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FEDERAL R E SE R V E BANK OF DALLAS
Station K, Dallas, Texas 7 5 2 2 2

Circular No. 84-118
December 4, 1984

TO:

All
member
banks, holding companies and others
concerned in the Eleventh Federal Reserve District

ATTENTION:

Chief Executive Officer

SUBJECT:

Application by Bankers Trust of New York to execute
and clear futures on a municipal bond index and to
provide related futures advisory services through its
subsidiary, BT Futures Corp.

SUMMARY:

The Board of Governors of the Federal Reserve System
is requesting comments on an application by Bankers
Trust New York Corporation to execute and clear
futures contracts on a municipal bond index and to
provide related futures advisory services through its
subsidiary, BT Futures Corp. These activities would
be performed through BT Futures Corp. offices in New
York, Chicago, Los Angeles, Dallas and Houston.
Interested parties are invited to submit their views
to the Secretary, Board of Governors of the Federal
Reserve
System,
Washington,
D.C.
20551,
by
December 14, 1984.

ATTACHMENTS:

Board's press release and Federal Register document

MORE INFORMATION:

Legal Department, Extension 6171

ADDITIONAL COPIES:

Public Affairs Department, Extension 6289

Banks and others are encouraged to use the following Incoming WATS numbers in contacting this Bank: 1-800-442-7140
(intrastate) and 1-800-527-9200 (interstate). For calls plaped locally, please use 651 plus the extension referred to above.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

FEDERAL RESERVE press release

For immediate release

November 20# 1984

The Federal Reserve Board today requested comment on
an application by Bankers Trust New York Corporation to expand
the scope of the activities of its subsidiary, BT Futures
Corp., which engages in futures commission merchant activities.
The Board has previously approved futures commission
merchant activities as permissible under the Bank Holding
Company Act but has not previously approved the proposed new
activities of executing and clearing municipal bond index
futures and providing related advisory services.
The proposal is set forth in the accompanying notice.
The Board requested comment by December 14, 1984.

Attachment

FEDERAL RESERVE SYSTEM
BANKERS TRUST NEW YORK CORPORATION
Proposal to Execute and Clear Futures on a Municipal
Bond Index and to Provide Futures Advisory Services

Bankers
York,

has

Holding

Trust

applied,
Company

New York

pursuant
Act

(12

to

Corporation,

New

section 4(c)(8)

U.S.C.

of

§ 1843(c)(8))

York,
the

New
Bank

and

sections 225.23(a)(2)

and

(3) of the Board's Regulation Y

C.F.R.

and

(3)),

clear

§ 225.23(a)(2)
futures

contracts

(12

for permission to execute and

on a municipal bond

index on major

commodities exchanges for nonaffiliated persons,

and to provide

advice with respect to futures and options that the Board has
permitted

futures

commission merchant

("FCM") subsidiaries of

bank holding companies to execute and clear.

These activities

would be performed through the applicant's FCM subsidiary,
Futures Corp.,
Illinois,

through offices in New York,

Los Angeles,

and London, England,

California,

New York,

BT

Chicago,

Dallas and Houston,

Texas,

serving customers in the United States and

abroad.
Section

4(c)(8)

of

the

Bank

Holding

provides that a bank holding company may,

Company

Act

with Board approval,

engage in any activity "which 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."

The

Board has

-

2-

previously approved of the provision of advisory services with
respect to futures and options where the underlying
products

are

securities,

bullion,

foreign

or money market

Incorporated, 70

Federal

exchange,

U.S.

instruments.

Reserve

Board has not previously approved

government

J.P.

Bulletin

financial

Morgan & Co.,

780

(1984).

The

the proposed execution and

clearance of futures contracts on a municipal bond index or the
provision
that

of

these

managing

advisory

activities

or

thereto.

related

are

controlling

services.

so closely related

banks

In Applicant's

Applicant

as

opinion,

to be

a

believes

to banking

proper

the brokerage

incident

of municipal

bond index futures and advisory services with respect
are

similar

to the brokerage

of

financial

or

futures

thereto

and

the

provision of futures advisory services previously approved by
the

Board.

activities

Applicant
are

similar

also
to

believes
municipal

that

the

securities

proposed
activities

performed by banks.
Interested persons may express their views on whether
the

proposed

activities

of

executing

contracts on a municipal bond
thereon are

"so closely

controlling banks

as

and

clearing

futures

index and of providing advice

related

to banking

to be a proper

or

incident

managing

or

thereto," and

whether the proposal as a whole can "reasonably be expected to
produce benefits
increased
possible

to the public,

competition or gains
adverse

effects,

such

such as greater convenience,
in efficiency,
as

undue

that

outweigh

concentration

of

-

3-

resources, decreased or unfair competition, conflicts of
interests, or unsound banking practices."

Any request for a

hearing on these questions must 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
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 for hearing should be submitted
in writing and received by the Secretary, Board of Governors of
the Federal Reserve System, Washington, D.C. 20551, not later
than December 14, 1984.
Board of Governors of the Federal Reserve System,
November 20, 1984.

(signed) William W. Wiles

William W. Wiles
Secretary of the Board