Capital One 2012 Annual Report Download - page 31

Additionally, COBNA and CONA are “banks” within the meaning of Chapter 13 of Title 6.1 of the Code of
Virginia governing the acquisition of interests in Virginia financial institutions (the “Financial Institution
Holding Company Act”). The Financial Institution Holding Company Act prohibits any person or entity from
acquiring, or making any public offer to acquire, control of a Virginia financial institution or its holding company
without making application to, and receiving prior approval from, the Virginia Bureau of Financial Institutions.
USA PATRIOT Act of 2001
The USA PATRIOT Act of 2001 (the “Patriot Act”) contains sweeping anti-money laundering and financial
transparency laws as well as enhanced information collection tools and enforcement mechanisms for the U.S.
government, including: due diligence requirements for private banking and correspondent accounts; standards for
verifying customer identification at account opening; rules to promote cooperation among financial institutions,
regulators, and law enforcement in identifying parties that may be involved in terrorism or money laundering;
reporting requirements applicable to the receipt of coins and currency of more than $10,000 in nonfinancial
trades or businesses; and more broadly applicable suspicious activity reporting requirements.
The Department of Treasury, in consultation with the Federal Reserve and other federal financial institution
regulators, has promulgated rules and regulations implementing the Patriot Act that prohibit correspondent
accounts for foreign shell banks at U.S. financial institutions; require financial institutions to maintain certain
records relating to correspondent accounts for foreign banks; require financial institutions to produce certain
records upon request of the appropriate federal banking agency; require due diligence with respect to private
banking and correspondent banking accounts; facilitate information sharing between government and financial
institutions; require verification of customer identification; and require financial institutions to have an anti-
money laundering program in place.
Non-Bank Activities
Our non-bank subsidiaries are subject to supervision and regulation by various other federal and state authorities.
Capital One Investment Services LLC, Capital One Southcoast, Inc. and Capital One Sharebuilder, Inc. are
registered broker-dealers regulated by the SEC and the Financial Industry Regulatory Authority. Our broker-
dealer subsidiaries are subject to, among other things, net capital rules designed to measure the general financial
condition and liquidity of a broker-dealer. Under these rules, broker-dealers are required to maintain the
minimum net capital deemed necessary to meet their continuing commitments to customers and others, and are
required to keep a substantial portion of their assets in relatively liquid form. These rules also limit the ability of
broker-dealers to transfer capital to parent companies and other affiliates. Broker-dealers are also subject to other
regulations covering their business operations, including sales and trading practices, public offerings, publication
of research reports, use and safekeeping of client funds and securities, capital structure, record-keeping and the
conduct of directors, officers and employees.
Capital One Asset Management LLC, which provides investment advice to institutions, foundations, endowments
and high net worth individuals, is an SEC-registered investment adviser regulated under the Investment Advisers
Act of 1940. ShareBuilder Advisors, LLC is also an SEC-registered investment adviser. Capital One Financial
Advisors LLC is a state-registered investment adviser.
Finally, our insurance agency subsidiaries are regulated by state insurance regulatory agencies in the states in
which we operate. Capital One Agency LLC is a licensed insurance agency that provides both personal and
business insurance services to retail and commercial clients and is regulated by the New York State Department
of Financial Services in its home state and by the state insurance regulatory agencies in the states in which it
operates.
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