Addendum 1 – Resumes of directors, key personnel, and shareholders
Addendum 2- Due Diligence on Connected Persons
Addendum 3- Business Continuity Plan
Addendum 4- List of Services Requested Under Act 273 (Puerto Rico Bank License Only)
The services requested should be a subset to the total services an IFE can offer. The IFE should request ONLY those services it plans to offer in year 1 and year 2. In most cases, only services that will be offered in year 1 will be approved.
Note that regulators will attempt to reduce the number of services applied for. They want an IFE to be as focused as possible and only offer a small number of services. Therefore, you must make a strong case for every service you wish to offer.
Here is a complete list of services (this is specific to an International Financial Entity License from Puerto Rico):
1. Accept deposits from foreign individuals in accounts as well as demand or fixed-term deposits and interbank deposits of funds, or otherwise, borrow money from international financial institutions and any other foreign person;
2. Make, procure, place, guarantee, secure, bond or service loans;
3. Issue, confirm, give notice, negotiate or refinance letters of credit, including transactions for the financing of exports, even if the beneficiary is a domestic person;
4. Discount, rediscount, deal or otherwise trade in money orders, bills of exchange and similar instruments;
5. Invest in securities, stocks, notes, and bonds of the Government;
6. Carry out any banking transactions allowed by the Act in the currency of any country, or gold or silver, and participate in foreign currency trade;
7. Underwrite, distribute, and otherwise trade in securities, notes, debt instruments, drafts and bills of exchange issued by a foreign person for final purchase outside of the jurisdiction;
8. Engage in trade financing of import, export, barter and exchange of raw materials and finished products activities with domestic persons;
9. Engage in any activity of a financial nature outside of the jurisdiction which would be allowed to be done, directly or indirectly, by a bank holding company or by a foreign office or subsidiary of a United States bank under applicable United States law;
10. Act as a fiduciary, executor, administrator, registrar of stocks and bonds, property custodian, assignee, trustee, an attorney-in-fact, agent, or in any other fiduciary capacity;
11. Acquire and lease personal property at the request of a lessee who is a foreign person, pursuant to a financial lease agreement that complies with the Regulations;
12. Buy or sell securities and provide investment advice in relation to such transactions;
13. Act as a clearinghouse in relation to financial contracts of instruments of foreign persons;
14. Organize, manage, and provide management services to international financial institutions, and other types of financial entities located outside of the jurisdiction, such as investment companies and mutual funds;
15. Engage in such other activities as are expressly authorized by the Regulations or order of the Director/Commissioner, or are incidental to the execution of the services authorized by the Act;
16. Participate in the granting and/or securing of loans that originate and/or are secured by the stated governmental authorities mentioned in the Act;
17. Establish branches outside of the jurisdiction, in the continental United States or its possessions, or other foreign countries. Puerto Rico excludes the acceptance of deposits for these branches;
18. Establish a service unit or office in the jurisdiction, in which only specific operations related to the services of the international financial institutions shall be conducted;
19. Provide to other international financial institutions or to foreign persons outside of the jurisdiction, those services of a financial nature, as these are defined and generally accepted in the banking industry of the United States and the jurisdiction, and which are not listed in this section.
20. Accept properly collateralized deposits or otherwise borrow duly secured money from the Government Development Bank for Puerto Rico and the Economic Development Bank for Puerto Rico;
21. Make or place deposits in, and otherwise give money on loan to, the Government Development Bank for Puerto Rico and the Economic Development Bank for Puerto Rico, any international financial institution, or any bank, including banks organized under the laws of Puerto Rico, and branches in Puerto Rico of banks that are foreign persons;
22. Participate in the granting and/or securing of loans originated and/or secured by any bank considered a domestic person, excluding transactions between any bank considered a domestic person and an affiliated entity;
23. Acquire classified or bad loans, as well as any personal or real property (tangible and intangible) that serves as collateral for such loans, from any bank considered a domestic person or from any branch of a foreign bank in Puerto Rico. This includes the execution of the collateral related to the aforementioned loans and the sale of property serving as collateral for said loans;
24. Finance, through loans or financial securities, projects in areas of priority for the Government of Puerto Rico in those cases designated as extraordinary by the Secretary of the Treasurer and the Commissioner;
25. Engage in rendering the following services: (i) asset management; (ii) alternative investment management; (iii) management of private capital investment activities; (iv) management of hedging funds or high risk funds; (v) pools of capital investment; (vi) administration of trusts that serve to convert different groups of assets into securities; and (vii) escrow accounts administration services; provided, that such services are offered to foreign persons.
1. You must ask for #1, accept deposits from the general public to use the word “bank” in your name.
2. #25 would be used by a family office, investment fund, or a captive bank only. Standard international banks do not request this category of services.