[Federal Register Volume 59, Number 226 (Friday, November 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29043]
[[Page Unknown]]
[Federal Register: November 25, 1994]
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FEDERAL RESERVE SYSTEM
Signet Banking Corporation, Richmond, VA; Application To Engage
in Nonbanking Activities
Signet Banking Corporation, Richmond, Virginia (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 Sec. 225.23(a)(3) of the Board's
Regulation Y (12 CFR 225.23(a)(3)), through Signet Strategic Capital
Corporation, Richmond, Virginia (Company), to engage de novo in
providing investment advisory services with respect to futures and
options on futures on nonfinancial commodities. Applicant would engage
in these activities on a worldwide basis.
Section 4(c)(8) of the BHC Act provides that a bank holding company
may, with Board approval, engage in any activity which 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. This statutory
test requires that two separate tests be met for an activity to be
permissible for a bank holding company. First, the Board must determine
that the activity is, as a general matter, closely related to banking.
Second, the Board must find in a particular case that the performance
of the activity by the applicant bank holding company may reasonably be
expected to produce public benefits that outweigh possible adverse
effects.
A particular activity may be found to meet the ``closely related to
banking'' test if it is demonstrated that banks generally have provided
the proposed activity, that banks generally provide services that are
operationally or functionally similar to the proposed activity so as to
equip them particularly well to provide the proposed services, or that
banks generally provide services that are so integrally related to the
proposed activity as to require their provision in a specialized form.
National Courier Ass'n v. Board of Governors, 516 F.2d 1229, 1237 (D.C.
Cir. 1975). 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 providing investment advisory services with respect to
futures and options on futures on nonfinancial commodities is closely
related to banking. See Swiss Bank Corporation, 77 Federal Reserve
Bulletin 126 (1991); J.P. Morgan & Co., Incorporated, 80 Federal
Reserve Bulletin 151 (1994). Applicant states that Company only would
provide advisory services with respect to previously approved
contracts. Applicant also states that Company would provide investment
advisory services in accordance with the limitations of
Secs. 225.25(b)(19)(i) & (ii) of Regulation Y.
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. Sec. 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 enable Applicant to offer its
customers a broader range of products. 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 interest, or unsound banking practices.
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 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, DC 20551, not later than December
9, 1994. Any request for a hearing on this application must, as
required by Sec. 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 Richmond.
Board of Governors of the Federal Reserve System, November 18,
1994.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 94-29043 Filed 11-23-94; 8:45 am]
BILLING CODE 6210-01-F
