[Federal Register Volume 60, Number 232 (Monday, December 4, 1995)]
[Notices]
[Pages 62092-62093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29393]



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FEDERAL RESERVE SYSTEM

Compagnie Financiere de Paribas; Application to Engage in 
Nonbanking Activities

    Compagnie Financire de Paribas, Paris, France (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 225.23(a)(3) of the Board's 
Regulation Y (12 CFR 225.23(a)(3)) to engage de novo through its 
indirect subsidiary, Sema Group, London, England (Company),\1\ in 
providing software to mobile telephone network operators (client 
networks). The software would enroll new subscribers; identify 
subscribers and control access by subscribers to client networks; 
generate subscriber billing statements for and monitor subscriber 
payments to client networks; calculate and reconcile fund transfers 
between client networks; and monitor subscriber 

[[Page 62093]]
usage patterns. Company currently provides these services to client 
networks outside the United States. Applicant proposes that Company 
would expand its operations to offer these services to client networks 
on a nationwide basis inside the United States.

    \1\ Applicant owns 50.1 percent of Financiere Sema, and France 
Telecom owns the remaining 49.9 percent. Financiere Sema in turns 
owns approximately 40 percent of the voting shares of Company.
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    Section 4(c)(8) of the BHC Act provides that a bank holding company 
may engage in any activity that 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 services, that banks generally provide services that are 
operationally or functionally similar to the proposed services so as to 
equip them particularly well to provide the proposed services, or that 
banks generally provide services that are so integrally related to the 
proposed services 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 (January 5, 1984); 
Securities Industry Ass'n v. Board of Governors, 468 U.S. 207, 210-11, 
n.5 (1984).
    Applicant states that the Board previously has determined by 
regulation that providing certain data processing and data transmission 
services and facilities (including software) and providing access to 
such services and facilities by any technological means are closely 
related to banking for purposes of section 4(c)(8) of the BHC Act. In 
order to be found to be closely related to banking, the data to be 
handled must be ``financial, banking, or economic'' in nature, and such 
activities must be conducted within certain additional limitations 
established by the Board. See 12 CFR 225.25(b)(7). Applicant maintains 
that Company's proposed activities would relate primarily to financial, 
banking, or economic data, and would otherwise conform to Regulation Y.
    Applicant also contends that, to the extent the proposed activities 
involve processing nonfinancial data, a bank holding company may engage 
in these activities as part of its offering of a larger package of data 
processing services, when processing nonfinancial data is an 
``essential component'' of such package. See Banc One Corporation, 80 
Fed. Res. Bull. 139 (1994). Applicant represents that Company's 
proposed activities with respect to nonfinancial data satisfy these 
criteria.
    In order to approve the proposal, the Board also must determine 
that the proposed activities to be engaged in by Company are a proper 
incident to banking that ``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 contends that its proposal would produce 
public benefits that outweigh any potential 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 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.
    Any comments or requests for hearing should be submitted in writing 
to William W. Wiles, Secretary, Board of Governors of the Federal 
Reserve System, Washington DC 20551, not later than December 18, 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 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 28, 
1995.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 95-29393 Filed 12-1-95; 8:45 am]
BILLING CODE 6210-01-F