[Federal Register Volume 59, Number 174 (Friday, September 9, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-22541] [[Page Unknown]] [Federal Register: September 9, 1994] ======================================================================= ----------------------------------------------------------------------- FEDERAL RESERVE SYSTEM The Sakura Bank, Limited; Application To Engage in Nonbanking Activities The Sakura Bank, Limited, Tokyo, Japan (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 of the Board's Regulation Y (12 CFR 225.23), to engage de novo through its wholly owned subsidiary, Sakura Securities (USA) Inc., New York, New York (Company), in the following nonbanking activities: (1) Acting as agent in the private placement of all types of securities, and providing related advisory services; and (2) Purchasing and selling all types of securities on the order of customers as a riskless principal. Applicant seeks approval to conduct the proposed activities throughout the United States and abroad. 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. 12 U.S.C. 1843(c)(8). In determining whether a proposed activity is closely related to banking for purposes of the BHC Act, the Board considers, inter alia, the criteria set forth in National Courier Association versus 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 order that each of the proposed activities, when conducted within the limitations established by the Board in its previous orders, are closely related to banking, and, where applicable, consistent with section 20 of the Glass-Steagall Act (12 U.S.C. 377). See, e.g., J.P. Morgan & Co. Incorporated, et al., 75 Federal Reserve Bulletin 192 (1989), aff'd sub nom. Securities Industries Ass'n versus 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); and Bankers Trust New York Corporation, 75 Federal Reserve Bulletin 829 (1989) (private placement and riskless principal activities). Applicant maintains that Company will conduct the foregoing, previously approved activities in conformity with the conditions and limitations established by the Board in prior cases. 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 efficiency. 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, on or before September 19, 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 San Francisco. Board of Governors of the Federal Reserve System, September 7, 1994. Jennifer J. Johnson, Deputy Secretary of the Board. [FR Doc. 94-22541 Filed 9-8-94; 8:45 am] BILLING CODE 6210-01-P