[Federal Register Volume 61, Number 178 (Thursday, September 12, 1996)]
[Notices]
[Pages 48155-48156]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23324]
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FEDERAL RESERVE SYSTEM
Caisse Nationale de Credit Agricole, S.A. and Banque Indosuez;
Application to Engage in Nonbanking Activities
Caisse Nationale de Credit Agricole, S.A., Paris, France (CNCA),
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)(2) of
the Board's Regulation Y (12 CFR 225.23(a)(2)) to retain its interest
in Daniel Breen & Company, L.P., Houston, Texas (DBC), and thereby
engage indirectly in providing investment advisory services pursuant to
Sec. 225.25(b)(4) of Regulation Y, and its interest in Indosuez Carr
Futures, Inc., Chicago, Illinois (ICF), and thereby engage indirectly
in acting as a futures commission merchant (FCM) and providing related
investment advisory services for financial futures contracts and
options on futures contracts pursuant to Sec. 225.25(b)(18) and (19)
of Regulation Y. CNCA and Banque Indosuez, Paris, France (BI)
(together, Notificants) also have given notice pursuant to section
4(c)(8) of the BHC Act and Sec. 225.23(a)(2) of Regulation Y to
acquire 100 percent of the voting shares of Breen Trust Company,
Houston, Texas (BTC) and thereby engage indirectly in providing trust
services pursuant to Sec. 225.25(b)(3) of Regulation Y, and pursuant
to section 4(c)(8) and Sec. 225.23(a)(3) of Regulation Y to engage
indirectly through ICF in acting as a FCM and providing related
investment advisory services for non-financial futures contracts and
options on non-financial futures contracts.
Notificants propose to conduct the activities of DBC and BTC on a
nationwide basis and the activities of ICF on a worldwide basis.
Section 4(c)(8) of the BHC Act provides that a bank holding company
may, with Board approval, engage in any activity that 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 generally have provided
the proposed service, that banks generally provide services that are
operationally or functionally similar to the proposed service so as to
equip them particularly well to provide the proposed service, or that
banks generally provide services that are so integrally related to the
proposed service 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 (1984).
Notificants maintain that the Board previously has determined by
regulation that several of the proposed activities, when conducted
within limitations established by the Board, are closely related to
banking for purposes of section 4(c)(8) of the BHC Act. See 12 CFR
225.25(b)(3) (performing certain functions or activities of a trust
company); 12 CFR 225.25(b)(4) (providing investment and financial
advice); 12 CFR 225.25(b)(18) (providing FCM services on a discount and
full-service basis); and 12 CFR 225.25(b)(19) (providing investment
advice on financial futures contracts and options on financial futures
contracts). See also The Bessemer Group, Incorporated, 82 Fed. Res.
Bull. 569 (1996); Meridian Bancorp, Inc., 80 Fed. Res. Bull. 736 (1994)
(serving as general partner of and investing in an unregistered limited
partnership).
[[Page 48156]]
Notificants assert that the Board has determined by order that the
remaining proposed activity of ICF (acting as a FCM and providing
related investment advisory services for non-financial futures
contracts and options on financial futures contracts), when conducted
within limitations established by the Board in previous orders, also is
closely related to banking. See J.P. Morgan & Company Incorporated, 80
Fed. Res. Bull. 151 (1994); Bank of Montreal, 79 Fed. Res. Bull. 1049
(1993). Notificants have stated that they would engage in these
activities in accordance with the limitations and conditions
established by the Board in prior cases.
In order to approve the proposal, the Board must determine that the
proposed activities ``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 interests, or unsound banking practices.'' 12 U.S.C.
1843(c)(8). Notificants state that the proposal will produce public
benefits that outweigh any potential adverse effects. In particular,
Notificants maintain that the proposal will enhance competition and
enable it to offer its customers a broader range of services. In
addition, Notificants state that the proposed activities will not
result in adverse effects such as an undue concentration of resources,
decreased or unfair competition, conflicts of interests, or unsound
banking practices.
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 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
to William W. Wiles, Secretary, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551, not later than September 19,
1996. Any request for a hearing on this notice 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 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 notice 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, September 6,
1996.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 96-23324 Filed 9-11-96; 8:45 am]
BILLING CODE 6210-01-F
