[Federal Register Volume 59, Number 163 (Wednesday, August 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20761]
[[Page Unknown]]
[Federal Register: August 24, 1994]
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FEDERAL RESERVE SYSTEM
Compagnie de Suez and Banque Indosuez, Paris, France; Application
to Engage in Nonbanking Activities
Compagnie de Suez and Banque Indosuez, Paris, France
(Applicants), have 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 a wholly owned subsidiary, Indosuez Carr 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, clearing without executing, executing
without clearing, purchasing and selling through the use of omnibus
accounts, and providing investment advisory services with regard to the
following contracts on the following exchanges: No. 2 Heating Oil
Futures, Options on No. 2 Heating Oil Futures, Light Sweet Crude Oil
Futures, Options on Light Sweet Crude Oil Futures, New York Harbor
Unleaded Gasoline Futures, Options on New York Harbor Unleaded Gasoline
Futures, Propane Futures, Natural Gas Futures, Options on Natural Gas
Futures, Palladium Futures, Platinum Futures, and Options on Platinum
Futures on the New York Mercantile Exchange; Corn Futures, Options on
Corn Futures, Wheat Futures, Options on Wheat Futures, Soybean Futures,
Options on Soybean Futures, Soybean Meal Futures, Options on Soybean
Meal Futures, Soybean Oil Futures, Options on Soybean Oil Futures, Oat
Futures, and Options on Oat Futures, on the Chicago Board of Trade;
Live Cattle Futures, Options on Live Cattle Futures, Feeder Cattle
Futures, Options on Feeder Cattle Futures, Live Hog Futures, Options on
Live Hog Futures, Frozen Pork Bellies Futures, and Options on Frozen
Pork Bellies Futures, on the Chicago Mercantile Exchange; Copper
Futures and Options on Copper Futures on the Commodity Exchange, Inc.;
Hard Red Winter Wheat Futures and Options on Hard Red Winter Wheat
Futures on the Kansas City Board of Trade; White Sugar Futures on the
Marche a Terme International de France; Corn Futures, Options on Corn
Futures, Live Cattle Futures, Live Hog Futures, Oat Futures, Platinum
Futures, Rough Rice Futures, Options on Rough Rice Futures, Soybean
Futures, Options on Soybean Futures, Soybean Meal Futures, Wheat
Futures, and Options on Wheat Futures on the MidAmerica Commodity
Exchange (Chicago Board of Trade); Cocoa Futures, Options on Cocoa
Futures, Coffee ``C'' Futures, Options on Coffee ``C'' Futures,
Domestic Sugar No. 14 Futures, World Sugar No. 11 Futures, and Options
on World Sugar No. 11 Futures on the Coffee Sugar & Cocoa Exchange,
Inc. (New York); Hard Red Spring Wheat Futures, Options on Hard Red
Spring Wheat Futures (American Exercise), and Options on Hard Red
Spring Wheat Futures (European Exercise), on the Minneapolis Grain
Exchange; Cotton Futures, Options on Cotton Futures, Frozen
Concentrated Orange Juice Futures, and Options on Frozen Concentrated
Orange Juice Futures on the New York Cotton Exchange; High Sulphur Fuel
Oil Futures and Gas Oil Futures on the Singapore International Monetary
Exchange Limited. Applicants propose to conduct these activities
throughout the United States and 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 Federal Register 806 (1984).
Applicants believe that the proposed activities are closely related
to banking or managing or controlling banks. Except as noted below, the
Board previously has approved acting as a futures commission merchant
for the proposed commodity contracts. See Bank of Montreal, 79 Federal
Reserve Bulletin 1049 (1993); J.P. Morgan & Company Incorporated, 80
Federal Reserve Bulletin 151 (1994) (Morgan). The Board also 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. See
Morgan; Caisse Nationale de Credit Agricole S.A., 80 Federal Reserve
Bulletin 552 (1994); Societe Generale, 80 Federal Reserve Bulletin 649
(1994).
The Board has approved the following contracts for omnibus trading
only, and Applicants propose to engage in FCM activities in these
contracts only through omnibus accounts: Cocoa Futures, Options on
Cocoa Futures, Coffee ``C'' Futures, Options on Coffee ``C'' Futures,
Domestic Sugar No. 14 Futures, World Sugar No. 11 Futures, and Options
on World Sugar No. 11 Futures on the Coffee and Sugar & Cocoa Exchange,
Inc. (New York); Hard Red Spring Wheat Futures, Options on Hard Red
Spring Wheat Futures (American Exercise), and Options on Hard Red
Spring Wheat Futures (European Exercise), on the Minneapolis Grain
Exchange; and Cotton Futures, Options on Cotton Futures, Frozen
Concentrated Orange Juice Futures, and Options on Frozen Concentrated
Orange Juice Futures on the New York Cotton Exchange.
Applicants propose to conduct the proposed activities in a manner
consistent with the Societe Generale order in that Company's customers
would include managed commodity funds (or commodity pools) that are
formed outside of the United States and are owned solely by non-U.S.
persons, and that are owned or sponsored by or otherwise affiliated
with Applicant.
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 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 interest, or unsound banking practices.
Applicants believe that the proposed activities will benefit the public
by promoting competition. Applicants also believe that approval of this
application will allow Company to provide a wider range of services and
added convenience to its customers. Applicants believe 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
September 16, 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 New York.
Board of Governors of the Federal Reserve System, August 18,
1994.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 94-20761 Filed 8-23-94; 8:45 am]
BILLING CODE 6210-01-F
