83-1

March 31, 1983

Dear Mr. _________:
This is in response to your letter of March 18, 1983, whereby you requested our comments on a plan to solicit California customers to open accounts in overseas offices of your bank. You propose to have your Los Angeles Representative Office solicit these accounts, and the funds would be channeled overseas through your San Francisco Depositary Agency office.
In some instances, the overseas office might ask the San Francisco Agency to retain the funds and invest them locally.
In our opinion, this program would be in violation of Financial Code Sections 1728, 1755(a)(2), and 3390.
Very truly yours,
HAROLD D. DOYLE
Acting Superintendent of Banks
By
JOHN R. PAULUS
Deputy Superintendent

March 18, 1983
Mr. Harold D. Doyle

Dear Mr. Doyle:
I take the liberty of addressing this letter to you to discuss a proposed method of providing our customers with a broader range of investment opportunities.
As the Representative of the _________, seconded to our office in Los Angeles, I am charged with the responsibility to develop business opportunities for the international network of the bank.
The _________, _________, has maintained a presence in California since 1970 operating a branch in San Francisco and a representative office in Los Angeles. Branches in New York and Chicago, a subsidiary bank in Chicago and a representative office in Houston complete our Bank’s network in the United States, while worldwide we have a presence in all of the most important financial centers.
Through this extensive network, the _________ is able to provide its customers with investment opportunities worldwide. A number of our California clients have raised questions as to how they may place qualified funds with the _________.
It is my intention to provide our customers with the quoted rates from our overseas branches and encourage the placement of eligible funds with these branches. In order to facilitate the movement of funds, I will ask that all funds be transferred to the accounts that all of these foreign branches maintain with the San Francisco branch. This would provide a practical advantage as the foreign branches can easily instruct San Francisco on proper and efficient placement of the funds. Repayment of funds to the investing customers would be through the San Francisco branch.
In order to overcome problems associated with time differences, it is very likely that overseas branches will request the San Francisco office to invest these funds for them. This action would allow the various branches of our group to take advantage of the highly volatile nature of rates in these times.
It is my stated purpose to increase the business activity of the _________ and provide new investment opportunities for qualified clients. Your comments are requested on this proposal.
I thank you for your kind attention.
Sincerely,