[Federal Register Volume 59, Number 220 (Wednesday, November 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-28249]


[[Page Unknown]]

[Federal Register: November 16, 1994]


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FEDERAL RESERVE SYSTEM

 

Citicorp, New York, NY; Application to Engage in Nonbanking 
Activities

    Citicorp, New York, New York (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 Citicorp Futures Corporation, 
New York, New York (Company), a futures commission merchant (FCM) 
registered under the Commodity Exchange Act (7 U.S.C. Sec.  1 et seq.), 
in executing and clearing, clearing withoutxecuting, executing without 
clearing, purchasing and selling through the use of omnibus trading 
accounts, and providing investment advisory services with regard to 
Sour Crude Oil Futures, Light Sweet Crude Oil Futures, Options on Light 
Sweet Crude Oil Futures, Gulf Coast Unleaded Gasoline Futures, New York 
Harbor Unleaded Gasoline Futures, Options on New York Harbor Unleaded 
Gasoline Futures, Natural Gas Futures, Options on Natural Gas Futures, 
Heating Oil Futures, Options on Heating Oil Futures and Propane Futures 
on the New York Mercantile Exchange; World Sugar No. 11 Futures, 
Options on World Sugar No. 11 Futures, Coffee ``C'' Futures, Options on 
Coffee ``C'' Futures, Cocoa Futures and Options on Cocoa Futures on the 
Coffee, Sugar & Cocoa Exchange, Inc.; Hard Red Winter Wheat Futures and 
Options on Hard Red Winter Wheat Futures on the Kansas City Board of 
Trade; Soybean Futures and Options on Soybean Futures on the MidAmerica 
Commodity Exchange; Corn Futures, Options on Corn Futures, Soybean 
Futures, Options on Soybean Futures, Soybean Oil Futures, Options on 
Soybean Oil Futures, Soybean Meal Futures, Options on Soybean Meal 
Futures, Wheat Futures and Options on Wheat 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 on the Chicago Mercantile 
Exchange; and High Sulphur Fuel Oil Futures on the Singapore 
International Monetary Exchange. Applicant proposes that Company become 
a clearing member of the New York Mercantile Exchange, Kansas City 
Board of Trade, MidAmerica Commodity Exchange and Singapore 
International Monetary Exchange. These activities will be conducted 
world wide.

    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.

    Applicant states that the Board previously has approved providing 
the proposed FCM execution, clearance and advisory services with 
respect to nonfinancial 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). Applicant has 
stated that Company would provide the proposed services in accordance 
with J.P. Morgan, except that Company would provide FCM services to 
commodity pools that are owned or sponsored by, or otherwise affiliated 
with, Applicant.
    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. Sec.  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 enable Applicant to offer its 
customers a broader range of products. 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 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 December 
2, 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, November 9, 
1994.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 94-28249 Filed 11-15-94; 8:45 am]
BILLING CODE 6210-01-F