable detail. Such policy shall be approved by the applicant’s board of directors and noted in the applicant’s official records. The criteria for such policy are set forth in Banking Board Rule FCD22;

14.	A detailed written description of the applicant’s personnel training and pre-employment screening programs, physical and technological security systems, methods of compliance with applicable federal record keeping and reporting laws, including, without limitation, the “Federal Bank Secrecy Act,” and any contracts entered into with parties to provide any services or facilities related to these requirements, prepared in reasonable detail; and,
15.	Such other information relevant to an applicant’s fitness to operate a foreign capital depository as the Commissioner or Banking Board may require.
B.	The applicant shall be required to disclose to all customers by written notice at the time of deposit the following:
1.	“Neither deposits of currency, tangible personal property, any other property, business transactions, nor the foreign capital depository is insured by any governmental entity such as the United States or the State of Colorado;” 
2.	The notice shall be acknowledged in English, in writing, and by certified translation in the customer’s native language, by the customer; and
3.	The notice shall be provided to the customer in the English language and by certified translation in the customer’s native language.
C.	Subject to the provisions of Paragraph C, Banking Board Rule FCD9, an application fee of $25,000 shall be remitted to the “Division of Banking” in the form of a cashier’s check, or similar instrument, payable to the Colorado Division of Banking at the time of application.  Such application fee shall not be refundable in whole or in part.
D.	The proposed articles of incorporation, in accordance with Section 11-37.5-109(1)(b), C.R.S., shall be submitted with the application for a charter.
E.	The form for applying for a charter for a foreign capital depository may be obtained from the Division of Banking.
F.	The information required to be provided in the charter application that is referenced in Paragraphs (A)( 1, 2, 3, 4, 10, 12) and (D) of this Rule shall be considered public information and available to interested persons.  All other information and documentation submitted by the applicant in support of its application shall be considered confidential and subject to the requirements of confidentiality set forth in Section 11-102-306, C.R.S., for the State Banking Board, the Bank Commissioner and employees of the Division of Banking.  Such confidential information may be provided to law enforcement agencies and to other agents of the Division of Banking for the purpose of conducting checks of background information pursuant to Paragraph (B) of Banking Board Rule FCD8 or other provisions of law.  In the event that any confidential information or documentation submitted in support of the application, or discovered in any background check, serves as the basis for the Banking Board’s decision to deny a charter at the public hearing required by Paragraph (D) of Banking Board Rule FCD8, then such information or documentation shall become public information and a matter of public record.
G.	Unless determined otherwise by the Banking Board, the application process for granting a charter shall be as provided in these rules and not as provided in the statutory application process for other state financial institutions.

FCD5	Capital Adequacy [Section 11-37.5-109, C.R.S.]

A.	Purpose

The Colorado State Banking Board believes that foreign capital depositories should maintain certain minimum capital levels to provide for periods of temporary operating losses, insulate depositors from such losses, and better ensure the ongoing viability of the depository.

B.	Definitions:  For the purpose of this Rule:

1.	“Deposit Liabilities” means customer deposits that are a liability of the foreign capital depository.
2.	“Liquid Assets” means cash, or an investment vehicle with a readily available market price that can be quickly converted into cash without causing a significant movement in the price.
3.	“Fiduciary Assets” means those assets held for benefit of, or in trust for others.  The foreign capital depository may have investment discretion, or the investment authority may remain with the account holder or external manager.  Fiduciary assets are not recorded on the balance sheet of the foreign capital depository.

C.	Initial Capital

No foreign capital depository shall be granted a charter unless it has paid-in capital of at least $5,000,000, or such greater amount as the Banking Board may reasonably require.

D.	Minimum Capital 

1.	A foreign capital depository must maintain core capital of not less than the greater of:  (1) $3,000,000, or (2) an amount calculated based on the following factors and thresholds:

a.	Four (4.0) percent of deposit liabilities

PLUS

b.	One tenth of one percent (.001) of fiduciary assets, such amount not to exceed five million ($5,000,000).  

E.	Liquid Assets

A foreign capital depository must hold liquid assets equal to the greater of $1 million or two (2.0) percent of deposit liabilities. 

