August 23, 1990
TO: SEC RULES COMMITTEE NO. 45-90
INTERNATIONAL FUNDS TASK FORCE NO. 19-90
RE: SEC PROPOSES AMENDMENTS TO RULE 6c-9
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The SEC has published for comment proposed amendments to
Rule 6c-9 under the Investment Company Act of 1940 ("1940 Act").
In its current form, Rule 6c-9 exempts foreign banks and their
finance subsidiaries that offer or sell their debt securities or
non-voting preferred stock within the United States from
registration as investment companies under the 1940 Act. As
proposed to be amended, the Rule would be expanded to exempt
offers and sales by foreign banks and their finance subsidiaries
of their equity securities, offers and sales by foreign insurance
companies and their finance subsidiaries of their equity and debt
securities, and offers and sales by certain foreign bank and
insurance company holding companies of their equity and debt
securities from registration under the 1940 Act. A copy of the
proposing release is attached.
Like recently adopted Rule 12d1-1, which removed
restrictions on registered investment companies' purchases of
equity and debt securities issued by foreign banks and insurance
companies and their finance subsidiaries, Rule 6c-9 would apply
only to direct interests in or obligations of a foreign bank or
insurance company or a finance subsidiary of a foreign bank or
insurance company. (The proposed amendments to Rule 6c-9 would
define a foreign insurance company and a finance subsidiary of a
foreign bank or foreign insurance company in the same way as Rule
12d1-1.) Unlike Rule 12d1-1, however, Rule 6c-9 as proposed to
be amended also would apply to a "qualified holding company" of a
foreign bank or insurance company.
Along with the proposed amendments to Rule 6c-9, the SEC
issued a companion interpretive release setting forth its
position that for the purpose of determining the applicability of
1940 Act registration requirements, a U.S. branch or agency of a
foreign bank that issues securities in the U.S. will be deemed to
be a "bank" within the meaning of Section 2(a)(5)(c) of the 1940
Act if it is subject to "substantially equivalent" federal and/or
state regulation and supervision as domestic banks in the same
jurisdiction. A copy of that interpretive release also is
attached.
Comments on the proposed amendments to Rule 6c-9 are due 90
days from publication in the Federal Register. Among other
things, the Institute plans to suggest that Rule 12d1-1 be
conformed to Rule 6c-9 as proposed to be amended, by expanding it
to apply to securities issued by a "qualified holding company" of
a foreign bank or insurance company, and that the SEC's
interpretive position with respect to U.S. branches or agencies
of foreign banks be applicable for purposes of Rule 12d1-1. If
there are other comments or positions you would like the
Institute to consider, please contact me by September 25, 1990.
Frances M. Stadler
Assistant General Counsel
Attachments