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Federal R eserve Bank OF DALLAS DALLAS. TEXAS 75222 May 16, 1985 Circular 85-64 TO: The Chief Executive Officer of all member banks, bank holding companies and others concerned in the Eleventh Federal Reserve District SUBJECT Proposal to deal in foreign currency options traded on a stock exchange through a jo in t venture DETAILS The Board of Governors of the Federal Reserve System has requested comment, by May 28, 1985, on an application by Compagnie Financiere de Suez and Banque Indosuex, both of Paris, France, to engage in the activity of dealing in foreign currency options traded on the Philadelphia Stock Exchange through a joint venture with Drexel Burnham Lambert Group Inc., New York, New York. Interested parties are invited to submit their views on the application to Mr. William W. Wiles, Secretary, Board of Governors of the Federal Reserve System, Washington, D. C. 20551. ATTACHMENTS The Board's press release and the material as submitted for publication in the Federal Register are attached. M RE INFORMATION O For further information, please contact this Bank's Legal Department at (214) 651-6228. Sincerely yours, For additional copies of any circular please contact the Public Affairs Department at (214) 651-6289. Banks and others are encouraged to use the following incoming WATS numbers in contacting this Bank (800) 442-7140 (intrastate) and (800) 527-9200 (interstate). This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) FEDERAL RESERVE press release April 25, 1985 For immediate release The Federal Reserve Board today requested comment on an application by Compagnie Financiere de Suez and it s subsidiary, Banque Indosuez, both of Paris, France, to deal in foreign currency options traded on a stock exchange through a jo in t venture. The Board requested comment by May 28, 1985. This is an a c tiv ity the Board has not previously found to be permissible fo r bank holding companies. I t would be performed under a jo in t venture with Drexel Burnham Lambert Group In c ., New York, through the company's offices in Philadelphia as well as on the Philadelphia Stock Exchange. The Board's notice is attached. -0 - Attachment FEDERAL RESERVE SYSTEM COMPAGNIE FINANCIERE DE SUEZ AND BANQUE INDOSUEZ Proposal to Deal in Foreign Currency Options Traded on a Stock Exchange Through a Joint Venture Compagnie Banque indosuez, and Regulation Y engage de both of Paris, to section 4(c)(8) § 1843(c)(8)) Financiere of the Bank Suez France, Holding (12 C.F.R. through Lambert Group Inc., banking firm. a New York, Banque percent of the shares of ("Company"), Options Inc., vehicle for the proposed through conducting Company's Philadelphia Stock States and abroad. venture and to Drexel proposed The offices Exchange, permission DBL would to in traded investment each own Burnham Lambert formed to serve activity would 50 and customers in inc. (French) as through be in Burnham Burnham Lambert, Philadelphia serving Drexel ("DBL"), an activity in Board's franc options with New York previously venture. for (12 U.S.C. Applicants would engage Indosuez-Drexel the the pursuant foreign currency options Indosuez successor a company joint joint applied, of in French on the Philadelphia Stock Exchange. activity subsidiary, Company Act § 225.23(a)(3)), in the activity of dealing its have section 225.23(a)(3) the role of specialist in such the and the the performed on the the united -2 - Section 4(c)(8) provides engage of the Bank Holding that a bank holding company may, in any activity “which the Board opportunity for hearing has determined Company Act with Board approval, after due notice and (by order or regulation) to be so closely related to banking or managing or controlling banks as to be a proper previously that the activity or the The Board has not Applicants believe is so closely related controlling banks Applicants' equivalent and thereto." the proposed activity. approved Applicants engage as to be a proper opinion, to other historically incident currency aspects dealt of to banking or managing incident options foreign in the proposed In functionally exchange in by commercial state that at least one bank are thereto. traditionally banks. In addition, has been permitted activity of acting as to a specialist in foreign currency options on a stock exchange. interested persons may express the proposed activity, conducted basis proposed, is as to be a proper whether the proposal as a whole can produce benefits increased possible to the competition adverse public, or effects, gains such views on whether through a joint venture on the "so closely related or controlling banks their as incident thereto," and "reasonably be expected such in to banking or managing as greater efficiency, undue to convenience, that outweigh concentration of -3 - resources, decreased interests, or hearing on these questions unsound or unfair banking competition, practices." conflicts Any request of for must be accompanied by a statement of the reasons why a written presentation would not suffice lieu of a hearing, fact that are be presented identifying in dispute, at a a specifically summarizing hearing, and any questions the evidence indicating how the in of that would party commenting would be aggrieved by approval of the proposal. The application may be inspected at the offices of the Board of Governors or the Federal Reserve Bank of New York. Any views or requests in writing and of Governors of received the Federal of should be submitted by William w. Wiles, 20551, not later than May 28, Board for hearing Governors Reserve System, Secretary, Board Washington, D.C. 1985. of the Federal Reserve System, April 23, 1984. William W. Wiles Secretary of the Board