F.	Establishment of Minimum Capital for an Individual Institution

1.	Applicability

The Banking Board may require higher minimum capital levels for an individual foreign capital depository in view of its circumstances.  For example, higher capital levels may be appropriate for:
a.	A newly chartered foreign capital depository;
b.	A foreign capital depository receiving special supervisory attention;
c.	A foreign capital depository that has, or is expected to have, losses resulting in capital inadequacy;
d.	A foreign capital depository with significant exposure due to risks arising from nontraditional activities, or management's overall inability to monitor and control financial and operating risks;
e.	A foreign capital depository with significant exposure to declines in the economic value of its capital due to changes in interest rates;
f.	A foreign capital depository with significant exposure due to fiduciary or operational risk;
g.	A foreign capital depository that is growing rapidly, either internally or through acquisition; or,
h.	A foreign capital depository that may be adversely affected by the activities or condition of its parent company, affiliate(s), or other persons, with which it has significant business relationships.

G.	Effect on Existing Foreign Capital Depositories 

The minimum capital requirement for foreign capital depositories organized and existing prior to April 30, 2007 is $2 million, or such higher amount that the Banking Board may have imposed, until June 30, 2008.  All foreign capital depositories must comply with the minimum capital requirements set forth in this rule on and after July 1, 2008.

H.	Failure to Meet Minimum Capital Levels

A foreign capital depository that fails to comply with the minimum capital requirements set forth in this rule shall promptly notify the Commissioner, but in no event shall such notification occur later than 15 calendar days after the month end wherein the deficiency occurred.  If the institution’s core capital is at or above $1,500,000, the Commissioner will, prior to initiating formal enforcement action, consider a capital restoration plan that reasonably projects a restoration of capital compliance within ninety (90) days of the initial capital deficiency.  Such capital restoration plan shall be submitted within forty-five (45) days of the capital deficiency.  In the event core capital is less than $1,500,000, the Commissioner, may, but is not required to, accept a capital restoration plan prior to initiating formal corrective action.

FCD6	Applicants That Are Subsidiaries Of Foreign Banks [Section 11-37.5-109, C.R.S.]

A.	A subsidiary of a foreign bank may obtain a charter as a foreign capital depository if, in addition to the other requirements of this Rule, such applicant:

1.	Obtains approval from the board of governors of the Federal Reserve to operate in the United States in accordance with the Foreign Bank Supervision Enhancement Act of 1991 (12 U.S.C. section 3101, et seq.); and
2.	Submits the following information with its application for a charter:
a.	A description of the history, background and business of the foreign bank, including an organizational chart showing parent and affiliated corporations and their country of organization;
b.	Background and financial information on each controlling person of the applicant;
c.	A description of the management structure, including the board of directors and principal officers of the foreign bank and any of its affiliates that will constitute a controlling person of the applicant;
d.	A consolidated statement of the foreign bank’s financial condition as of a date within ninety (90) days prior to the date of application for a charter and audited consolidated financial statements, including statements of income and expense, for the foreign bank’s latest three fiscal years, both certified by the foreign bank’s chief executive or chief financial officer;
e.	A description of the bank regulatory system in the home country of the foreign bank, and if different, any foreign bank that owns the foreign bank whose subsidiary is applying for a charter as a foreign capital depository, describing:
(1)	The extent to which each foreign bank is subject to comprehensive regulation or supervision on a consolidated basis in the home country;
(2)	The powers and functions of the home country banking authorities, including frequency and scope of examinations;
(3)	The function of any central bank and its relationship to private banking institutions in the home country; and
(4)	The deposit insurance system, if any, in the home country.
(a)	A written statement from the banking authorities in the home country stating that they acknowledge the establishment of the proposed subsidiary foreign capital depository, and that the foreign bank is duly organized and is in good standing;
(b)	A duly executed instrument demonstrating that the foreign bank has established a registered office and registered agent in the state of Colorado; and
(c)	Such additional documents or information as the Commissioner or Banking Board may require.

FCD7		Notice of Hearings [Section 11-37.5-114, C.R.S.]

A.	Whenever a hearing is required by the Act or these Banking Board Rules, a notice thereof shall be given by the Commissioner to the party requesting the hearing, to other persons to whom notice must be given, and to such other persons as the Commissioner in his discretion may specify.  Such notice shall state the time, place, and nature of the hearing; the legal authority and jurisdiction under which the hearing is to be held; the matters constituting grounds for the hearing; and shall be delivered to such persons entitled to notice by this Rule by personal service, by registered or certified mail, or by other appropriate means, sufficiently in advance of the date set for hearing in order to comply with the appropriate provisions of both the Act and the State Administrative Procedures Act.

