| July 1, 1997 |
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Mr. John W. McPartland Dear Mr. McPartland: This will respond to your request for a determination that management interlocks between CME Depository Trust Co., Chicago, Illinois ("CME Trust") and unaffiliated depository organizations would not be prohibited by the Depository Institutions Management Interlocks Act ("Interlocks Act") or the Board's Regulation L. I understand that CME Trust, a state-chartered trust company, is a wholly owned subsidiary of the Chicago Mercantile Exchange. You have explained that CME Trust offers collateral management and trade administration services exclusively to financial institutions involved in privately negotiated derivatives transactions. You also have stated that CME Trust would not accept deposits other than in a fiduciary capacity, and would not make loans. The general purpose of the Interlocks Act is to promote competition among depository institutions, specifically with respect to the provision of deposit and credit services, by prohibiting certain management interlocks that may lead to anticompetitive practices.1 Board staff previously has opined that although trust companies are specifically included in the definition of depository institutions under the Interlocks Act, a trust company that does not have the power to accept deposits other than in a fiduciary capacity, or to make loans, would not appear to be able to affect competition among providers of deposit or credit services.2
Based on the facts you have presented, it is my view that CME Trust is not a depository institution as contemplated by the Interlocks Act and Regulation L. Consequently, interlocks between CME Trust and other depository organizations are not prohibited by the Act or Regulation L.
Sincerely,
(signed) J. Virgil Mattingly
J. Virgil Mattingly
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Footnotes
1. See generally H.R. Rep. No. 1383, 95th Cong., 2d Sess. 14 (1978). Return to text 2. See Letter, dated July 14, 1994, to Mr. Charles M. Thompson, from J. Virgil Mattingly, Jr., General Counsel of the Board.Return to text |
