SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank
Annual Report 2010 on Form 20-F
Item 4: Information on the Company 48
Deutsche Bank Trust Company Americas
The Federal Deposit Insurance Corporation Improvement Act of 1991 (referred to as FDICIA) provides for extensive
regulation of depository institutions (such as DBTCA and its direct and indirect parent companies), including
requiring federal banking regulators to take “prompt corrective action” with respect to FDIC-insured banks that do
not meet minimum capital requirements. As an insured bank’s capital level declines and the bank falls into lower
categories (or if it is placed in a lower category by the discretionary action of its supervisor), greater limits are
placed on its activities and federal banking regulators are authorized (and, in many cases, required) to take
increasingly more stringent supervisory actions, which could ultimately include the appointment of a conservator
or receiver for the bank (even if it is solvent). In addition, FDICIA generally prohibits an FDIC-insured bank from
making any capital distribution (including payment of a dividend) or payment of a management fee to its holding
company if the bank would thereafter be undercapitalized. If an insured bank becomes “undercapitalized”, it is
required to submit to federal regulators a capital restoration plan guaranteed by the bank’s holding company.
Since the enactment of FDICIA, both of our U.S. insured banks have been categorized as “well capitalized,” the
highest capital category under applicable regulations.
DBTCA, like other FDIC-insured banks, is required to pay assessments to the FDIC for deposit insurance under
the FDIC’s Deposit Insurance Fund (calculated using the FDIC’s risk-based assessment system). As a result of
losses incurred by the Deposit Insurance Fund on account of current financial market conditions, the amount of
these assessments has been increasing. The FDIC authorized the imposition of special assessments of five basis
points on each FDIC-insured institution’s assets minus its Tier 1 capital (subject to a cap of 10 basis points of an
institution’s domestic deposits). The first special assessment was collected on September 30, 2009. Instead of
imposing additional special assessments, the FDIC issued a regulation that required FDIC-insured institutions to
prepay on December 30, 2009, their estimated quarterly risk-based assessments for the fourth quarter of 2009
and for all of 2010, 2011 and 2012, with institutions accounting for the prepayment as a prepaid expense (an asset).
Dodd-Frank changes the FDIC deposit insurance assessment framework (the amounts paid by FDIC-insured
institutions into the deposit insurance fund of the FDIC), primarily by basing assessments on an FDIC-insured
institution’s total assets less tangible equity rather than U.S. domestic deposits, which is expected to shift a greater
portion of the aggregate assessments to large FDIC-insured institutions.
The FDIC’s basic amount of deposit insurance is U.S.$ 250,000. Dodd-Frank provides for unlimited deposit insurance
for certain noninterest-bearing transaction accounts through December 31, 2012.
Other
In the United States, our U.S.-registered broker-dealers are regulated by the SEC. Broker-dealers are subject to
regulations that cover all aspects of the securities business, including sales methods, trade practices among
broker-dealers, use and safekeeping of customers’ funds and securities, capital structure, recordkeeping, the
financing of customers’ purchases and the conduct of directors, officers and employees.
In addition, our principal U.S. SEC-registered broker dealer subsidiary, Deutsche Bank Securities Inc., is a member
of the New York Stock Exchange and is regulated by the Financial Industry Regulatory Authority (FINRA) and the
individual state securities authorities in the states in which it operates. The U.S. government agencies and selfregulatory
organizations, as well as state securities authorities in the United States having jurisdiction over our
U.S. broker-dealer affiliates, are empowered to conduct administrative proceedings that can result in censure, fine,
the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer or its directors, officers
or employees.