Beverly Hills Bancorp Inc.; Notice of Application, 24543-24546 [2012-9772]
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Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Notices
release of radioactive material than the
alternative to the proposed action.
Therefore, the exemption is in the
public interest.
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Environmental Consideration
The NRC staff also considered in the
review of this exemption request
whether there would be any significant
environmental impacts associated with
the exemption. For this proposed action,
the NRC staff performed an
environmental assessment pursuant to
10 CFR 51.30. The proposed action is
the approval of a request for a one-time
exemption from the requirements of 10
CFR 72.212(b)(3) and the portion of
72.212(b)(11), which requires
compliance with the terms, conditions,
and specifications of a CoC, but only to
the extent necessary to allow Dominion
to store the seven DSCs in the current
as-loaded configuration at the North
Anna Power Station ISFSI.
The NRC staff determined that the
proposed action will not significantly
impact the quality of the human
environment. The NRC staff concludes
that there are no changes being made in
the types or amounts of any radiological
effluents that may be released offsite,
and there is no significant increase in
occupational or public radiation
exposure as a result of the proposed
action. In addition the proposed action
only affects the requirements associated
with the fuel assemblies already loaded
into the casks and does not affect nonradiological plant effluents, or any other
aspects of the environment. The
Environmental Assessment and the
Finding of No Significant Impact are
documented in the Federal Register (77
FR 20438, dated April 4, 2012).
4.0 Conclusion
Based on the foregoing
considerations, the NRC has
determined, pursuant to 10 CFR 72.7,
that the exemption is authorized by law,
will not endanger life or property or the
common defense and security, and is
otherwise in the public interest.
Therefore, the NRC grants Dominion a
one-time exemption from the
requirements in 10 CFR 72.212(b)(3) and
from the portion of 10 CFR 72.212(b)(11)
that states the licensee shall comply
with the terms, conditions, and
specifications of the CoC for TN
NUHOMS® HD dry cask storage system
with DSCs serial numbers DOM–
32PTH–004–C, -005–C,t -007–C, -010–C,
-013–C, -019–C and GBC–32PTH–011–C
at the North Anna Power Station ISFSI.
This exemption is effective upon
issuance.
Dated at Rockville, Maryland, this 12th day
of April 2012.
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17:40 Apr 23, 2012
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For the Nuclear Regulatory Commission.
Douglas Weaver,
Deputy Director, Division of Spent Fuel
Storage and Transportation, Office of Nuclear
Material Safety and Safeguards.
[FR Doc. 2012–9803 Filed 4–23–12; 8:45 am]
BILLING CODE 7590–01–P
NUCLEAR REGULATORY
COMMISSION
[NRC–2012–0002]
Sunshine Act Meeting Noice
AGENCY HOLDING THE MEETINGS: Nuclear
Regulatory Commission.
DATE: Weeks of April 23, 30, May 7, 14,
21, 28, 2012.
PLACE: Commissioners’ Conference
Room, 11555 Rockville Pike, Rockville,
Maryland.
STATUS: Public and Closed.
Week of April 23, 2012
Tuesday, April 24, 2012
9 a.m. Briefing on Part 35 Medical
Events Definitions—Permanent Implant
Brachytherapy (Public Meeting)
(Contact: Michael Fuller, 301–415–
0520).
This meeting will be webcast live at
the Web address—www.nrc.gov.
Week of April 30, 2012—Tentative
Monday, April 30, 2012
9:30 a.m. Briefing on Human Capital
and Equal Employment Opportunity
(EEO) (Public Meeting) (Contact: Kristin
Davis, 301–492–2208).
This meeting will be webcast live at
the Web address—www.nrc.gov.
Week of May 7, 2012—Tentative
24543
This meeting will be webcast live at
the Web address—www.nrc.gov.
The schedule for Commission
meetings is subject to change on short
notice. To verify the status of meetings,
call (recording)—301–415–1292.
Contact person for more information:
Rochelle Bavol, 301–415–1651.
