[Federal Register Volume 59, Number 78 (Friday, April 22, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9736]


[[Page Unknown]]

[Federal Register: April 22, 1994]


-----------------------------------------------------------------------


FEDERAL RESERVE SYSTEM
 

Societe Generale, Paris, France; Application to Engage in 
Nonbanking Activities

    Societe Generale, Paris, France (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 Sec.  225.23(a)(3) of the Board's Regulation 
Y (12 CFR 225.23(a)(3)) to engage de novo through FIMAT Futures USA, 
Inc., Chicago, Illinois (Company), a futures commission merchant 
registered under the Commodity Exchange Act (7 U.S.C. 1 et seq.), in 
executing and clearing, clearing without executing, executing without 
clearing, purchasing and selling through the use of omnibus trading 
accounts, and providing investment advisory services with regard to the 
following contracts on the following exchanges: Light Sweet Crude Oil 
Futures, Options on Light Sweet Crude Oil Futures, Sour Crude Oil 
Futures, Gulf Coast Unleaded Gasoline Futures, New York Harbor Unleaded 
Gasoline Futures, Options on New York Harbor Unleaded Gasoline Futures, 
No. 2 Heating Oil Futures, Options on No. 2 Heating Oil Futures, 
Propane Futures, Natural Gas Futures, and Options on Natural Gas 
Futures on the New York Mercantile Exchange; High Sulphur Fuel Oil 
Futures and Gas Oil Futures on the Singapore International Monetary 
Exchange Limited; Corn Futures, Options on Corn Futures, Wheat Futures, 
Options on Wheat Futures, Soybean Futures and Options on Soybean 
Futures on the Chicago Board of Trade; and Live Cattle Futures, Options 
on Live Cattle Futures, Feeder Cattle Futures, Options on Feeder Cattle 
Futures, Live Hog Futures and Options on Live Hog Futures on the 
Chicago Mercantile Exchange. Applicant proposes to conduct these 
activities throughout 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 FR 806.
    The Board previously has approved acting as a futures commission 
merchant in executing and clearing the proposed commodity contracts. 
See Bank of Montreal, 79 Federal Reserve Bulletin 1049 (1993); J.P. 
Morgan & Co. Incorporated, 80 Federal Reserve Bulletin 151 (1994) (J.P. 
Morgan). The Board also previously 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. J.P. Morgan.
    Applicant proposes to conduct the proposed activities in a manner 
that differs slightly from what previously has been approved by the 
Board. Specifically, in J.P. Morgan the Board conditioned approval of 
the application on J.P. Morgan's commitment that it would not perform 
execution, clearance or investment advisory services for commodity 
funds (or commodity pools) owned or sponsored by, or otherwise 
affiliated with, J.P. Morgan. In contrast, Applicant proposes that 
Company's customers would include managed commodity funds (or commodity 
pools) that are formed outside of the United States and owned solely by 
non-U.S. persons, and that are owned or sponsored by, or otherwise 
affiliated with, Applicant.
    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 May 12, 
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 Chicago.

    Board of Governors of the Federal Reserve System, April 18, 1994.
Jennifer J. Johnson,
Associate Secretary of the Board.
[FR Doc. 94-9736 Filed 4-21-94; 8:45 am]
BILLING CODE 6210-01-F