Section 28.20 - Maintenance of assets(a)General rule.(1) For prudential, supervisory, or enforcement reasons, the OCC may require a foreign bank to hold certain assets in the state in which its Federal branch or agency is located. Those assets may only consist of currency, bonds, notes, debentures, drafts, bills of exchange, or other evidence of indebtedness including loan participation agreements or certificates, or other obligations payable in the United States or in United States funds or, with the approval of the OCC, funds freely convertible into United States funds.(2) If the OCC requires asset maintenance, the amount of assets held by a foreign bank shall be prescribed by the OCC after consideration of the aggregate amount of liabilities of the Federal branch or agency, payable at or through the Federal branch or agency. To determine the aggregate amount of liabilities for purposes of this section, the foreign bank shall include bankers' acceptances, but exclude liabilities to the head office and any other branches, offices, agencies, subsidiaries, and affiliates of the foreign bank.(b)Valuation. For the purposes of this section, marketable securities must be valued at principal amount or market value, whichever is lower.(c)Credits. In determining compliance with the asset maintenance requirements, the OCC will give the Federal branch or agency credit for:(1) Capital equivalency deposits maintained pursuant to § 28.15 ;(2) Reserves required to be maintained by the Federal branch or agency pursuant to the FRB's authority under 12 U.S.C. 3105(a) ; and(3) Assets pledged, and surety bonds payable, to the FDIC to secure the payment of domestic deposits.(d)Exclusions. In determining eligible assets for purposes of this section, the Federal branch or agency shall exclude:(1) Any amount due from the head office or any other branch, office, agency, subsidiary, or affiliate of the foreign bank;(2) Any classified asset;(3) Any asset that, in the determination of the OCC, is not supported by sufficient credit information;(4) Any deposit with a bank in the United States, unless that bank has executed a valid waiver of offset agreement;(5) Any asset not in the Federal branch's actual possession unless the branch holds title to the asset and maintains records sufficient to enable independent verification of the branch's ownership of the asset, as determined at the most recent examination; and(6) Any other particular asset or class of assets as provided by the OCC, based on a case-by-case assessment of the risks associated with the asset.(e)International banking facility. Unless specifically exempted by the OCC, the eligible assets and liabilities of any international banking facility operated through the Federal branch or agency must be included in the computation of eligible assets and liabilities for purposes of this section.61 FR 19532, May 2, 1996, as amended at 68 FR 70700 , Dec. 19, 2003