[Federal Register Volume 59, Number 4 (Thursday, January 6, 1994)]
[Notices]
[Pages 750-751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-217]
[[Page Unknown]]
[Federal Register: January 6, 1994]
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FEDERAL RESERVE SYSTEM
The Sumitomo Bank, Limited; Application To Engage in Certain
Nonbanking Activities
The Sumitomo Bank, Limited, Osaka, Japan (Applicant), has applied
pursuant to section 4(c)(8) of the Bank Holding Company Act (12 U.S.C.
1843(c)(8)) (BHC Act) and section 225.23 of the Board's Regulation Y
(12 CFR 225.23), for approval to engage through its wholly owned
subsidiary, Sumitomo Bank Securities, Inc., New York, New York
(Company), in underwriting and dealing in, to a limited extent, certain
municipal revenue bonds, 1-4 family mortgage-related securities,
consumer receivable-related securities, and commercial paper. Applicant
proposes to conduct the activities on a world-wide basis.
Closely Related to Banking Standard
Section 4(c)(8) of the BHC Act provides that a bank holding company
may, with Board approval, engage in any activity ``that the Board after
due notice and opportunity for hearing has determined (by order or
regulation) to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto''. In determining
whether a proposed activity is closely related to banking for purposes
of the BHC Act, the Board considers, inter alia, the matters set forth
in National Courier Association v. Board of Governors of the Federal
Reserve System, 516 F.2d 1229 (D.C. Cir. 1975). These considerations
are:
(1) Whether banks generally have in fact provided the proposed
services,
(2) Whether banks generally provide services that are operationally
or functionally so similar to the proposed services as to equip them
particularly well to provide the proposed services; and
(3) Whether banks generally provide services that are so integrally
related to the proposed services as to require their provision in a
specialized form. See 516 F.2d at 1237. In addition, the Board may
consider any other basis that may demonstrate that the activity has a
reasonable or close relationship to banking or managing or controlling
banks. Board Statement Regarding Regulation Y, 49 FR 806 (1984).
Applicant maintains that the Board previously has determined by
order that the proposed activities, when conducted within the
limitations established by the Board, are closely related to banking
and consistent with section 20 of the Glass-Steagall Act (12 U.S.C.
377). See, e.g., Citicorp, 73 Federal Reserve Bulletin 473 (1987),
aff'd sub nom. Securities Industry Ass'n v. Board of Governors of the
Federal Reserve System, 839 F.2d 47 (2d Cir. 1988), cert. denied, 486
U.S. 1059 (1988); Order Approving Modifications to the Section 20
Orders, 75 Federal Reserve Bulletin 751 (1989); The Sanwa Bank,
Limited, 76 Federal Reserve Bulletin 568 (1990); Order Approving
Modifications to the Section 20 Orders, 79 Federal Reserve Bulletin 226
(1993); and Supplement to Order Approving Modifications to Section 20
Orders, 79 Federal Reserve Bulletin 360 (1993).
Proper Incident to Banking Standard
In order to approve the proposal, the Board must determine that the
proposed activities to be conducted by Company ``can reasonably be
expected to produce benefits to the public, such as greater
convenience, increased competition, or gains in efficiency, that
outweigh possible adverse effects, such as undue concentration of
resources, decreased or unfair competition, conflicts of interests, or
unsound banking practices.'' 12 U.S.C. 1843(c)(8).
Applicant believes that the proposal will produce public benefits
that outweigh any potential adverse effects. In particular, Applicant
maintains that the proposal will enhance competition and result in
greater convenience to Applicant's customers. In addition, Applicant
states that the proposed activities will not result in adverse effects
such as an undue concentration of resources, decreased or unfair
competition, conflicts of interests, or unsound banking practices, and
that Company will conduct the proposed activities in accordance with
prudential limitations designed to safeguard against such potential
adverse effects that have been relied upon by the Board in similar
previous cases. See, e.g., Citicorp, supra; The Sanwa Bank, Limited,
supra. In this regard, Applicant has requested that one of the
prudential limitations be modified to permit one officer or one
director of one of its United States banking affiliates to serve as a
director of Company, a modification which Applicant maintains is
consistent with prior Board actions. See, e.g., Synovus Financial
Corp., et al., 77 Federal Reserve Bulletin 954 (1991).
In publishing the proposal for comment, the Board does not take a
position on issues raised by the proposal. Notice of the proposal is
published solely in order to seek the views of interested persons on
the issues presented by the application, and does not represent a
determination by the Board that the proposal meets or is likely to meet
the standards of the BHC Act.
Any comments or requests for hearing should be submitted in writing
and received by William W. Wiles, Secretary, Board of Governors of the
Federal Reserve System, Washington, D.C. 20551, not later than January
26, 1994. Any request for a hearing on this application must, as
required by section 262.3(e) of the Board's Rules of Procedure (12 CFR
262.3(e)), be accompanied by a statement of the reasons why a written
presentation would not suffice in lieu of a hearing, identifying
specifically any questions of fact that are in dispute, summarizing the
evidence that would be presented at a hearing, and indicating how the
party commenting would be aggrieved by approval of the proposal. This
application may be inspected at the offices of the Board of Governors
or the Federal Reserve Bank of San Francisco.
Board of Governors of the Federal Reserve System, December 30,
1993.
Jennifer J. Johnson,
Associate Secretary of the Board.
[FR Doc. 94-217 Filed 1-5-94; 8:45 am]
BILLING CODE 6210-01-F
