[Federal Register Volume 61, Number 178 (Thursday, September 12, 1996)]
[Notices]
[Pages 48155-48156]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23324]


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FEDERAL RESERVE SYSTEM

Caisse Nationale de Credit Agricole, S.A. and Banque Indosuez; 
Application to Engage in Nonbanking Activities

    Caisse Nationale de Credit Agricole, S.A., Paris, France (CNCA), 
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)(2) of 
the Board's Regulation Y (12 CFR 225.23(a)(2)) to retain its interest 
in Daniel Breen & Company, L.P., Houston, Texas (DBC), and thereby 
engage indirectly in providing investment advisory services pursuant to 
Sec.  225.25(b)(4) of Regulation Y, and its interest in Indosuez Carr 
Futures, Inc., Chicago, Illinois (ICF), and thereby engage indirectly 
in acting as a futures commission merchant (FCM) and providing related 
investment advisory services for financial futures contracts and 
options on futures contracts pursuant to Sec.  225.25(b)(18) and (19) 
of Regulation Y. CNCA and Banque Indosuez, Paris, France (BI) 
(together, Notificants) also have given notice pursuant to section 
4(c)(8) of the BHC Act and Sec.  225.23(a)(2) of Regulation Y to 
acquire 100 percent of the voting shares of Breen Trust Company, 
Houston, Texas (BTC) and thereby engage indirectly in providing trust 
services pursuant to Sec.  225.25(b)(3) of Regulation Y, and pursuant 
to section 4(c)(8) and Sec.  225.23(a)(3) of Regulation Y to engage 
indirectly through ICF in acting as a FCM and providing related 
investment advisory services for non-financial futures contracts and 
options on non-financial futures contracts.
    Notificants propose to conduct the activities of DBC and BTC on a 
nationwide basis and the activities of ICF 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 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 generally have provided 
the proposed service, that banks generally provide services that are 
operationally or functionally similar to the proposed service so as to 
equip them particularly well to provide the proposed service, or that 
banks generally provide services that are so integrally related to the 
proposed service 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).
    Notificants maintain that the Board previously has determined by 
regulation that several of the proposed activities, when conducted 
within limitations established by the Board, are closely related to 
banking for purposes of section 4(c)(8) of the BHC Act. See 12 CFR 
225.25(b)(3) (performing certain functions or activities of a trust 
company); 12 CFR 225.25(b)(4) (providing investment and financial 
advice); 12 CFR 225.25(b)(18) (providing FCM services on a discount and 
full-service basis); and 12 CFR 225.25(b)(19) (providing investment 
advice on financial futures contracts and options on financial futures 
contracts). See also The Bessemer Group, Incorporated, 82 Fed. Res. 
Bull. 569 (1996); Meridian Bancorp, Inc., 80 Fed. Res. Bull. 736 (1994) 
(serving as general partner of and investing in an unregistered limited 
partnership).

[[Page 48156]]

    Notificants assert that the Board has determined by order that the 
remaining proposed activity of ICF (acting as a FCM and providing 
related investment advisory services for non-financial futures 
contracts and options on financial futures contracts), when conducted 
within limitations established by the Board in previous orders, also is 
closely related to banking. See J.P. Morgan & Company Incorporated, 80 
Fed. Res. Bull. 151 (1994); Bank of Montreal, 79 Fed. Res. Bull. 1049 
(1993). Notificants have stated that they would engage in these 
activities in accordance with the limitations and conditions 
established by the Board in prior cases.
    In order to approve the proposal, the Board must determine that the 
proposed activities ``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). Notificants state that the proposal will produce public 
benefits that outweigh any potential adverse effects. In particular, 
Notificants maintain that the proposal will enhance competition and 
enable it to offer its customers a broader range of services. In 
addition, Notificants state 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 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, D.C. 20551, not later than September 19, 
1996. 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 notice may be inspected at the offices of the Board of 
Governors or the Federal Reserve Bank of Chicago.

    Board of Governors of the Federal Reserve System, September 6, 
1996.
Jennifer J. Johnson,
Deputy Secretary of the Board.
[FR Doc. 96-23324 Filed 9-11-96; 8:45 am]
BILLING CODE 6210-01-F