[Federal Register Volume 60, Number 151 (Monday, August 7, 1995)]
[Notices]
[Pages 40181-40182]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19371]
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FEDERAL RESERVE SYSTEM
Swiss Bank Corporation; Notice to Engage in Certain Nonbanking
Activities
Swiss Bank Corporation, Basel, Switzerland (Applicant), has given
notice 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 retain control of all the voting shares of certain
United States subsidiaries (United States Subsidiaries) of S.G. Warburg
Overseas Ltd., London, England, and the assets and liabilities of the
branch of S.G. Warburg Forex Ltd., London, England, that is located in
New York, New York (New York Forex), and thereby engage in the
following nonbanking activities:
(1) Providing various types of investment and financial advice,
pursuant to Sec. 225.25(b)(4) of the Board's Regulation Y;
(2) Providing discount and full-service brokerage services, and
activities incidental thereto, pursuant to Sec. 225.25(b)(15) of the
Board's Regulation Y;
(3) Dealing in obligations of the United States, general
obligations of states and their political subdivisions, and other
obligations that state member banks of the Federal Reserve System may
be authorized to underwrite and deal in under 12 U.S.C. 24 and 335,
pursuant to Sec. 225.25(b)(16) of the Board's Regulation Y;
(4) Acting as agent in the private placement of all types of
securities, and providing related advisory services;
(5) Underwriting and dealing in, to a limited extent, all types of
debt and equity securities (other than securities issued by open-end
investment companies);
(6) Trading for its own account in the option contracts as listed
below:
American Stock Exchange
(i) Major Market Index options
Chicago Board Options Exchange
(ii) Standard & Poor's 100 Stock Index options
(iii) Standard & Poor's 500 Stock Index options
(vi) Long-Term Interest Rate options
(7) Trading for its own account in the futures and options on
futures contracts listed as listed below:
Chicago Board of Trade
(i) Options on The Bond Buyer Municipal Bond Index futures
Chicago Mercantile Exchange
(ii) Standard & Poor's 100 Stock Price Index futures
(ii) Standard & Poor's 500 Stock Price Index futures
(iii) Options on Standard & Poor's 500 Stock Price Index futures
(vi) Eurodollar futures
Marche a Terme International de France (Paris)
(v) Cotation Assiste en Contenue (CAC) 40 Stock Index futures
(8) Trading for its own account in foreign exchange spot, forward,
and futures transactions.
On June 26, 1995, Applicant received temporary authority to acquire
the United States Subsidiaries and New York Forex pursuant to section
4(c)(9) of the BHC Act (12 U.S.C. 1843(c)(9)). This authority was
granted in reliance upon certain commitments and conditions, including
Applicant's commitment to file this notice.
The United States Subsidiaries include S.G. Warburg & Co., Inc.,
New York, New York (SGWC), S.G. Warburg Options Inc., Chicago, Illinois
(SGWO), and S.G. Warburg OTC USA, Inc., Chicago, Illinois (SGWOTC).
Applicant intends to merge SGWC with and into
[[Page 40182]]
SBC Capital Markets Inc., New York, New York (CMI), a subsidiary of
Applicant that engages in a wide range of securities- and derivatives-
related activities, including underwriting and dealing in all types of
debt and equity securities on a limited basis. See Swiss Bank
Corporation, 81 Federal Reserve Bulletin 185 (1995) (Swiss Bank Order).
SGWO and SGWOTC will either be merged with and into CMI at the same
time or liquidated promptly thereafter.
Applicant seeks approval to conduct the proposed activities
throughout the United States, and plans to conduct the activities on a
world-wide basis.
Closely Related to Banking Standard
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.''
Applicant states that the Board previously has determined by
regulation or order that all of the activities conducted by the United
States Subsidiaries or New York Forex, when conducted within the
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, and, where applicable, are
consistent with section 20 of the Glass-Steagall Act (12 U.S.C. 377).
See 12 CFR 225.25(b)(4), (b)(15), and (b)(16); Swiss Bank Order. See
also J.P. Morgan & Co. Incorporated, 75 Federal Reserve Bulletin 192
(1989), aff'd sub nom. Securities Industries Ass'n v. 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), Canadian Imperial Bank of Commerce, 76
Federal Reserve Bulletin 158 (1990), 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) (Section 20 Orders).
Applicant maintains that these activities will be conducted in
conformity with the conditions and limitations established by the Board
in prior cases.
Proper Incident to Banking Standard
In order to approve the proposal, the Board must determine that the
proposal ``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 CMI's ability to compete with
other financial institutions engaged in the investment banking business
at the international level, by providing it with access to the customer
base of the United States Subsidiaries and New York Forex, thereby
enhancing its ability to compete in customer-oriented businesses such
as underwriting and private placements in the United States. Applicant
also asserts that the proposal will enable CMI to offer a broader range
of products and services to its customers, and will make CMI a more
effective competitor in the United States capital and securities
markets. 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 interests, 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 notice, and does not represent a
determination by the Board that the proposal meets or is likely to meet
the standards of the BHC Act or other applicable laws.
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 August
22, 1995. Any request for a hearing on this notice 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 1,
1995.
William W. Wiles,
Secretary of the Board.
[FR Doc. 95-19371 Filed 8-4-95; 8:45 am]
BILLING CODE 6210-01-F