*
*
*
*
*
The NRC Commission Meeting
Schedule can be found on the Internet
at: https://www.nrc.gov/public-involve/
public-meetings/schedule.html.
*
*
*
*
*
The NRC provides reasonable
accommodation to individuals with
disabilities where appropriate. If you
need a reasonable accommodation to
participate in these public meetings, or
need this meeting notice or the
transcript or other information from the
public meetings in another format (e.g.,
braille, large print), please notify Bill
Dosch, Chief, Work Life and Benefits
Branch, at 301–415–6200, TDD: 301–
415–2100, or by email at
william.dosch@nrc.gov. Determinations
on requests for reasonable
accommodation will be made on a caseby-case basis.
*
*
*
*
*
This notice is distributed
electronically to subscribers. If you no
longer wish to receive it, or would like
to be added to the distribution, please
contact the Office of the Secretary,
Washington, DC 20555 (301–415–1969),
or send an email to
darlene.wright@nrc.gov.
Dated: April 19, 2012.
Rochelle C. Bavol,
Policy Coordinator, Office of the Secretary.
[FR Doc. 2012–9970 Filed 4–20–12; 4:15 pm]
BILLING CODE 7590–01–P
Friday, May 11, 2012
9 a.m. Briefing on Potential Medical
Isotope Production Licensing Actions
(Public Meeting) (Contact: Jessie
Quichocho, 301–415–0209).
This meeting will be webcast live at
the Web address—www.nrc.gov.
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
30036; 812–13767]
Week of May 14, 2012—Tentative
Beverly Hills Bancorp Inc.; Notice of
Application
There are no meetings scheduled for
the week of May 14, 2012.
April 18, 2012.
Week of May 21, 2012—Tentative
There are no meetings scheduled for
the week of May 21, 2012.
Week of May 28, 2012—Tentative
Friday, June 1, 2012
9 a.m. Briefing on Results of the
Agency Action Review Meeting (AARM)
(Public Meeting) (Contact: Rani
Franovich, 301–415–1868).
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Securities and Exchange
Commission (the ‘‘Commission’’).
ACTION: Notice of application for an
order under sections 6(c) and 6(e) of the
Investment Company Act of 1940
(‘‘Act’’) for an exemption from all
provisions of the Act, except sections 9,
17(a), 17(d), 17(e), 17(f), 36 through 45,
and 47 through 51 of the Act and the
rules thereunder, modified as discussed
in the application.
AGENCY:
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24544
Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Notices
Summary of Application: The
requested order would exempt the
applicant, Beverly Hills Bancorp Inc.
(‘‘BHBC’’), from certain provisions of
the Act until the earlier of one year from
the date of the requested order or such
time as BHBC would no longer be
required to register as an investment
company under the Act.
Filing Dates: The application was
filed on April 22, 2010, and amended on
October 18, 2010, and November 2,
2011.
Hearing or Notification of Hearing: An
order granting the application will be
issued unless the Commission orders a
hearing. Interested persons may request
a hearing by writing to the
Commission’s Secretary and serving
applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on May 14, 2012 and
should be accompanied by proof of
service on applicants, in the form of an
affidavit or, for lawyers, a certificate of
service. Hearing requests should state
the nature of the writer’s interest, the
reason for the request, and the issues
contested. Persons who wish to be
notified of a hearing may request
notification by writing to the
Commission’s Secretary.
ADDRESSES: Secretary, U.S. Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
Applicant, Post Office Box 8280,
Calabasas, CA 91372.
FOR FURTHER INFORMATION CONTACT:
Emerson S. Davis, Senior Counsel, at
(202) 551–6868, or May Kay Frech,
Branch Chief, at (202) 551–6821
(Division of Investment Management,
Office of Investment Company
Regulation).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
Web site by searching for the file
number, or an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm or by
calling (202) 551–8090.
