80 STAT. 242. of a foreign country or a dependency or insular possession of the United States and not engaged, directly or indirectly, in any activity in the United States except as, in the judgment of the Board of Governors of the Federal Reserve System, shall be incidental to the international or foreign business of such foreign bank; and, notwithstanding the provisions of section 23A of this Act, to make loans or extensions of credit to or for the account of such bank in the manner and within the limits prescribed by the Board by general or specific regulation or ruling.” (c) Section 18 of the Federal Deposit Insurance Act, as amended (12 Ú.S.C. 1828), is further amended by adding at the end thereof the following new subsection: "(j) The provisions of section 23A of the Federal Reserve Act, as amended, relating to loans and other dealings between member banks and their affiliates, shall be applicable to every nonmember insured bank in the same manner and to the same extent as if such nonmember insured bank were a member bank; and for this purpose any company which would be an affiliate of a nonmember insured bank, within the meaning of section 2 of the Banking Act of 1933, as amended, and for the purposes of section 23A of the Federal Reserve Act, if such bank were a member bank shall be deemed to be an affiliate of such nonmember insured bank." SEC. 13. (a) Subsection (b) of section 2 of the Banking Act of 1933, as amended (12 U.S.C. 221a), is further amended by inserting before the period at the end thereof the following:"; or "(4) Which owns or controls, directly or indirectly, either a majority of the shares of capital stock of a member bank or more than 50 per centum of the number of shares voted for the election of directors of a member bank at the preceding election, or controls in any manner the election of a majority of the directors of a member bank, or for the benefit of whose shareholders or members all or substantially all the capital stock of a member bank is held by trustees". (b) Subsection (c) of section 2 of the Banking Act of 1933, as amended (12 U.S.C. 221a), is repealed. 48 Stat. 183; Ante, p.241. Post, p.243. 12 USC 371c. Insured banks, regulations. 64 Stat. 891. 48 Stat. 162. 12 USC 221a. Repeal. (c) Section 5144 of the Revised Statutes, as amended (12 U.S.C. 61), Shareholders' is amended to read as follows: voting rights. "SEC. 5144. In all elections of directors, each shareholder shall have the right to vote the number of shares owned by him for as many persons as there are directors to be elected, or to cumulate such shares and give one candidate as many votes as the number of directors multiplied by the number of his shares shall equal, or to distribute them on the same principle among as many candidates as he shall think fit; and in deciding all other questions at meetings of shareholders, each shareholder shall be entitled to one vote on each share of stock held by him; except that (1) this shall not be construed as limiting the voting rights of holders of preferred stock under the terins and provisions of articles of association, or amendments thereto, adopted pursuant to the provisions of section 302(a) of the Emergency Banking and Bank Conservation Act, approved March 9, 1933, as amended; 48 Stat. 148. (2) in the election of directors, shares of its own stock held by a national bank as sole trustee, whether registered in its own name as such trustee or in the name of its nominee, shall not be voted by the registered owner unless under the terms of the trust the manner in which such shares shall be voted may be determined by a donor or beneficiary of the trust and unless such donor or beneficiary actually directs how such shares shall be voted; and (3) shares of its own stock held by a national bank and one or more persons as trustees may be voted by such other person or persons, as trustees, in the same manner as if he or they were the sole trustee. Shareholders may vote 12 USC 51b. 80 STAT, 243 40 Stat. 968; 48 Stat. 163. 48 Stat. 165. Repeal. 49 Stat. 717. Repeal. 54 Stat. 798. by proxies duly authorized in writing; but no officer, clerk, teller, or bookkeeper of such bank shall act as proxy; and no shareholder whose liability is past due and unpaid shall be allowed to vote. Whenever shares of stock cannot be voted by reason of being held by the bank as sole trustee such shares shall be excluded in determining whether matters voted upon by the shareholders were adopted by the requisite percentage of shares." (d) Paragraph (c) of section 5211 of the Revised Statutes (12 U.S.C. 161) is amended by striking out the second sentence thereof. (e) The last sentence of the sixteenth paragraph of section 4 of the Federal Reserve Act, as amended (12 U.S.C. 304), is amended by striking out all of the language therein which follows the colon and by inserting in lieu thereof the following: "Provided, That whenever any member banks within the same Federal Reserve district are subsidiaries of the same bank holding company within the meaning of the Bank Holding Company Act of 1956, participation in any such nomination or election by such member banks, including such bank holding company if it is also a member bank, shall be confined to one of such banks, which may be designated for the purpose by such holding company." (f) The nineteenth paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 334) is amended by striking out the last sentence of such paragraph. (g) The twenty-second paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 337) is repealed. (h) The third paragraph of section 23A of the Federal Reserve Act (12 U.S.C. 371c) is amended by striking out that part of the first sentence that reads "For the purpose of this section, the term 'affiliate' shall include holding company affiliates as well as other affiliates, and"; and by changing the word "the" following such language to read "The". (i) Paragraph (4) of section 3(c) of the Investment Company Act of 1940 (15 U.S.C. 80a-3) is repealed. (j) Paragraph (11) of section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2) is amended by striking out the words "or any holding company affiliate, as defined in the Banking Act of 1933" and substituting therefor the words "or any bank holding company as defined in the Bank Holding Company Act of 1956”. Approved July 1, 1966. LEGISLATIVE HISTORY: HOUSE REPORT No. 534 (Comm. on Banking & Currency). Vol. 111 (1965): Sept. 13, considered in House. Vol. 112 (1966): June 6, June 7, June 21, considered and passed Senate, House concurred in Senate amend- Public Law 90-437 90th Congress, S. 1299 July 29, 1968 An Act To amend the Securities Exchange Act of 1934 to permit regulation of the amount of credit that may be extended and maintained with respect to securities that are not registered on a national securities exchange. 