The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
federal reserve B a n k o f D alla s PALLAS. TEXAS 78222 Circular No. 82-134 O ctober 20, 1982 INFORMAL HEARING SWEEP ACCOUNTS TO ALL MEMBER BANKS AND OTHERS CONCERNED IN THE ELEVENTH FEDERAL RESERVE DISTRICT: The Board o f Governors o f the F ed eral R e se r v e S ystem has announced that it is scheduling an inform al hearing in order to giv e in te r e ste d p arties an opportunity to express their v iew s in con n ection with a p e titio n to the Board by the S e c u r ities Industry A ssociation to prohibit the operation o f sw e e p a c cou n ts by mem ber banks. The inform al hearing is scheduled at the Federal R ese r v e Board, Washington, D .C ., on N ovem ber 3 and 4, 1982, com m en cin g at 9:30 a.m , Interested p arties may also submit w ritten c o m m e n ts to the Secretary, Board o f Governors o f the Federal R ese r v e System , Washington, D .C ., 20551, not later than N ovem ber 4, 1982, Written c o m m e n ts should re fe r to D o c k e t number R -0422. A tta c h e d are c o p ies o f the press r e le a se and the m aterial as subm itted for publication in the Federal R e ig s te r . Q uestions regarding the m aterial con tain ed in this circular should be d ir e c te d to this Bank's L egal D epartm ent, E xtension 6171. Additional c o p ies o f this circular will be furnished upon request to the D ep artm en t o f Com m unications, Financial and Com m unity A ffairs, Extension 6289. Sincerely yours, William H. Wallace First Vice P resident Banks and others are encouraged to use the following incoming W ATS numbers in contacting this Bank: 1-800-442-7140 (intrastate) and 1-800-527-9200 (interstate). For calls placed 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 RE^I For immediate release October 5, 1982 The Federal Reserve Board today announced that it is scheduling an informal hearing before the Board's staff to gather information and give interested parties an opportunity to express their views in connection with a petition to the Board by the Securities Industry Association to prohibit the operation of sweep accounts by member banks. Comment may also be submitted in writing. The hearing is scheduled for November 3 and 4, 1982, at the Board's offices in Washington, D.C. The Board's announcement is attached. -0 - Attachment FEDERAL RESERVE SYSTEM Petition Regarding Sweep Arrangements Notice of Informal Hearing Docket No. R-0422 The Securities Industry Association has petitioned the Board to prohibit the operation of sweep accounts by member banks. Such sweep accounts typically involve an agreement between a depository institution and one or more investment companies registered with the Securities and Exchange Commission under the Investment Company Act of 1940. Generally under these arrangements, funds deposited with the depository institution in a demand deposit or N OW account in excess of a pre-determined balance would be swept into the investment company by the purchase of shares or securities of the investment company. The balances maintained by the customer with the investment company may then be subject to an agreement that provides for the automatic or preauthorized transfer back to the customer's checking account of the depository institution or to some other account of the depository institution. The Securities Industry Association has asserted that such sweep arrangements involve underwriting the public distribution of securities by the participating depository institution in violation of the GlassSteagall Act. A copy of the Securities Industry Association's petition may be obtained from the Hoard's Freedom of Information Office (202/452 3684) . To solicit further factual information concerning the operation o f sweep arrangements and to give interested parties an opportunity to express their views, the B o a r d has scheduled an informal public hearing before the Board's staff to be held at the Federal Reserve Board, Washington, D.C., on November 3 and 4, 1982, commencing at 9:30 a.m. In addressing this issue, interested parties may comment on sweep arrangements in connection with the Glass-Steagall Act and the issues raised by the Securities Industry Association in its petition. The presiding officer at the hearing shall be authorized to administer oaths and to establish time limits for persons wishing to be heard. A person wishing to present evidence at this informal hearing should file with the Secretary of the Board a request to appear at the hearing. All requests should refer to Docket number R-0422. The request to present evidence should be received at the Secretary's office in Washington, D.C., 20551, no later than October 25, 1982, and should specify the names of the persons who desire to present evidence, the interest of those persons in the proceeding, and the matters concerning which those persons desire to present evidence. Interested parties who do not wish to participate in tha informal hearing may submit written comments to the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C., 20551, not later than November 4, 1982. All such submissions should refer to Docket number R-0422* For further information regarding this matter, oontact Robert G. fallen, Attorney, Board of Governors of the Federal Reserve System, Washington, D»C •, 20551 (202/452-3265). Board of Governors of the Federal Reserve System, October 1, 1982. (signed) William W, Wiles william w. Wiles Secretary of the Board [SEAL]