FCD8		Grounds For Denial [Section 11-37.5-110, C.R.S.] 

A.	In order to ensure that the business of a foreign capital depository will be conducted in accordance with the intent of the Act and to protect the privacy and other interests of depositors, the Banking Board shall deny a charter application if it finds that a person planning to own a controlling interest, operate, or manage the foreign capital depository is not of good character or financial integrity, or if the applicant for a charter is not adequately prepared to comply with or ensure compliance with Colorado law or federal law and regulations relating to money laundering and other financial crimes, or is not financially sound.

B.	The Banking Board authorizes the Commissioner and designated personnel of the Division to gather all available information relative to an application filed with the Commissioner pursuant to Banking Board Rule FCD2, including such background information and information regarding any of the applicant’s incorporators, stockholders, directors, officers, controlling persons, or other persons associated with the application as the Commissioner or designated Division personnel may deem prudent or appropriate.  Information so gathered must be reported to the Banking Board in such form and in such manner as the Banking Board directs.  The Commissioner is also authorized to make, or cause to be made, such investigations determined to be warranted under the existing circumstances and must make the information obtained available to the Banking Board.

C.	The Banking Board may grant a charter to an applicant unconditionally or upon such terms and conditions (financial or otherwise) as the Banking Board deems prudent or appropriate.

D.	Within six months after the filing of a completed application for a charter for a foreign capital depository in compliance with Banking Board Rule FCD9, unless postponed by the Banking Board for good cause, the Banking Board shall hold a public hearing to consider the application.  At least thirty (30) days prior to the hearing date, the Banking Board shall give notice of the hearing by registered or certified mail to the applicant and to such other persons as the Banking Board may designate.  The application shall be available for inspection by the public except for such portions as the Banking Board determines to be confidential as a matter of law.  At the hearing, the applicant shall have the burden to prove that the application satisfies the requirements of the Act with respect to approval of a new charter and that no reason exists why the application should be denied.  The Banking Board may consider the application, evidence presented by the applicant, any matters contained in the files of the Division of Banking, any timely protest of the application and any other evidence and arguments of law that it deems necessary to make a decision.

FCD9	Procedural Rules For Determinations:  Approval Conditions   [Section 11-37.5-114, C.R.S.]
A.	In the event that an application is incomplete in any respect or if additional information is required, the applicant will be so notified by the Division of Banking of corrective measures deemed appropriate and allowed up to sixty (60) days in which to perfect the application or provide additional information.  An extension of this sixty (60) day period may be obtained from the Division of Banking by showing good cause why it should be extended.
B.	In the event that an application for a charter for a foreign capital depository does not include information required by Banking Board Rules FCD2 and FCD6, the Banking Board may direct that if a charter is to be issued for the applicant it shall be conditioned upon the submission of such information at least sixty (60) days prior to the opening of the foreign capital depository and that the Banking Board finds said information unobjectionable.
C.	In the event that a charter for a foreign capital depository is granted to an applicant, the applicant, within five business days of receipt by the applicant of notice of approval of the charter, shall pay to the Division of Banking an initial charter fee of $96,000, less the fee paid to the Division of Banking at the time of the application pursuant to Paragraph (B) of Banking Board Rule FCD2, which fee shall be deposited in the account established pursuant to Section 11-37.5-118 C.R.S., and thereafter shall not be refunded in whole or in part.
D.	Following approval of an application for charter for a foreign capital depository, but prior to issuance of the charter, the applicant shall:
1.	Provide an attestation prepared by a certified public accountant confirming that the applicant has initial paid-in capital in an amount sufficient to comply with Banking Board Rule FCD5, or such greater amount as ordered by the Banking Board;
2.	Provide an evaluation conducted by an independent auditor or consulting firm acceptable to the Commissioner, attesting to the adequacy of the applicant’s information technology system to support the products and services described in the application pursuant to Banking Board Rule FCD2(A)(9). The scope of such evaluation shall be approved in advance by the Commissioner and include a review of internal controls and security features reasonably designed to protect the integrity and confidentiality of customer financial records;
3.	Agree in writing to provide monthly financial statements for the first three years of operations, or such longer period as may be ordered by the Commissioner. Such financials are to include a balance sheet and income statement as of month end prepared in accordance with generally accepted accounting principles, and submitted to the Division of Banking on or before the fifteenth day following the end of each month;
4.	Agree in writing to submit to the Commissioner, for prior review and approval, any material variations from the activities and strategies described in the business plan; and,