82 STAT. 452 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 7 of Over-the-counter the Securities Exchange Act of 1934 (15 U.S.C. 78g) is amended securities. (1) by striking out "registered on a national securities ex- Margin requirechange" in subsection (a); (2) by amending subsection (c) to read as follows: "(c) It shall be unlawful for any member of a national securities exchange or any broker or dealer, directly or indirectly, to extend or maintain credit or arrange for the extension or maintenance of credit to or for any customer—— "(1) on any security (other than an exempted security), in contravention of the rules and regulations which the Board of Governors of the Federal Reserve System shall prescribe under subsections (a) and (b) of this section; "(2) without collateral or on any collateral other than securities, except in accordance with such rules and regulations as the Board of Governors of the Federal Reserve System may prescribe (A) to permit under specified conditions and for a limited period any such member, broker, or dealer to maintain a credit initially extended in conformity with the rules and regulations of the Board of Governors of the Federal Reserve System, and (B) to permit the extension or maintenance of credit in cases where the extension or maintenance of credit is not for the purpose of purchasing or carrying securities or of evading or circumventing the provisions of paragraph (1) of this subsection." (3) by striking out "registered on a national securities exchange" in the first sentence of subsection (d) and "registered on national securities exchanges" in the second sentence of that subsection. Approved July 29, 1968. ments. 48 Stat. 886. LEGISLATIVE HISTORY: HOUSE REPORT No. 1663 accompanying H. R. 7696 (Comm. on Interstate and Foreign Commerce). SENATE REPORT No. 1264 (Comm. on Banking & Currency). CONGRESSIONAL RECORD, Vol. 114 (1968): June 19: Considered and passed Senate. July 15: Considered and passed House, amended, in lieu of H. R. 7696. July 17: Senate agreed to House amendment. Public Law 90-438 Joint Resolution To amend the Securities Exchange Act of 1934 to authorize an investigation of the effect on the securities markets of the operation of institutional investors. Whereas there has been a very significant increase in the amount of securities held and traded by institutional investors both in absolute terms and in relation to other types of investors; and Whereas such an. increase may have an impact upon the maintenance of fair and orderly securities markets, upon the issuers of securities traded in such markets, and upon the interests of investors and the public interest: Now, therefore, be it Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That section 19 of the Securities Exchange Act of 1934 (15 U.S.C. 78s) is amended by adding at the end thereof the following: "(e) (1) The Commission is authorized and directed to make a study and investigation of the purchase, sale, and holding of securities by institutional investors of all types (including, but not limited to, banks, insurance companies, mutual funds, employee pension and welfare funds, and foundation and college endowments) in order to determine the effect of such purchases, sales, and holdings upon (A) the maintenance of fair and orderly securities markets, (B) the stability of such markets, both in general and for individual securities, (C) the interests of the issuers of such securities, and (D) the interests of the public, in order that the Congress may determine what measures, if any, may be necessary and appropriate in the public interest and for the protection of investors. The Commission shall report to the Congress, on or before September 1, 1969, the results of its study and investigation, together with its recommendations, including such recommendations for legislation as it deems advisable. "(2) For the purposes of the study and investigation authorized by this subsection, the Commission shall have all the power and authority which it would have if such investigation were being conducted pursuant to section 21 of this Act. The Commission is authorized to appoint, without regard to the provisions of title 5, United States Code, governing appointments in the competitive service, and to pay, without regard to the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates, such personnel as the Commission deems advisable to carry out the study and investigation authorized by this subsection, but no such rate shall exceed the per annum rate in effect for a GS-18. "(3) In connection with the study authorized by this subsection, the Commission shall consult with representatives of various classes of institutional investors, members of the securities industry, representatives of other Government agencies, and other interested persons. The Commission shall also consult with an advisory committee which it shall establish for the purpose of advising and consulting with the (339) 82 STAT. 453 Securities Effect of insti- 48 Stat. 898. 15 USC 78u. 80 Stat. 408, 443, 467. 5 USC 2101, 5101, 5331. 33 F. R. 8641. 82 STAT, 453 Commission on a regular basis on matters coming within the purview of such study. "(4) There is authorized to be appropriated not to exceed $875,000 for the study and investigation authorized by this subsection." Approved July 29, 1968. LEGISLATIVE HISTORY: HOUSE REPORT No. 1665 accompanying H. J. Res. 946 (Comm. on SENATE REPORT No. 1237 (Comm. on Banking & Currency). June 18: Considered and passed Senate. July 15: Considered and passed House, amended, in lieu of July 17: Senate agreed to House amendment. |