99-31960. Operating Subsidiary Notice

[Federal Register Volume 64, Number 236 (Thursday, December 9, 1999)]
[Notices]
[Pages 69071-69072]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31960]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency
[Docket No. 99-18]


Operating Subsidiary Notice

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Notice and request for public comment on an operating 
subsidiary application.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) requests 
public comment concerning an application filed by First Tennessee Bank, 
N.A., Memphis, Tennessee (First Tennessee Bank) to expand the 
activities of its operating subsidiary, First Tennessee Securities 
Corporation (FTSC), to underwrite and deal in, to a limited extent, all 
types of debt and equity securities (other than ownership interests in 
open-end investment companies).

DATES: Comments should be submitted by January 10, 2000.

ADDRESSES: Written comments regarding the application should be 
submitted to the Office of the Comptroller of the Currency, 
Communications Division, Docket No. 99-18, 250 E Street, SW, 
Washington, DC 20219. In addition, comments may be sent by facsimile 
transmission to fax number [phone] or by internet mail to 
[e-mail]. A copy of the application and comments 
received will be available for inspection and copying at the OCC's 
Public Reference Room, 250 E Street, SW, Washington, DC 20219. 
Appointments to inspect the application and review any comments 
received can be made by calling [phone].

FOR FURTHER INFORMATION CONTACT: Beth Kirby, Senior Attorney, 
Securities and Corporate Practices Division, [phone], or Stephen 
Lybarger, NBE--

[[Page 69072]]

Licensing Expert, Bank Organization and Structure, [phone].

SUPPLEMENTARY INFORMATION: First Tennessee Bank has applied to the OCC, 
pursuant to 12 CFR 5.34(f), to expand the activities of its operating 
subsidiary, FTSC, to underwrite and deal in, on a limited basis, all 
types of debt and equity securities (other than ownership interests in 
open-end investment companies).
    FTSC currently is authorized to underwrite and deal in, to a 
limited extent, municipal revenue bonds and to engage in certain bank 
permissible activities, including the following:
    (1) Arranging commercial mortgage loans for First Tennessee Bank 
and outside customers, including long-term, fixed rate commercial real 
estate loans extended by life insurance companies and securitizing such 
loans;
    (2) Engaging in private placements of corporate debt securities, 
trust preferred securities, and leases, including structuring, 
documenting, and placing fixed rate secured and unsecured term debt, 
fixed rate subordinated debt, and fixed rate mezzanine debt for 
commercial customers, as well as engaging in large lease transactions 
and loan syndications and participations;
    (3) Providing advisory services in connection with mergers and 
acquisitions activities, including valuations, acquisitions, and sales 
such as the acquisition or marketing of branches for financial 
institutions;
    (4) Buying and selling all types of securities on an agency or 
``riskless principal'' basis;
    (5) Engaging as principal in investing and trading activities in 
bank eligible securities;
    (6) Advising, structuring, arranging and executing transactions, as 
agent or principal, with respect to derivative instruments;
    (7) Underwriting, dealing, trading, investing and public finance 
activities in bank eligible securities, including securities of states 
and political subdivisions thereof which meet the definition of general 
obligation securities as defined by the OCC; and
    (8) Securitizing and selling pools of consumer-receivable loans, 
including credit card loans, auto loans, home equity lines of credit, 
and 1-4 family residential mortgages, and buying and selling 
securitized assets.

Decision of the Comptroller of the Currency on the Application of 
First Tennessee Bank, N.A., Memphis, TN To Establish an Operating 
Subsidiary (April 12, 1999), OCC Conditional Approval No. 309, 
Interpretations and Actions, May 1999, Vol. 12, No. 5 (``First 
Tennessee Decision'')

    Under 12 CFR 5.34(f), the OCC may permit a national bank to conduct 
an activity through its operating subsidiary that is different from 
that permissible for the parent national bank, subject to the 
additional requirements specified in 12 CFR 5.34(f), if the OCC 
concludes that the activity is part of or incidental to the business of 
banking or is permitted under other statutory authority.
    In considering the proposed activity, the OCC will consider the 
particular activity at issue and will weigh:
    (1) The form and specificity of the restriction applicable to the 
parent bank;
    (2) Why the restriction applies to the parent bank; and
    (3) Whether it would frustrate the purpose underlying the 
restriction on the parent bank to permit a subsidiary of the bank to 
engage in the particular activity.
    The OCC's evaluation of these factors will also take into account 
the safety and soundness implications of the activity for the operating 
subsidiary and the parent national bank, the regulatory safeguards that 
apply to the operating subsidiary and to the activity itself, any 
conditions that may be imposed in conjunction with an application 
approval, and any additional undertakings by the bank or the operating 
subsidiary that address the foregoing factors.
    For activities not previously approved by the OCC, the OCC provides 
public notice and opportunity for comment on the application by 
publishing notice of the application in the Federal Register. In 
publishing notice of the application, the OCC does not take a position 
on issues raised by the proposal. Notice is published solely to seek 
the views of interested persons on the issues presented and does not 
represent a determination by the OCC that the proposal meets, or is 
likely to meet, the criteria outlined above. Interested parties are 
invited to comment on any aspect of the application.1
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    \1\ The OCC notes that the Bank's proposal will be permissible 
under the standards of the recently enacted Gramm-Leach-Bliley Act 
(``G-L-B Act''). The Bank meets (and where applicable, all its 
insured depository institution affiliates meet) the standards set 
forth in section 121 of the G-L-B Act for a national bank to have a 
``financial subsidiary'' engaged in the types of activities that 
include those proposed by the Bank. Section 121 of the Act will 
become effective March 11, 2000.
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    Dated: November 17, 1999.

John D. Hawke, Jr.,
Comptroller of the Currency.
[FR Doc. 99-31960 Filed 12-8-99; 8:45 am]
BILLING CODE 4810-33-P