The Bank of Tokyo-Mitsubishi UFJ, Ltd. Announces Compliance with U.S. Enhanced Prudential Standards: Transfer of the Ownership of U.S. Subsidiaries and Affiliate

TOKYO--()--Mitsubishi UFJ Financial Group, Inc. (MUFG) hereby announces that it has decided to designate MUFG Americas Holdings Corporation (MUAH), a U.S. subsidiary of MUFG’s direct subsidiary, The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), as its U.S. intermediate holding company which is required to be established under the U.S. Enhanced Prudential Standards (the EPS Rules). Subject to all required regulatory approvals and necessary decisions by MUFG’s subsidiaries in Japan and the U.S., BTMU, Mitsubishi UFJ Trust and Banking Corporation (MUTB), and Mitsubishi UFJ Securities Holdings Co., Ltd. (MUSHD) will transfer the ownership of their U.S. subsidiaries and affiliate to MUAH.
Accordingly with the above, BTMU made decisions BTMU will own through the MUAH the U.S. subsidiaries, which are currently owned by MUTB and MUSHD, as its subsidiaries.

1. Ownership transfer

(1)

Effective as of July 1, 2016, the ownership of the U.S. subsidiaries and affiliate is planned to be transferred as follows:

U.S. subsidiaries and affiliate to be transferred to MUAH

 

Current ownership of
voting rights

 

After the change in
shareholding

BTMU Capital Corporation
BTMU Securities, Inc. BTMU

100%

MUAH(*1)

100%

MUFG Americas Capital Company  

 

   
Morgan Stanley MUFG Loan Partners, LLC

BTMU

50%

MUAH(*1)

50%

Morgan Stanley

50%

Morgan Stanley

50%

MUFG Fund Services (USA) LLC(*2)

MUTB(*3)

100%

MUAH(*4)

100%

Mitsubishi UFJ Securities (USA), Inc.(*5)  

MUSHD

100%

 

MUAH(*4)

100%

  (*1)   BTMU will transfer its shares and ownership interests in its U.S. subsidiaries and affiliate (excluding MUAH and its subsidiaries) to MUAH as a contribution-in-kind, in consideration for which MUAH will issue new shares to BTMU.
(*2) Prior to the ownership transfer, MUFG Fund Services (US) Inc. and Davis Meridian Fund Services, Inc., as dissolving companies, will be merged into MUFG Fund Services (USA) LLC, as the surviving company
(*3) As of March 25, 2016, MUTB’s ownership is through Mitsubishi UFJ Fund Services Holdings Limited (located in Bermuda, British overseas territory).
(*4) MUTB and MUSHD will execute a distribution-in-kind of the shares and ownership interests in MUFG Fund Services (USA) LLC and Mitsubishi UFJ Securities (USA), Inc. to MUFG. Thereafter, MUFG will transfer such shares and ownership interests to MUAH as a contribution-in-kind, in consideration for which MUAH will issue new shares to MUFG.
(*5) Change of legal name, from Mitsubishi UFJ Securities (USA), Inc. to MUFG Securities Americas Inc., effective as of July 1, 2016, has been announced.
 

(2)

As a result of the ownership transfer described above, the share ownership in MUAH is expected to be as follows:

Current ownership of voting rights   After the change in shareholding
BTMU 100%

MUFG

3.8%

 

BTMU

96.2%

 

2. Summary of EPS Rules
According to the final EPS Rules announced by the U.S. Federal Reserve Board in February 2014, foreign banking organizations with both consolidated gross assets of and gross U.S. assets, excluding those of their U.S. branches, of USD 50 billion or more are required to establish a U.S. intermediate holding company (IHC) over the U.S. subsidiaries they own or control by July 1, 2016. The IHC is then required to submit capital plans on an IHC consolidated basis, as well as comply with various risk management rules, including in respect of liquidity risk. MUFG will execute this ownership transfer and will comply with the EPS Rules.

3. Future prospects
The impact of the ownership transfer on the financial results of MUFG on a consolidated basis is expected to be negligible. There will be no changes in the existing products and services to MUFG customers. In the U.S., MUFG will further strengthen the collaboration of its group entities and will respond to the customers’ ever increasing global financial needs, thereby striving to enhance its presence.

Contacts

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Jun Kobayashi, +81-3-3240-1111
Chief Manager
Corporate Administration Division

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