[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] ----------------------------------------------------------------------- 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