Release Date: March 19, 1997

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Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (62 Federal Register 9432 (1997)). The time for filing comments has expired, and the Board has considered the notice and all comments received in light of the factors set forth in section 4(c)(8) of the BHC Act. Stichting Prioriteit ABN AMRO Holding, with total consolidated assets of $339.4 billion, is the largest commercial banking organization in the Netherlands.1 Notificants control seven depository institutions in Illinois and one commercial bank in New York. ABN AMRO Bank N.V. also operates branches in Boston, Massachusetts; Chicago, Illinois; New York, New York; Pittsburgh, Pennsylvania; and Seattle, Washington; and agencies in Atlanta, Georgia; Miami, Florida; Houston, Texas; and Los Angeles and San Francisco, California.

CitiFutures, CFL London, and CFL Singapore are wholly owned indirect subsidiaries of Citicorp, New York, New York, and engage in a variety of futures-related activities pursuant to specific Board orders, including providing execution and clearing, execution-only and clearing-only services with respect to futures and options on futures on financial and nonfinancial commodities.2 Notificants propose that ABN AMRO Chicago Corporation, Chicago, Illinois, Notificants' existing section 20 subsidiary, succeed to certain clearing businesses currently conducted by CitiFutures and acquire CFL Singapore. Notificants also propose that ABN AMRO Chicago Corporation (UK) Limited, London, England, succeed to the clearing businesses of CFL London. Activities Previously Approved by the Board The Board previously has determined by regulation and order that Notificants' proposed futures-related execution, clearing and advisory activities are so closely related to banking as to be proper incidents thereto, provided that the activities are conducted in conformity with certain limitations and conditions designed to, inter alia, ensure that the activities are consistent with safe and sound banking practices and mitigate potential conflicts of interests.3 Notificants have committed to conduct the activities in accordance with the limitations set forth in Regulation Y, the Board's orders, and interpretations relating to each of the activities, including the limitations noted in the ABN AMRO Order. Notificants also have specifically committed to apply the risk management policies, procedures and internal control systems that were subject to the Board's scrutiny in connection with the ABN AMRO Order.

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Proper Incident to Banking Standard In order to approve this notice, the Board must determine that the activities are a proper incident to banking, that is, that performance of the proposed activities "can reasonably be expected to produce benefits to the public . . . that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices."4 As part of its review of these factors, the Board considers the financial and managerial resources of the notificant and its subsidiaries and the effect the transaction would have on such resources.5 Based on all the facts of record, the Board concludes that financial and managerial considerations are consistent with approval of the proposal. The Board expects that the proposed transaction can reasonably be expected to provide added convenience and services to Notificants' customers by offering them an expanded range of futures-related products and services. There are numerous providers of the proposed futures-related services and, therefore, consummation of the proposal would not significantly decrease competition in any relevant market. The Board also believes that the conduct of the proposed activities within the framework established in this order, prior orders, and Regulation Y is not likely to result in significantly adverse effects, such as undue concentration of resources, decreased or unfair competition, or unsound banking practices. In addition, to address any potential adverse impact from the performance of the proposed activities, Notificants have committed to conduct the activities pursuant to conditions the Board previously has found satisfactory to mitigate potential adverse effects. Accordingly, the Board has concluded that the performance of the proposed activities by Notificants can reasonably be expected to produce public benefits that outweigh possible adverse effects under the proper incident to banking standard of section 4(c)(8) of the BHC Act.

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Based on the foregoing and all the facts of record, the Board has determined that the notice should be, and hereby is, approved. Approval of this notice is specifically conditioned on compliance by Notificants with the commitments made in connection with this notice. The Board's determination also is subject to all the terms and conditions set forth in Regulation Y, including those in sections 225.7 and 225.23(b) (12 C.F.R. 225.27 and 225.23(b)), and to the Board's authority to require such modification or termination of the activities of a bank holding company or any of its subsidiaries as the Board finds necessary to ensure compliance with, and to prevent evasion of, the provisions of the BHC Act and the Board's regulations and orders thereunder. For purposes of this transaction, the commitments and conditions agreed to by Notificants shall be deemed to be conditions imposed in writing by the Board in connection with its findings and decision, and as such may be enforced in proceedings under applicable law. This transaction shall not be consummated later than three months after the effective date of this order unless such period is extended for good cause by the Board or the Federal Reserve Bank of Chicago, acting pursuant to delegated authority.

By order of the Board of Governors,6 effective March 19, 1997. (signed) Jennifer J. Johnson Jennifer J. Johnson Deputy Secretary of the Board

Footnotes 1 Asset and ranking data are as of December 31, 1995, and use exchange rates then in effect. 2 See, e.g., Citicorp, 81 Federal Reserve Bulletin 164 (1995). 3 See 12 C.F.R. 225.25(b)(18), (b)(19); Stichting Prioriteit ABN AMRO Holding, 83 Federal Reserve Bulletin 138 (1997) ("ABN AMRO Order"). 4 12 U.S.C. § 1843(c)(8). 5 See 12 C.F.R. 225.24; see also The Fuji Bank, Limited, 75 Federal Reserve Bulletin 94 (1989); Bayerische Vereinsbank AG, 73 Federal Reserve Bulletin 155 (1987). 6 Voting for this action: Vice Chair Rivlin and Governors Kelley, Phillips, and Meyer. Absent and not voting: Chairman Greenspan.

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