5.	Agree in writing that for the first three years of operations, or such longer time as may be ordered by the Commissioner, a background review will be conducted on any director, executive officer or controlling person not previously approved by the Banking Board. Such background review shall be conducted in accordance with Banking Board Rule FCD2(6), and a background report, along with financial statements and finger prints shall be submitted to the Commissioner for prior review and approval.

FCD10		Protests To Applications For Charter [Section 11-37.5-114, C.R.S.]

A.	Any person, firm, or corporation desiring to protest an application for charter for a proposed depository shall file with the Commissioner a notice of protest in accordance with the following schedule: 

Notice of Hearing on Application for Charter Given Prior to Hearing	
Notice of Protest Due to be Filed with Commissioner Prior to Hearing	Motion to Dismiss Due to be Filed with Commissioner Prior to Hearing	
	30-60 days	20 days	15 days	
	60-90 days	40 days	30 days	
	90 days or more	60 days	45 days	

B.	Any protester desiring to file a motion to dismiss a charter application  shall file such motion within the time provided in the schedule in Paragraph (A) of this Rule.

C.	Failure to comply with either of the requirements of this Rule may result in the denial of the right to appear, be heard, and introduce testimony at a charter application hearing.

FCD11		Procedural Rules For Discovery And Hearings [Section 11-37.5-114, C.R.S.]

A.	Hearings concerning the issuance, suspension or revocation of a foreign capital depository charter shall be conducted pursuant to the applicable provision of the State Administrative Procedures Act, including provisions applicable to the issuance of subpoenas, discovery matters, and the administration of oaths to parties and witnesses.  The Banking Board may select one of its members to serve as its delegate to decide all matters pertaining to prehearing discovery or motions by the parties and to enter such procedural orders pertaining to prehearing matters as will expedite the administrative process.

B.	Actions brought in the courts to enforce provisions of the Act shall be subject to the Colorado Rules of Civil Procedure or the Colorado Rules of Criminal Procedure, depending upon the nature of the enforcement action.

FCD12		Annual Fees  [Section 11-37.5-115, C.R.S.]

A.	A foreign capital depository shall remit an annual charter renewal fee in the amount of $10,000 to the Division of Banking in the form of a cashier’s check, or similar instrument, payable to the Treasurer, State of Colorado.  Such payment shall be made within twenty (20) days following notification by the Division.

FCD20		Annual Regulation Fees [Section 11-37.5-117, C.R.S.]

A.	A foreign capital depository shall pay to the Division an annual supervision and examination fee.  Such fee shall be commensurate with the costs incurred by the Division in conducting such examination, but not less than $500 per examination including $200 per day for each examiner engaged in examination of the depository, the actual cost of travel expenses in the event that travel outside of the state of Colorado is deemed necessary, and a reasonable amount to cover the actual costs of counsel and other Division resources.  The $500 minimum charge may be waived by the Division when such fee charge clearly exceeds the hours spent on an examination. 

FCD21		Examinations [Section 11-37.5-116, C.R.S.]

A.	The Division shall examine a foreign capital depository at least once each year and may examine or investigate a foreign capital depository more frequently at any time it deems such action necessary or desirable, except as otherwise provided in Section 11-37.5-116(5), C.R.S., which allows Federal Reserve system examinations to be substituted for the Division’s examination.

