Rev. Rul. 71-103

X, a domestic bank, was granted participating custodian status, under section 4918(f) of the Internal Revenue Code of 1954, prior to the acquisition of all its assets by Y corporation. Y immediately organized subsidiary corporation Z, a domestic bank, to which it transferred all the assets acquired from X. Z acquired all the assets, rights, and powers of X and assumed all the liabilities of X. After meeting the requirements of section 4918(f) of the Code, Z requests that it be granted participating custodian status.

Held, the participating custodian status of Z is effective beginning the same date that Z qualifies under section 4918(f) of the Code. However, since Z has all the rights, powers, and liabilities of X it is also held that Z is authorized to issue transfer of custody certificates in all situations where X could have issued such certificates had X continued in existence.