| September 24, 1996
|Circular No. 10876|
-- Proposed Revision of Regulation Y
To All Bank Holding Companies, and Others Concerned, in the Second Federal Reserve District:
Proposed Revision -- Comments due October 31, 1996 Following is the text of a statement issued by the Board of Governors of the Federal Reserve System:
The Federal Reserve Board has requested comment on proposed revisions to Regulation Y that are intended to improve the competitiveness of bank holding companies by eliminating unnecessary regulatory burden and operating restrictions, and by streamlining the application and notice process.
Comment is requested by October 31, 1996.
The proposed revisions include:
The text of the Board's proposal, as printed in the Federal Register of September 6 is available. Comments thereon should be submitted by October 31, 1996, and sent to the Board as specified in the notice, or to our Banking Applications Department.
Investment Adviser Activities -- Amendment effective September 30, 1996
The following statement was also issued by the Board of Governors:
The Federal Reserve Board has announced adoption of a final amendment to the Board's interpretive rule regarding investment adviser activities contained in Regulation Y (12 C.F.R. 225.125). The final rule is effective September 30, 1996.
The amendment permits a bank holding company (and its bank and nonbank subsidiaries) to purchase, in a fiduciary capacity, securities of an investment company advised by the bank holding company if the purchase is specifically authorized by the terms of the instrument creating the fiduciary relationship, by court order, or by the law of the jurisdiction under which the trust is administered.
The text of the amended interpretation to Regulation Y, as published in the Federal Register of August 30 is available. Questions on this matter may be directed to Jay B. Bernstein, Bank Supervision Officer.
William J. McDonough