B.	At least once annually, the examination shall consist of a comprehensive review of the records, operations and affairs of the foreign capital depository, which review shall include inquiry into:

1.	Whether the depository is operating in a safe and sound manner;
2.	The accounting and financial record keeping practices of the depository;
3.	The continued accuracy of each representation contained in the application for a charter, and whether:
a.	There have been material changes in the financial condition of any director, executive officer or controlling person of the foreign capital depository;
b.	Any person not previously constituting a controlling person has become a controlling person of the foreign capital depository; or
c.	There has been a material change in the ownership of any controlling interests.
4.	Compliance with reporting and recordkeeping and the provisions of federal law pertaining to bank secrecy and money laundering referenced in Section 11-37.5-123(3)(e), C.R.S.  The Division shall evaluate whether the depository's program for compliance satisfied the criteria set forth in Banking Board Rule FCD23;
5.	The depository’s diligence in ascertaining the true identity of its customers, including, without limitation, such customers’ citizenship and residency, the legitimacy of the customers’ business and the lack of criminal record of such customers, and, in the case of corporations, controlling persons of such corporations;
6.	The implementation of the depository’s know-your-customer policy in satisfaction of the criteria set forth in Banking Board Rule FCD22 ;

7.	Implementation of the privacy requirements of Sections 11-37.5-201 through 11-37.5-217, C.R.S., including whether a comprehensive system of controls has been implemented, extended and communicated throughout the organization, and whether there have been any events of noncompliance with such sections;
8.	With respect to precious metals accounts, compliance with applicable legal requirements, including the limitations contained in Sections 11-37.5-128 and 11-37.5-129, C.R.S.;
9.	Implementation of an effective security program; and
10.	Any other matter concerning the operation, management, soundness and integrity of the foreign capital depository deemed relevant by the Division.

C.	Employees of the Division shall not divulge any information or prior notice, directly or indirectly, to any officer, director, agent, representative or employee of the foreign capital depository concerning the time or date of examination of the foreign capital depository except in accordance with internal policy prescribed by the Division.

FCD22		Criteria For Know-Your-Customer Policy  [Section 11-37.5-114, C.R.S.]

A.	A depository’s know-your-customer policy shall make adequate provision for:

1.	Identifying and verifying the true identity of customers, their sources of funds and backgrounds.  Such description shall include the name and address of the international private investigative service proposed to be used by the foreign capital depository in performing background checks on prospective depositors;
2.	Developing a profile of the customer’s anticipated transactions and determining whether the customer is a suitable client for the foreign capital depository;
3.	Monitoring customers’ depository activities to determine whether they are consistent with initial profiles and documenting any depository activity varying from such initial profiles;
4.	Complying with the reporting and other requirements of the provisions of federal law pertaining to bank secrecy and money laundering referenced in Section 11-37.5-123(3)(e), C.R.S., and
5.	Implementing a program for internal audits to ensure that the know-your-customer system is functioning properly.

B.	Implementation of such policy shall be evaluated on the following basis:

1.	Whether a comprehensive system of internal controls to assure ongoing compliance has been established and extended to employees throughout the organization;
2.	Whether defined standards have been communicated throughout the organization;
3.	Whether documented records of compliance that facilitate third-party review are maintained; and
4.	Whether proper measures are taken in the event of failure to comply with the policy.

FCD23		Criteria For Anti-Money Laundering Compliance [Section 11-37.5-114, C.R.S.]

A.	A program for compliance with the provisions of federal law pertaining to bank secrecy and money laundering referenced in Section 11-37.5-123(3)(e), C.R.S. shall be evaluated on the basis of whether the depository has established and maintained procedures reasonably designed to assure and monitor its compliance with such law.

B.	A compliance program shall, at a minimum:

1.	Provide for a system of internal controls to assure ongoing compliance;
2.	Provide for independent testing for compliance to be conducted by depository personnel or by an outside party;
3.	Designate an individual responsible for coordinating and monitoring day-to-day compliance; 
4.	Provide training for appropriate personnel; and
5.	Maximize, consistent with the requirements of the Act, the confidentiality of individual customer information. 

FCD24		Quarterly And Annual Reports  [Section 11-37.5-119, C.R.S.]

A.	Within thirty (30) days of the end of each calendar quarter ending March 31, June 30 and September 30, a foreign capital depository shall submit to the Division a quarterly report, verified as required in Section 11-37.5-119(2)(b), C.R.S., which report shall include financial statements of the foreign capital depository for and at the close of the just-concluded calendar quarter, including a balance sheet that reflects not only the assets and liabilities of the depository itself but all assets held for the benefit of, and accounts and liabilities in favor of, all customers, together with a report on operations for the just-completed quarter and the year-to-date period ending at the conclusion of the quarter, and such other information and in such format as the Division may require.

