94-10921. FEDERAL RESERVE SYSTEM  

  • [Federal Register Volume 59, Number 87 (Friday, May 6, 1994)]
    [Unknown Section]
    [Page 0]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 94-10921]
    
    
    [[Page Unknown]]
    
    [Federal Register: May 6, 1994]
    
    
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    FEDERAL DEPOSIT INSURANCE CORPORATION
     
    
    FEDERAL RESERVE SYSTEM
    
    BankAmerica Corporation, San Francisco, California; Application To 
    Engage in Nonbanking Activities
    
        BankAmerica Corporation, San Francisco, California (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)) to engage de novo through BA 
    Futures, Inc., Chicago, Illinois (Company), a futures commission 
    merchant registered under the Commodity Exchange Act (7 U.S.C. Sec.  1 
    et seq.), in executing and clearing, and clearing without executing the 
    following contracts on the following exchanges: Light Sweet Crude Oil 
    Futures, Options on Light Sweet Crude Oil Futures, No. 2 Heating Oil 
    Futures and Options on No. 2 Heating Oil Futures on the New York 
    Mercantile Exchange; Corn Futures, Options on Corn Futures, Wheat 
    Futures, Options on Wheat Futures, Soybean Futures and Options on 
    Soybean Futures on the Chicago Board of Trade; and Live Cattle Futures, 
    Options on Live Cattle Futures, Feeder Cattle Futures, Options on 
    Feeder Cattle Futures, Live Hog Futures and Options on Live Hog Futures 
    on the Chicago Mercantile Exchange. Applicant proposes to conduct these 
    activities throughout the world.
        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 have generally 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 activity, 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, January 5, (1984).
        The Board previously has approved acting as a futures commission 
    merchant in executing and clearing the proposed commodity contracts. 
    See Bank of Montreal, 79 Federal Reserve Bulletin 1049 (1993); J.P. 
    Morgan & Co. Incorporated, 80 Federal Reserve Bulletin 151 (1994)(J.P. 
    Morgan). The Board also previously has approved providing a combination 
    of advisory services regarding nonfinancial commodity derivatives and 
    acting as a futures commission merchant in the execution and clearance 
    of these derivatives. J.P. Morgan.
        Applicant proposes to conduct the proposed activities in a manner 
    that differs slightly from what previously has been approved by the 
    Board. Specifically, in J.P. Morgan the Board conditioned approval of 
    the application on J.P. Morgan's commitment that it would not perform 
    execution, clearance or investment advisory services for commodity 
    funds (or commodity pools) owned, sponsored by, or otherwise affiliated 
    with, J.P. Morgan. In contrast, Applicant proposes that Company's 
    customers would include a managed commodity fund formed outside of the 
    United States, sponsored by an affiliate of Applicant.
        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, D.C. 20551, not later than May 23, 
    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 Chicago.
    
        Board of Governors of the Federal Reserve System, May 2, 1994.
    Jennifer J. Johnson,
    Associate Secretary of the Board.
    [FR Doc. 94-10921 Filed 5-5-94; 8:45 am]
    BILLING CODE 6210-01-F
    
    
    

Document Information

Published:
05/06/1994
Department:
Federal Deposit Insurance Corporation
Entry Type:
Uncategorized Document
Document Number:
94-10921
Pages:
0-0 (1 pages)
Docket Numbers:
Federal Register: May 6, 1994