[Federal Register Volume 61, Number 121 (Friday, June 21, 1996)]
[Notices]
[Pages 31942-31943]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15848]



-----------------------------------------------------------------------


FEDERAL RESERVE SYSTEM

Notice to Engage in Nonbanking Activities

    Waterhouse Investor Services, Inc., New York, New York 
(``Notificant''), 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(a)(3) of the Board's Regulation Y (12 CFR 225.23(a)(3)), to 
engage de novo through its subsidiary Waterhouse Securities, Inc., New 
York, New York (``Company''), in the purchase and sale of all types of 
securities on the order of customers as riskless principal.

[[Page 31943]]

Notificant proposes to engage in the proposed activities nationwide.
    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). The Board previously has determined, by order, that the 
proposed riskless principal activities are ``so closely related to 
banking or managing or controlling banks as to be proper incident 
thereto.'' See Order Revising the Limitations Applicable to Riskless 
Principal Activities, 82 Fed. Res. Bull. ------ (Order dated June 10, 
1996). See also J.P. Morgan & Co. Incorporated, 76 Fed. Res. Bull. 26 
(1990); Bankers Trust New York Corporation, 75 Fed. Res. Bull. 829 
(1989). Except as discussed below, Notificant has stated that Company 
will conduct the proposed activities using the same methods and subject 
to the prudential limitations established by the Board in its previous 
orders.
    In authorizing bank holding companies to engage in riskless 
principal activities under section 4(c)(8) of the BHC Act, the Board 
has relied on a commitment that the bank holding company not act as a 
riskless principal for registered investment company securities or for 
any securities of investment companies that are advised by the bank 
holding company or any of its affiliates. Notificant has requested that 
Company be permitted to act as riskless principal in transactions 
involving securities of all registered investment companies, other than 
investment companies that are advised by Notificant or any of its 
affiliates.
    Notificant states that it seeks relief from this restriction in 
order to be able to compete effectively with other providers of these 
services. Notificant maintains, in particular, that Company would be at 
a competitive disadvantage with respect to the execution of customer 
orders for the purchase and sale of open-end mutual funds with a sales 
load where, in accordance with industry practice, most broker/dealers 
execute and confirm such transactions on a principal basis.
    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.
    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 July 11, 
1996. Any request for a hearing on this proposal must, as required by 
section 262.3(e) of the Board's Rules of Procedure (12 C.F.R. 
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. The 
notice 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, June 17, 1996.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 96-15848 Filed 6-20-96; 8:45 am]
BILLING CODE 6210-01-F