Applicant’s Representations:
1. BHBC was a bank holding company
that conducted its banking and lending
operations through its wholly-owned
subsidiary First Bank of Beverly Hills, a
California banking corporation (the
‘‘Bank’’). From its incorporation in 1996
until April 24, 2009, the Bank was the
source of substantially all of BHBC’s
revenues and income. The Bank
sustained substantial losses in its real
estate loan and mortgage-backed
securities portfolios, and as of December
31, 2008, it no longer met applicable
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17:40 Apr 23, 2012
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regulatory capital requirements. As a
result, on February 13, 2009, the Federal
Deposit Insurance Corporation (‘‘FDIC’’)
and the California Department of
Financial Institutions (the ‘‘CDFI’’)
issued an order requiring the Bank to
increase its regulatory capital within 60
days. Because the Bank was unable to
increase its regulatory capital within the
specified time period, on April 24, 2009,
the CDFI closed the Bank and the FDIC
was appointed as the Bank’s receiver.
2. BHBC has one class of common
stock outstanding, which it voluntarily
delisted from the NASDAQ Global
Select Market on February 12, 2009. On
February 19, 2009, BHBC deregistered
its common stock under Section 12(g) of
the Securities Exchange Act of 1934, as
amended (the ‘‘Exchange Act’’), and on
March 13, 2009, its reporting obligations
under Section 15(d) of the Exchange Act
were suspended. As such, BHBC is no
longer subject to the reporting
requirements of the Exchange Act and
its common stock is traded on the pink
sheets. As of September 30, 2011, BHBC
had 78 holders of record.
3. BHBC has options outstanding
under two equity incentive plans, the
Amended and Restated 1999 Equity
Participation Plan of Wilshire Financial
Services Group Inc. (the ‘‘1999 Plan’’)
and the 2002 Equity Participation Plan
(the ‘‘2002 Plan,’’ and together with the
1999 Plan, the ‘‘Plans’’). All outstanding
awards under the Plans were granted
prior to the FDIC’s appointment as
receiver for the Bank. As of September
30, 2011, there were options
outstanding under the 1999 Plan to
purchase 32,667 shares of BHBC
common stock, all of which were held
by one director of BHBC.1 As of
September 30, 2011, the only options
outstanding under the 2002 Plan were
options to purchase 137,333 shares of
BHBC common stock held by four
individuals, each of whom is a director
and/or officer of BHBC. BHBC will not
issue any additional awards under the
2002 Plan. In addition, BHBC’s four
directors have stock appreciation rights
(SARs) with respect to 120,000 shares of
common stock.
4. As of September 30, 2011, on a
consolidated basis, for financial
reporting purposes BHBC has assets of
$11.9 million, liabilities of $38.4
million, and a stockholders’ equity of
negative $26.5 million. On a nonconsolidated basis, BHBC’s assets total
approximately $10.3 million, and since
the receivership of the Bank, these
assets have consisted almost exclusively
of checking accounts at commercial
banks and shares of the Vanguard Short1 The
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1999 Plan expired on September 30, 2009.
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Term Investment Grade Fund (Admiral
Shares) (the ‘‘Vanguard Fund’’), which
BHBC has since liquidated and invested
the proceeds in Permitted Securities (as
defined below).
5. BHBC has several direct or indirect
wholly owned subsidiaries, none of
which has any ongoing business or
operations. As of September 30, 2011,
the following assets were held by BHBC
subsidiaries: (i) Wilshire Acquisitions
Corporation (‘‘Wilshire Asquisitions’’)
has assets with a book value of $151,732
consisting of accrued interest and
prepaid expenses related to a subsidiary
trust, (ii) WFC Inc. has assets with a
book value of $377,250 consisting of
approximately 19 small consumer and
residential mortgage loans, cash, and
prepaid expenses, and (iii) BH
Commercial Capital I, Inc. has assets
with a book value of $1,084,799
consisting of two secured commercial
real estate loans (collectively, the
‘‘Subsidiary Assets’’). In addition, BHBC
also either directly or indirectly owns
the common securities of three
subsidiary trusts that were formed in
connection with offerings of trust
preferred securities in which the trust
subsidiaries issued their common
securities to BHBC or Wilshire
Acquisitions and their preferred
securities to third party investors. The
subsidiary trusts then loaned all the
proceeds of the sale of trust preferred
securities to BHBC or Wilshire
Acquisitions in exchange for junior
subordinated debentures (the
‘‘Subordinated Debentures’’). The
subsidiary trusts have no assets other
than the Subordinated Debentures.
