[Federal Register Volume 64, Number 199 (Friday, October 15, 1999)]
[Notices]
[Pages 55936-55937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-26927]


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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

    The companies listed in this notice have given notice under section 
4 of the Bank Holding Company Act (12 U.S.C. 1843) (BHC Act) and 
Regulation Y (12 CFR Part 225) to engage de novo, or to acquire or 
control voting securities or assets of a company, that engages either 
directly or through a subsidiary or other company, in a nonbanking 
activity. These activities will be conducted worldwide.
    Each notice is available for inspection at the Federal Reserve Bank 
indicated. The notice also will be available for inspection at the 
offices of the Board of Governors. Interested persons may express their 
views in writing on the question whether the proposal complies with the 
standards of section 4 of the BHC Act.
    Unless otherwise noted, comments regarding the applications must be 
received at the Reserve Bank indicated or the offices of the Board of 
Governors not later than October 29, 1999.
    A. Federal Reserve Bank of New York (Betsy Buttrill White, Senior 
Vice President) 33 Liberty Street, New York, New York 10045-0001:
    1. National Westminster Bank Plc, London, England; to make an 
investment through its wholly owned subsidiary, NatWest Group Holdings 
Corporation, New York, New York, in Identrus, LLC, New York, New York 
(Company) (formerly known as Global Trust Organization LLC), and 
thereby engage de novo directly and through Company, in digital 
certification and data processing and data transmission activities, as 
described below. Notificant also proposes to engage in activities that 
it maintains are incidental to permissible digital certification and 
data processing and data transmission activities.
    Notificant proposes to acquire more than 5 percent of the 
outstanding voting interests in Company, a de novo limited liability 
company.
    Other investors in Company would include national banks and state 
member banks. Company would serve as the rulemaking authority for a 
network of participating financial institutions (Network), which would 
include Notificant, future equity investors in Company, and other 
financial institutions that elect to participate in the Network 
(collectively, Participants). The Network is designed to allow 
Participants to certify electronically the identity of parties 
conducting business or communicating electronically through the 
internet or otherwise. Participants in the Network would, among other 
things, issue to customers ``digital certificates'' that authenticate 
messages electronically sent by the customer, and confirm the validity 
of digital certificates issued by Participants. Participants also may 
issue warranties to customers who request verification of digital 
certificates issued by Participants, and post collateral to secure 
claims under any warranty issued by the Participant.
    Company would develop, maintain, and enforce the rules governing 
the operation of, and participation in, the Network, and provide other 
services designed to facilitate the certification activities of 
Participants and operation of the Network. These activities would 
include issuing digital certificates to Participants and maintaining a 
current database of digital certificates that have been issued. Company 
and Participants would engage in a wide range of data processing and 
data transmission activities in connection with their proposed 
activities. A more complete description of the proposed activities of 
Company, Notificant, and other Participants is contained in the 
notices.
    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 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. 
The Board previously has determined that certain data processing and 
data transmission services are closely related to banking for purposes 
of section 4(c)(8) of the BHC Act, pursuant to Sec.  225.28(b)(14) of 
Regulation Y. Notificant contends that all of the proposed activities 
are so closely related to banking as to be a proper incident thereto, 
or are activities that are incidental to permissible activities, 
pursuant to Sec.  225.21(a)(2) of Regulation Y.
    In determining whether the proposal satisfies the proper incident 
to banking standard of section 4(c)(8) of the BHC Act, the Board must 
consider whether consummation of 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). Notificant contends 
that consummation of the proposal will facilitate the development of 
electronic commerce and will have a beneficial effect on competition 
for identity certification and related services.
    In publishing the proposal for comment, the Board does not take a 
position on the 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 proposal and does not represent a determination 
by the Board that the proposal meets, or is likely to meet, the 
standards of the BHC Act. The notice is available for immediate 
inspection at the Federal Reserve Bank indicated above and at the 
offices of the Board of Governors. Any request for a hearing on the 
notices must be accompanied by a statement of reasons explaining 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.
    2. UBS AG, Zurich, Switzerland (``Notificant''); to acquire certain 
subsidiaries of Global Asset Management Limited, Hamilton, Bermuda 
(``GAML''), including Global Asset Management (USA) Inc., GAM 
Investments Inc., GAM Services Inc., and GAM Funding Inc., all in New 
York, New York, and GAM International Management Limited, London, 
England,

[[Page 55937]]

and thereby engage in certain nonbanking activities, including 
extending credit and servicing loans, pursuant to Sec.  225.28(b)(1) of 
Regulation Y; acting as investment advisor to any person, pursuant to 
Sec.  225.28(b)(6) of Regulation Y; agency transactional services, 
pursuant to Sec.  225.28(b)(7) of Regulation Y; providing certain 
administrative services to mutual funds, see Bankers Trust New York 
Corp., 83 Fed. Res. Bull. 780 (1997); and serving as the investment 
advisor and commodity pool operator to trusts, limited partnerships, 
and mutual funds, and serving as the general partner of limited 
partnerships that invest only in securities and other instruments which 
Notificant would be permitted to hold directly under the Bank Holding 
Company Act, see Travelers Group Inc./Citigroup, 84 Fed. Res. Bull. 985 
(1998); UBS AG, 84 Fed. Res. Bull. 684 (1998). Comments regarding this 
application must be received by November 10, 1999.

    Board of Governors of the Federal Reserve System, October 8, 
1999.
Robert deV. Frierson,
Associate Secretary of the Board.
[FR Doc. 99-26927 Filed 10-14-99; 8:45 am]
BILLING CODE 6210-01-F