| May 10, 1996 |
|
John Walker, Esq. Dear Mr. Walker: This responds to your request on behalf of Toronto Dominion Securities (USA) Inc., New York, New York ("TDSI"), the section 20 subsidiary of Toronto-Dominion Bank, Toronto, Canada ("Toronto-Dominion"), requesting a determination whether a notice under the Bank Holding Company Act ("BHC Act") and Regulation Y must be filed with the Board in connection with the hiring of nine employees by TDSI from Gateway Capital Investment Group Inc., New York, New York ("Gateway"). Gateway is a securities firm engaged in buying and selling securities on behalf of customers on both an agent and riskless principal basis. TDSI has entered into employment contracts with all six principals of Gateway. These employment contracts include both signing and stay bonuses. TDSI also has hired Gateway's three support staff. TDSI will not acquire any stock or assets of Gateway and will not pay any consideration to Gateway or its shareholders in this transaction. The principals of Gateway have determined to dissolve Gateway. Under Regulation Y, a company must submit a notice to acquire or control the assets of another company. 12 C.F.R. 225.23(a). Based on a review of the facts of record, Board staff does not believe that any regulatory purpose would be served by requiring Toronto-Dominion to file a notice with respect to the hiring of Gateway's personnel by TDSI. In reaching this conclusion, Board staff notes that TDSI did not acquire any of Gateway's stock, assets or liabilities, and did not pay additional consideration to Gateway or its principals in connection with the hiring of the employees. The addition of Gateway personnel is small relative to TDSI's operations, representing only a 10 percent increase in staff. In addition, Toronto-Dominion previously obtained Board approval to engage in the relevant securities activities, and the operations of TDSI continue to be subject to the commitments made in connection with that approval. Moreover, consummation of this transaction is not likely to result in significantly adverse affects, such as undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices. In making this determination, I have relied on these and other facts and representations presented to Board staff. Any material change in these facts or representations should be communicated to Board staff, and may cause this determination to be reconsidered. Should TDSI propose to engage in additional activities or acquire other nonbanking companies, Toronto-Dominion must provide prior notice to the Board as required under the BHC Act and Regulation Y.
Sincerely yours,
(signed) Scott G. Alvarez
Scott G. Alvarez cc: Federal Reserve Bank of New York |
