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§ 1103 TITLE 26-INTERNAL REVENUE CODE Page 673 (A) on or before July 7, 1970, b (B) in a distribution in which gain to tI such corporation with respecr to the receipt ti of such property was not recognized by cl reason of subsection (a) or (b) of section p 1101, or c (C) in exchange for all of its stock in an A exchange described in section 1101(c)(2) or a (c)(3). (2) Limitations (A) A bank holding company shall not be a e qualified bank holding corporation, unless it would have been a bank holding company on July 7, 1970, if the Bank Holding Compa- ny Act Amendments of 1970 had been in effect on such date, or unless it is a bank holding company determined solely by refer- ence to- () property acquired by it on or before July 7, 1970, (ii) property acquired by it in a distri- bution in which gain to such corporation with respect to the receipt of such proper- ty was not recognized by reason of subsec- tion (a) or (b) of section 1101, or (iii) property acquired by it in exchange for all of its stock in an exchange de- scribed in section 1101(c)(2) or (3). For purposes of this subparagraph, property held by a corporation having control of the corporation or by a subsidiary of the corpo- ration shall be treated as held by the corpo- ration. (B) A bank holding company shall not be a qualified bank holding corporation by reason of property described in subpara- graph (B) of paragraph (1) or clause (ii) of subparagraph (A) of this paragraph, unless such property was acquired in a distribu- tion with respect to stock, which stock was acquired by such bank holding company- (i) on or before July 7, 1970, (ii) in a distribution (with respect to stock held by it on July 7, 1970, or with re- spect to stock in respect of which all previ- ous applications of this clause are satis- fied) with respect to which gain to it was not recognized by reason of subsection (a) or (b) of section 1101, or (iii) in exchange for all of its stock in an exchange doscribed in section 1101(c)(2) or(3). (C) A corporation shall be treated as a qualified bank holding corporation only if the Board certifies that it satisfies the fore- going requirements of this subsection. (3) Certain successor corporations For purposes of this subsection, a successor corporation in a reorganization described in section 368(a)(1)(F) shall succeed to the status of its predecessor corporation as a qualified bank holding corporation. (c) Prohibited property For purposes of this part, the term "prohibited property" means, in the case of any bank hold- ing company, property (other than nonexempt property) the disposition of which would be nec- essary or appropriate to effectuate section 4 of the Bank Holding Company Act if such compa- ny continued to be a bank holding company eyond the period (including any extensions ereof) specified in subsection (a) of such sec- on. The term "prohibited property" also in- udes shares of any company not in excess of 5 ercent of the outstanding voting shares of ,,uch ompany if the prohibitions of section 4 of such ct apply to the shares of such company In rcess of such 5 percent. 1) Nonexempt property For purposes of this part, the term "nonex- mpt property" means- (1) obligations (including notes, drafts, bills of exchange, and bankers' acceptances) having a maturity at the time of issuance of not exceeding 24 months, exclusive of days of grace, (2) securities issued by or guaranteed as to principal or interest by a government or sub- division thereof or by any instrumentality of a government or subdivision, or (3) money, and the right to receive money not evidenced by a security or obligation (other than a security or obligation described in paragraph (1) or (2)). (e) Board For purposes of this part, the term "Board" means the Board of Governors of the Federal Reserve System. (f) Control; subsidiary For purposes of this part- (1) Control Except as provided in section 1102(c)(3), a corporation shall be treated as having control of another corporation if such corporation has control (within the meaning of section 2(a)(2) of the Bank Holding Company Act) of such other corporation. (2) Subsidiary The term "subsidiary" has the meaning given to such term by section 2(d) of the Bank Holding Company Act. (g) Election to forego grandfather provision for all property representing pre-June 30, 1968, activities Any bank holding company may elect, for pur- poses of this part and section 6158, to have the determination of whether property is property described in subsection (c) or is property eligi- ble to be distributed without recognition of gain under section 1101(b)(1) made under the Bank Holding Company Act as if such Act did not contain the proviso of section 4(a)(2) thereof. Any election under this subsection shall apply to all property described in such proviso and shall be made at such time and in such manner as the Secretary or his delegate may by regula- tions prescribe. Any such election, once made, shall be irrevocable. An election under this sub- section or subsection (h) shall not apply unless the final certification referred to in section 1101(e) or section 6158(c)(2), as the case may be, includes a certification by the Board that the bank holding company has disposed of either all banking property or all nonbanking proper- ty. (h) Election to divest all banking or nonbanking property in case of certain closely held bank holding companies Any bank holding company may elect, for pur- poses of this part and section 6158, to have the