Corporate Press Release
Credit Suisse Group announces plan to evolve its legal entity structure
Since 2012, Credit Suisse has been developing a program to evolve the Group’s legal entity structure to meet developing and future regulatory requirements. This has been prepared in discussion with FINMA and will address regulations in Switzerland (Banking Ordinance), the United States (the Federal Reserve’s Enhanced Prudential Standards for Foreign Banking Organizations) and the United Kingdom (Recovery and Resolution Planning).
Credit Suisse's legal entity structure currently consists of a global branch network, primarily used for its Private Banking business, and three main subsidiaries, primarily used for its Investment Banking business. In the future, Credit Suisse will more closely align the booking of its Investment Banking business to the region in which it originates from a client and risk management perspective.
These changes are designed to both meet future requirements for global recovery and resolution planning and result in a substantially less complex and more efficient operating infrastructure for the bank. Furthermore, Swiss banking law provides for the possibility of a limited reduction in capital requirements in the event of an improvement in resolvability which this program intends to deliver.
The key components are:
1) In Switzerland, Credit Suisse plans to create a subsidiary for its Swiss-booked business (primarily wealth management, retail and corporate and institutional clients as well as the product and sales hub in Switzerland).
2) Credit Suisse’s UK operations will remain the hub of its European investment banking business while Credit Suisse is planning that its two principal UK operating subsidiaries (Credit Suisse Securities (Europe) Ltd and Credit Suisse International) will be consolidated into one single subsidiary. The program will look to align non-European business to the appropriate entities in the Americas, primarily Credit Suisse Securities (USA) LLC, and in Asia Pacific, through the Singapore Branch of Credit Suisse AG.
3) In the United States, Credit Suisse's existing broker-dealer subsidiary, Credit Suisse Securities (USA) LLC is planned to remain a subsidiary of Credit Suisse USA Inc., a US holding company. Credit Suisse USA Inc., which will hold its US-based operating businesses, will be subject to the Federal Reserve’s final rules for Enhanced Supervision of Foreign Banking Organizations in the US. Additionally, subject to US regulatory approvals, the US derivatives businesses, currently booked in London in Credit Suisse International, are anticipated to be transferred to the US broker-dealer.
4) Credit Suisse intends to create a separately capitalized global infrastructure legal entity in Switzerland and a US subsidiary of Credit Suisse USA Inc. In principle, these will include all Shared Services functions.
5) Once the final legal framework is agreed, Credit Suisse plans to issue bail-in eligible debt out of the group holding company, Credit Suisse Group AG, to enable a single point of entry bail-in resolution strategy.
This program has been approved by the Board of Directors of Credit Suisse Group AG, but is subject to final approval by the Swiss Financial Market Supervisory Authority, FINMA. Implementation of the program is well underway, with a number of key components to be implemented from mid-2015.