[Federal Register Volume 64, Number 155 (Thursday, August 12, 1999)]
[Notices]
[Pages 44017-44018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20818]


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FEDERAL RESERVE SYSTEM


Notice of Proposals to Engage in Nonbanking Activities or to 
Acquire Companies that are Engaged in Nonbanking Activities

    Bank of Nova Scotia, Toronto, Canada (Notificant) has applied for 
Board approval pursuant to section 4(c)(8) of the Bank Holding Company 
Act (12 U.S.C. 1843(c)(8)) (BHC Act) and section 225.24 of the Board's 
Regulation Y (12 C.F.R. 225.24), to engage as principal in forward 
contracts, swap transactions, and similar derivative contracts based on 
the equity and debt securities of a single issuer through its wholly-
owned subsidiary, Scotiabanc Inc., Atlanta, Georgia. This activity will 
be conducted worldwide.
    The Board has previously authorized bank holding companies under 
section 4(c)(8) of the BHC Act to underwrite and deal, to a limited 
extent, in all types of debt and equity securities, except interests in 
open-end investment companies (``bank-ineligible securities'') (see 
Canadian Imperial Bank of Commerce, et al., 76 Fed. Res. Bull. 158 
(1990); J.P. Morgan & Co. Incorporated., 75 Fed. Res. Bull. 192 
(1989)). The Board has determined that such activities are consistent 
with section 20 of the Glass-Steagall Act (12 U.S.C. 377) provided that 
the company engaged in underwriting and dealing in bank-ineligible 
securities does not derive more than 25 percent of its revenues from 
such activities. Section 4(c)(8) of the BHC Act also 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. 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 activity, that banks generally provide services that are 
operationally or functionally similar to the proposed activity so as to 
equip them particularly well to provide the proposed activity, or that 
banks generally provide services that are so integrally related to the 
proposed activity 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 Federal Register 794, 806 (1984).
    In order to approve the proposal, the Board must determine that the 
proposed activities to be conducted by Notificant ``can reasonably be 
expected to produce benefits to the public, such as grater 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). Notificant believes that the 
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 and received by Jennifer J. Johnson, Secretary, Board of 
Governors of the Federal Reserve System, Washington, D.C. 20551, not 
later than September 7, 1999. Any request for a hearing on this 
application must, as required by section 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

[[Page 44018]]

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 6, 
1999.
Robert deV. Frierson,
Associate Secretary of the Board.
[FR Doc. 99-20818 Filed 8-11-99; 8:45 am]
BILLING CODE 6210-01-F