[Federal Register Volume 64, Number 179 (Thursday, September 16, 1999)]
[Notices]
[Pages 50286-50287]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24118]
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FEDERAL RESERVE SYSTEM
Notice of Proposals to Engage in Permissible Nonbanking
Activities or to Acquire Companies that are Engaged in Permissible
Nonbanking Activities
The companies listed in this notice have given notice under section
4 of the Bank Holding Company Act (12 U.S.C. 1843) (BHC Act) and
Regulation Y, (12 CFR Part 225) to engage de novo, or to acquire or
control voting securities or assets of a company, including the
companies listed below, that engages either directly or through a
subsidiary or other company, in a nonbanking activity that is listed in
Sec. 225.28 of Regulation Y (12 CFR 225.28) or that the Board has
determined by Order to be closely related to banking and permissible
for bank holding companies. Unless otherwise noted, these activities
will be conducted throughout the world.
Each notice is available for inspection at the Federal Reserve Bank
indicated. The notice also will be available for inspection at the
offices of the Board of Governors. Interested persons may express their
views in writing on the question whether the proposal complies with the
standards of section 4 of the BHC Act.
Unless otherwise noted, comments regarding the applications must be
received at the Reserve Bank indicated or the offices of the Board of
Governors not later than September 30, 1999.
A. Federal Reserve Bank of New York (Betsy Buttrill White, Senior
Vice President) 33 Liberty Street, New York, New York 10045-0001:
1. Canadian Imperial Bank of Commerce, Toronto, Canada; to make an
investment in Identrus, LLC, New York, New York (formerly known as
Global Trust Organization LLC), and engage de novo directly and through
Identrus LLC, in digital certification and data
[[Page 50287]]
processing and data transmission activities, as described below.
Notificant also proposes to engage in activities that it maintains are
incidental to permissible digital certification and data processing and
data transmission activities.
Other investors in Company would include national banks and state
member banks. Company would serve as the rulemaking authority for a
network of participating financial institutions (Network), which would
include Notificant, future equity investors in Company, and other
financial institutions that elect to participate in the Network
(collectively, Participants). The Network is designed to allow
Participants to certify electronically the identity of parties
conducting business or communicating electronically through the
internet or otherwise. Participants in the Network would, among other
things, issue to customers ``digital certificates'' that authenticate
messages electronically sent by the customer, and confirm the validity
of digital certificates issued by Participants. Participants also may
issue warranties to customers who request verification of digital
certificates issued by Participants, and post collateral to secure
claims under any warranty issued by the Participant.
Company would develop, maintain, and enforce the rules governing
the operation of, and participation in, the Network, and provide other
services designed to facilitate the certification activities of
Participants and operation of the Network. These activities would
include issuing digital certificates to Participants and maintaining a
current database of digital certificates that have been issued. Company
and Participants would engage in a wide range of data processing and
data transmission activities in connection with their proposed
activities. A more complete description of the proposed activities of
Company, Notificant, and other Participants is contained in the
notices.
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 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.
The Board previously has determined that certain data processing and
data transmission services are closely related to banking for purposes
of section 4(c)(8) of the BHC Act, pursuant to section 225.25(b)(14) of
Regulation Y. Notificant contends that all of the proposed activities
are so closely related to banking as to be a proper incident thereto,
or are activities that are incidental to permissible activities,
pursuant to section 225.25(a)(2) of Regulation Y.
In determining whether the proposal satisfies the proper incident
to banking standard of section 4(c)(8) of the BHC Act, the Board must
consider whether consummation of the proposal 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). Notificant contends
that consummation of the proposal will facilitate the development of
electronic commerce and will have a beneficial effect on competition
for identity certification and related services.
In publishing the proposal for comment, the Board does not take a
position on the 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 proposal and does not represent a determination
by the Board that the proposal meets, or is likely to meet, the
standards of the BHC Act. The notice is available for immediate
inspection at the Federal Reserve Bank indicated above and at the
offices of the Board of Governors. Any request for a hearing on the
notices must be accompanied by a statement of reasons explaining 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.
Board of Governors of the Federal Reserve System, September 10,
1999.
Robert deV. Frierson,
Associate Secretary of the Board.
[FR Doc. 99-24118 Filed 9-15-99; 8:45 am]
BILLING CODE 6210-01-F