B.	A foreign capital depository shall submit to the Division an annual report, in the form prescribed by the Commissioner and verified as required in Section 11-37.5-119(2)(b), C.R.S., containing the following information, within sixty (60) days of the close of the calendar year:

1.	The information required by Banking Board Rule FCD23;
2.	Financial statements of the depository for and at the close of the just-concluded calendar year, including a balance sheet that reflects not only the assets and liabilities of the depository itself but all assets held for the benefit of, and accounts and liabilities in favor of, all customers, and a statement of income and expenses for the calendar year prepared in accordance with generally accepted accounting principles, all certified by an independent certified public accountant;
3.	A description of how the depository’s know-your-customer policy and implementation thereof meet the criteria set forth in Banking Board Rule FCD22;
4.	A description of the depository’s procedures for filing suspicious activity reports, and a description of its procedures for compliance with federal anti-money laundering law and how these procedures satisfy the criteria set forth in Banking Board Rule FCD23;
5.	A description of security measures designed to deter and prevent theft, fraud and corruption;
6.	A statement that all assets of the depository and the capital of its customers have been maintained within the State of Colorado and at locations specified in the foreign capital depository’s charter application, as amended from time to time, for the identification of the types and locations of facilities used to maintain or hold the assets of depositors, with consent authorizations, in the form required by the Division, from the owner and controlling party with respect to all facilities, submitting to such record keeping and audit requirements as the Division may require;
7.	A description of the frequency and contentA of employee training programs regarding disclosure and other aspects of financial privacy;
8.	Evidence that the foreign bank maintains a registered office and registered agent in the state in accordance with Paragraph (A)(2)(e)(4)(b) of Banking Board Rule FCD6; and
9.	Such other information as may be required by the Commissioner.

C.	In complying with the provisions of this Rule, a depository shall endeavor to maximize, consistent with the provisions of the Act, the confidentiality of individual customer information.

FCD25		Suspicious Activity Reports  [Section 11-37.5-120, C.R.S.]

A.	The circumstances under which a suspicious activity report is required to be filed with the Financial Crimes Enforcement Network of the United States Department of the Treasury and other matters concerning such reports shall be as prescribed in Banking Board Rule CB101.57.  A copy of the federal law may be obtained from the Division of Banking, 1560 Broadway, Suite 1175, Denver, Colorado, 80202.

B.	Within three (3) business days of its filing of a report with the financial crimes enforcement network, a foreign capital depository shall furnish to the Commissioner  a copy of any such report or notice.

C.	In the event an independent auditor makes a determination that suspicious activity appears to have occurred pursuant to Section 11-37.5-114(1)(e)(V)(A), C.R.S., the independent auditor shall submit notice of such determination to the Commissioner.

FCD26		Other Reports Required  [Section 11-37.5-119, C.R.S.]

A.	The Commissioner shall have the power from time-to-time to call for special reports from a foreign capital depository when, in the judgment of the Commissioner, such special reports are necessary or would be of substantial assistance to the Division in its prudent supervision of the depository.  Such reports shall be in writing, verified as required in Section 11-37.5-119(2)(b), C.R.S.

B.	A director, officer or controlling person of a depository shall furnish immediate notice to the Commissioner upon learning that any application or report submitted by or in connection with a depository contains a material misstatement or fails to include a statement or fact necessary for the application or report not to be misleading.

C.	Upon the request of the Commissioner, a foreign capital depository shall furnish to the Commissioner its records of any or all transfers or withdrawals of currency from the depository in an amount equal to or greater than $10,000.  Such records may be in a written or electronic format, and must contain the customer’s name, last-known address, and, if the customer is an individual, his or her passport number.

D.	A foreign capital depository shall report to the Division within five (5) business days any change in the stock ownership by a controlling person that either:

1.	Affects more than 20 percent of the total outstanding stock of the depository; or
2.	Results in the acquisition or disposition of more than a 50 percent interest in the total outstanding stock of the depository.

E.	Unless a specific timing requirement is imposed by statute or the regulations of the Division, Banking Board, or Commissioner, reports required by the Commissioner shall be filed within thirty (30) days of receipt of a request of a report or within thirty (30) days after the occurrence of the event that triggers the reporting requirement.