[Federal Register Volume 59, Number 197 (Thursday, October 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25273]
[[Page Unknown]]
[Federal Register: October 13, 1994]
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FEDERAL RESERVE SYSTEM
Banque Nationale de Paris, Paris, France; Application to Engage
in Nonbanking Activities
Banque Nationale de Paris, Paris, France (BNP), 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)), through a newly-formed wholly-owned
subsidiary, BNP/Cooper Neff, Inc., Radnor, Pennsylvania (Company), to
acquire certain assets and liabilities of Mitsui T&B Options, Inc., New
York, New York, Cooper Neff & Associates, L.P., Radnor, Pennsylvania,
and Cooper Neff Technologies, L.P., Radnor, Pennsylvania, and to engage
in the following activities: 1) providing full-service securities
brokerage services; 2) providing investment advisory services; 3)
proprietary trading in futures and exchange-traded and over-the-counter
options on foreign exchange for hedging and nonhedging purposes; 4)
acting as a registered options trader on the Philadelphia Stock
Exchange with respect to options on the Australian dollar, British
pound, Canadian dollar, Deutsche mark, European Currency Unit, French
franc, Japanese yen, and Swiss franc; 5) acting as a specialist on the
Philadelphia Stock Exchange with respect to the Australian dollar,
European Currency Unit, and French franc; 6) selling computer software
consisting of pricing and risk management models, and providing related
support services; and 7) providing futures commission merchant (FCM)
and commodity trading advisor services, including executing, buying and
selling through omnibus accounts, and offering investment advisory
services (including discretionary portfolio management), with respect
to futures and options on futures on bullion, government securities,
certificates of deposit, other money market instruments that a bank may
buy and sell for its own account, bonds, interest rates, and financial
indexes on exchanges previously approved by the Board. Company would
not provide FCM services with respect to foreign currency contracts.
BNP also has applied pursuant to section 4(c)(8) of the BHC Act, to
acquire Mitsui T&B Futures, Inc., Chicago, Illinois (to be renamed BNP
Futures, Inc.), and to provide FCM clearing-only services with respect
to those contracts for which Company would provide execution and
advisory services. BNP would engage in these activities on a worldwide
basis.
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 generally have 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 (1984).
BNP states that the Board previously has determined by Regulation
that certain of the proposed activities, when conducted within
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)(15) (full-
service securities brokerage); 12 CFR (b)(4) (investment advisory
services); 12 CFR 225.25(b)(7), Citicorp, 72 Federal Reserve Bulletin
497 (1986), and Citicorp, 68 Federal Reserve Bulletin 505 (1982) (data
processing services).
BNP also maintains that the Board has determined by order that
several of the other proposed activities, when conducted within the
limitations established by the Board in previous orders, are closely
related to banking. See Sakura Bank, Limited, 79 Federal Reserve
Bulletin 723 (1993) (providing execution-only, clearing-only, and
investment advisory services, and buying and selling contracts through
omnibus accounts, with respect to financial futures and options on
futures); Hongkong and Shanghai Banking Corporation, 75 Federal Reserve
Bulletin 217 (1989), and Nippon Credit Bank, Ltd., 75 Federal Reserve
Bulletin 308 (1989) (proprietary trading of futures and options on
foreign exchange for nonhedging and hedging purposes); Swiss Bank, 77
Federal Reserve Bulletin 126 (1991), and Societe Generale, 76 Federal
Reserve Bulletin 776 (1990) (acting as a specialist and registered
options trader on the Philadelphia Stock Exchange). BNP maintains that
Company and BNP Futures, Inc. would conduct these previously approved
activities in conformance 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 and BNP Futures, Inc. ``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. Sec. 1843(c)(8). BNP believes that the proposal
will produce public benefits that outweigh any potential adverse
effects. In particular, BNP maintains that the proposal will enhance
competition and enable BNP to offer its customers a broader range of
products. In addition, BNP 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 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 November
7, 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, October 5,
1994.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 94-25273 Filed 10-12-94; 8:45 am]
BILLING CODE 6210-01-F