Code of Massachusetts Regulations
209 CMR - DIVISION OF BANKS AND LOAN AGENCIES
Title 209 CMR 33.00 - Conversion By Co-operative Banks And Savings Banks From Mutual To Stock Form
Section 33.29 - Issuance of Securities to Other than the General Public

Universal Citation: 209 MA Code of Regs 209.33

Current through Register 1531, September 27, 2024

(1) A subsidiary banking institution may issue securities to other than the general public, as may be approved by the Commissioner. Such issuance of securities shall not be subject to the provisions of 209 CMR 33.27(2), (3)(b) and any other provision of 209 CMR 33.21 through 33.31 deemed inapplicable by the Commissioner. The Commissioner may provide for such classifications, differentiations, adjustments or distinctions for any class of transactions which the Commissioner deems necessary to carry out the provisions of 209 CMR 33.21 through 33.32. Subject to the Commissioner's approval, the following transactions are authorized:

(a) An issuance of securities in connection with an employee stock option or other employee benefit plan which conforms to applicable provisions of 209 CMR 33.28;

(b) An issuance to the holders of convertible or other securities of the subsidiary banking institution;

(c) An issuance in connection with a merger, acquisition or reorganization as part of a corporate transaction to be approved by the Commissioner; and

(d) An issuance as part of a private placement of securities with accredited investors as that term is defined in the Securities Act of 1933 as amended, or rules and regulations issued thereunder.

(2) In any transaction under 209 CMR 33.29(1), in which securities of the subsidiary banking institution are issued before an offering has been made to the eligible account holders and to the general public, the Commissioner may impose such conditions or requirements as he or she may determine in order to comply with the review standard found in 209 CMR 33.29(4). Such conditions or requirements may include, but are not limited to, the following:

(a) The securities may be limited to preferred, nonvoting shares which are not convertible to voting shares.

(b) The securities may be required to constitute Tier 1 Capital under applicable regulations of federal bank regulatory agencies.

(c) The total aggregate amount of securities issued under 209 CMR 33.29(1) or sold under 209 CMR 33.29(3) may be limited to 25% of less of the outstanding voting securities of the subsidiary banking institution.

(d) The purchase of any such securities by directors, corporators, officers, employees or associates of a mutual holding company or its subsidiary banking institution may require the prior approval of the Commissioner; and

(e) The subsidiary banking institution may be required to demonstrate to the Commissioner's satisfaction why an issuance under 209 CMR 33.29 is more advantageous than a stock issuance which includes an offer to the general public.

(3) A mutual holding company may directly sell securities of its subsidiary banking institution and receive the proceeds thereof, in any securities issuance approved under 209 CMR 33.29(1).

(4) In reviewing an application under 209 CMR 33.29, the Commissioner shall consider the effect on the subsidiary banking institution's financial and managerial resources and future prospects, the effect of the issuance upon the subsidiary banking institution, the insurance risk to the relevant federal deposit insurance fund and the converting bank's excess deposit insurer, the convenience and needs of the community to be served and whether such issuance would be inequitable or detrimental to the members of the mutual holding company or its subsidiary banking institution or would adversely effect such members' liquidation rights under M.G.L. c.167H, § 2.

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