October 9, 1992
TO: BOARD OF GOVERNORS NO. 73-92
SEC RULES COMMITTEE NO. 75-92
BANK INVESTMENT MANAGEMENT MEMBERS NO. 6-92
RE: FEDERAL RESERVE RELEASE CONCERNING FULL BROKERAGE
ACTIVITIES
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On September 10, 1992, the Federal Reserve Board issued the
attached amendment to its Regulation Y, which allows the
expedited processing of applications by bank holding companies to
engage in full service securities brokerage.
As we previously reported, in July the Federal Reserve
Board revised an interpretive rule to provide expressly that a
bank holding company or its nonbank subsidiary may act as an
agent for customers in the brokerage of shares of an investment
company advised by the holding company or any of its
subsidiaries. (See Memorandum to Board of Governors No. 46-92,
SEC Rules Committee No. 48-92, and Bank Investment Management
Members No. 2-92, dated July 22, 1992.) The Board’s September
10th release apparently allows such a bank holding company to
apply to engage in such activities de novo by filing a notice
with the appropriate Reserve Bank. (Applications to acquire
entities that engage in such activities still must be considered
through the full applications process.)
Under the notice procedure, the applicant may commence the
activity 30 days after receipt by the Reserve Bank of the notice
unless the Reserve Bank (1) returns the notice because it is
incomplete or requires an application; (2) notifies the company
that it may consummate the transaction at an earlier date; (3)
extends the 30-day period for an additional 15 days; or (4)
refers the notice to the Board for decision because substantive
adverse comment is received or it otherwise appears appropriate.
We will keep you informed of any further development.
Thomas M. Selman
Assistant Counsel
Attachment