[Federal Register Volume 60, Number 89 (Tuesday, May 9, 1995)]
[Notices]
[Pages 24632-24633]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11347]
=======================================================================
-----------------------------------------------------------------------
FEDERAL RESERVE SYSTEM
The Chase Manhattan Corporation; Application to Engage in
Nonbanking Activities
The Chase Manhattan Corporation, New York, New York (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 acquire U.S. Trust Corporation's
wholly-owned direct subsidiary, Mutual Funds Services Company, Boston,
Massachusetts (MF Services), and thereby engage in providing
administrative services to mutual funds; and to acquire U.S. Trust
Corporation's wholly-owned direct subsidiary U.S. Trust Company of
Wyoming, Cody, Wyoming (UST-WY), and thereby engage in serving as an
investment advisor pursuant to Sec. 225.25(b)(4)(ii) of the Board's
Regulation Y. Applicant states that the proposed administrative
services include, but are not limited to, with respect to any
investment company customer, computing the investment company's net
asset value and performance data, coordinating communications and
activities between [[Page 24633]] its investment advisor and other
service providers, accounting and recordkeeping, disbursing payments
for the investment company's expenses, providing office space for the
investment company, and preparing and filing tax and regulatory reports
for the investment company. Applicant states that the proposed
investment advisory activities include serving as the nominal
administrator for closed-end investment companies established pursuant
to Wyoming law. All of these activities are to be conducted throughout
the United States.
Section 4(c)(8) of the BHC Act provides that a bank holding company
may, with prior 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). The Board also 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 determined by order that providing
administrative services to mutual funds and closed-end investment
companies, when conducted within the limitations established by the
Board in its previous orders, are closely related to banking. State
Street Boston Corporation, 81 Federal Reserve Bulletin 297 (1995),
Mellon Bank Corporation, 79 Federal Reserve Bulletin 626 (1993). In
addition, the Board previously has determined by regulation that
investment advisory activities, when conducted within the limitations
established by the Board in its regulations and in related
interpretations and orders, are closely related to banking for purposes
of section 4(c)(8) of the BHC Act. See 12 CFR 225.25(b)(4). Applicant
maintains that it will conduct all of the proposed activities in
conformity with the conditions and limitations established by the Board
by regulation or in prior cases.
In order to satisfy the proper incident to banking test, section
4(c)(8) of the BHC Act requires the Board to find that the performance
of the activities by Applicant 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 interest, or unsound banking practices.
Applicant believes that the proposed activities will benefit the public
by promoting competition and lowering costs. Applicant also believes
that approval of this application will allow Applicant to provide a
wider range of services and added convenience to its customers.
Applicant believes that the proposed activities will not result in any
unsound banking practices or other adverse effects.
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,
1995. 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 New York.
Board of Governors of the Federal Reserve System, May 3, 1995.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 95-11347 Filed 5-8-95; 8:45 am]
BILLING CODE 6210-01-F
