[Federal Register Volume 61, Number 121 (Friday, June 21, 1996)]
[Notices]
[Pages 31942-31943]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15848]
-----------------------------------------------------------------------
FEDERAL RESERVE SYSTEM
Notice to Engage in Nonbanking Activities
Waterhouse Investor Services, Inc., New York, New York
(``Notificant''), has given notice 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 its subsidiary Waterhouse Securities, Inc., New
York, New York (``Company''), in the purchase and sale of all types of
securities on the order of customers as riskless principal.
[[Page 31943]]
Notificant proposes to engage in the proposed activities nationwide.
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.'' 12 U.S.C.
1843(c)(8). The Board previously has determined, by order, that the
proposed riskless principal activities are ``so closely related to
banking or managing or controlling banks as to be proper incident
thereto.'' See Order Revising the Limitations Applicable to Riskless
Principal Activities, 82 Fed. Res. Bull. ------ (Order dated June 10,
1996). See also J.P. Morgan & Co. Incorporated, 76 Fed. Res. Bull. 26
(1990); Bankers Trust New York Corporation, 75 Fed. Res. Bull. 829
(1989). Except as discussed below, Notificant has stated that Company
will conduct the proposed activities using the same methods and subject
to the prudential limitations established by the Board in its previous
orders.
In authorizing bank holding companies to engage in riskless
principal activities under section 4(c)(8) of the BHC Act, the Board
has relied on a commitment that the bank holding company not act as a
riskless principal for registered investment company securities or for
any securities of investment companies that are advised by the bank
holding company or any of its affiliates. Notificant has requested that
Company be permitted to act as riskless principal in transactions
involving securities of all registered investment companies, other than
investment companies that are advised by Notificant or any of its
affiliates.
Notificant states that it seeks relief from this restriction in
order to be able to compete effectively with other providers of these
services. Notificant maintains, in particular, that Company would be at
a competitive disadvantage with respect to the execution of customer
orders for the purchase and sale of open-end mutual funds with a sales
load where, in accordance with industry practice, most broker/dealers
execute and confirm such transactions on a principal basis.
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 notice, 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 July 11,
1996. Any request for a hearing on this proposal must, as required by
section 262.3(e) of the Board's Rules of Procedure (12 C.F.R.
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. The
notice 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, June 17, 1996.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 96-15848 Filed 6-20-96; 8:45 am]
BILLING CODE 6210-01-F
