[Federal Register Volume 59, Number 48 (Friday, March 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-5693]


[[Page Unknown]]

[Federal Register: March 11, 1994]


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FEDERAL RESERVE SYSTEM
 

The Toronto-Dominion Bank; Application to Engage in Certain 
Nonbanking Activities

    The Toronto-Dominion Bank, Toronto, Canada (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 section 225.23 of the Board's Regulation Y 
(12 CFR 225.23), to engage de novo through its indirect wholly owned 
subsidiary, Toronto-Dominion Securities (USA) Inc., New York, New York 
(Company), in the following nonbanking activities:
    1. Underwriting and dealing in, to a limited extent, all types of 
debt and equity securities, including sovereign debt securities, 
corporate debt securities, debt securities convertible into equity 
securities, debt securities issued by a trust or other vehicle secured 
by or representing interests in debt obligations, preferred stock, 
common stock, American Depositary Receipts, and other direct and 
indirect ownership interests in corporations and other entities;
    2. Purchasing and selling all types of securities as a ``riskless 
principal'' on the order of customers; and
    3. Making, acquiring, and servicing loans or other extensions of 
credit (including issuing letters of credit and accepting drafts) for 
Company's account or for the account of others, pursuant to section 
225.25(b)(1) of Regulation Y.
    Applicant seeks approval for Company to conduct the proposed 
activities throughout the United States.

Closely Related to Banking Standard

    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.'' In determining 
whether a proposed activity is closely related to banking for purposes 
of the BHC Act, the Board considers, inter alia, the matters set forth 
in National Courier Association v. Board of Governors of the Federal 
Reserve System, 516 F.2d 1229 (D.C. Cir. 1975). These considerations 
are:
    (1) Whether banks generally have in fact provided the proposed 
services;
    (2) Whether banks generally provide services that are operationally 
or functionally so similar to the proposed services as to equip them 
particularly well to provide the proposed services; and
    (3) Whether banks generally provide services that are so integrally 
related to the proposed services as to require their provision in a 
specialized form. See 516 F.2d at 1237. 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).
    Applicant states that the Board previously has determined by 
regulation that the proposed lending 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)(1).
    Applicant also maintains that the Board previously has determined 
by order that the other proposed activities, when conducted within the 
limitations established by the Board in its previous orders, are 
closely related to banking, and consistent with section 20 of the 
Glass-Steagall Act (12 U.S.C. 377). See Canadian Imperial Bank of 
Commerce, et al., 76 Federal Reserve Bulletin 158 (1990); J.P. Morgan & 
Co. Incorporated, et al., 75 Federal Reserve Bulletin 192 (1989), aff'd 
sub nom. Securities Industries Ass'n v. Board of Governors of the 
Federal Reserve System, 900 F.2d 360 (D.C. Cir. 1990); Order Approving 
Modifications to the Section 20 Orders, 75 Federal Reserve Bulletin 751 
(1989); Order Approving Modifications to the Section 20 Orders, 79 
Federal Reserve Bulletin 226 (1993); and Supplement to Order Approving 
Modifications to Section 20 Orders, 79 Federal Reserve Bulletin 360 
(1993) (underwriting and dealing activities). See also Dauphin Deposit 
Corporation, 77 Federal Reserve Bulletin 672 (1991); Bankers Trust New 
York Corporation, 75 Federal Reserve Bulletin 829 (1989) (riskless 
principal activities).
    Applicant maintains that Company will conduct the proposed 
activities in conformity with the conditions and limitations 
established by the Board in prior cases.

Proper Incident to Banking Standard

    In order to approve the proposal, the Board must determine that the 
proposed activities to be conducted 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 interests, or 
unsound banking practices.'' 12 U.S.C. 1843(c)(8).
    Applicant believes that the proposal will produce public benefits 
that outweigh any potential adverse effects. In particular, Applicant 
maintains that the proposal will enhance competition and provide 
greater convenience to Company's customers. In addition, Applicant 
states that the proposed activities will not result in adverse effects 
such as an undue concentration of resources, decreased or unfair 
competition, conflicts of interest, 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 in order 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 April 9, 
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, March 4, 1994.
Jennifer J. Johnson,
Associate Secretary of the Board.
[FR Doc. 94-5693 Filed 3-10-94; 8:45 am]
BILLING CODE 6210-01-F