6. BHBC’s liabilities consist
principally of $25.8 million of the
Subordinated Debentures issued to its
two direct trust subsidiaries and $10.3
million of Subordinated Debentures
issued to its indirect trust subsidiary. In
the aggregate, interest in an approximate
amount of $900,000 accrues on a yearly
basis pursuant to these three series of
Subordinated Debentures. BHBC states
that there is no public market for the
Subordinated Debentures or the trust
preferred securities. Under the terms of
the Subordinated Debentures, BHBC
may defer interest payments for up to 20
consecutive quarters.2 On January 29,
2009, BHBC elected to exercise this
right and no payments are due under
the Subordinated Debentures until 2014.
7. BHBC states that it and its current
and former directors and officers are
subject to actual and potential
2 During the period when interest payments are
being deferred, interest continues to accrue,
compounding quarterly, at an annual rate equal to
the interest in effect for such period and must be
paid at the end of the deferral period.
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Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Notices
contingent liabilities of uncertain
amounts related to claims associated
with its former operations, as well as
regulatory and stockholder claims in
connection with the failure of the Bank.
When the Bank was closed and put into
receivership with the FDIC, the FDIC
became successor to all of the Bank’s
claims, including claims against BHBC
and the current or former officers and
directors of BHBC and the Bank, for
failure to maintain the net worth of the
Bank, gross negligence and breach of
fiduciary duty. BHBC states that in
addition to any claims made directly
against it, BHBC is subject to
indemnification and expense
obligations in connection with various
actions brought against its current and
former directors, officers, employees or
agents.
8. Since the Bank was placed into
receivership, BHBC has had no active
business or operations. Within several
months of the receivership, BHBC
terminated all employees, and since that
time has paid two consultants on an
hourly basis primarily for
administrative and accounting services.
BHBC does not maintain an office and
is managed by its four member board of
directors, which has considered various
alternatives, including liquidation and
acquisition of an operating business,
while preserving its assets. BHBC states
that because of its financial condition
and contingent liabilities, pursuing
these courses of action has not been
feasible.
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Applicant’s Legal Analysis
1. Section 3(a)(1)(A) of the Act defines
an investment company as any issuer
who ‘‘is or holds itself out as being
engaged primarily * * * in the business
of investing, reinvesting or trading in
securities.’’ Section 3(a)(1)(C) of the Act
further defines an investment company
as an issuer who is engaged in the
business of investing in securities that
have a value in excess of 40% of the
issuer’s total assets (excluding
government securities and cash).
2. Section 6(c) of the Act provides that
the Commission may exempt any person
from any provision of the Act if such
exemption is necessary or appropriate
in the public interest and consistent
with the protection of investors and the
purposes fairly intended by the policy
and provisions of the Act. Section 6(e)
provides that, in connection with any
order exempting an investment
company from any provision of section
7, certain provisions of the Act, as
specified by the Commission, shall
apply to the company and other persons
dealing with the company, as if such
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17:40 Apr 23, 2012
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company were a registered investment
company.
3. BHBC acknowledges that it may be
deemed to fall within one of the Act’s
definitions of an investment company.
Accordingly, BHBC requests an order of
the Commission pursuant to sections
6(c) and 6(e) of the Act exempting it
from all provisions of the Act, subject to
certain exceptions described below.
BHBC requests an exemption until the
earlier of one year from the date of the
requested order or such time as it would
no longer be required to register as an
investment company under the Act.
During the term of the proposed
exemption, BHBC states that it will
comply with sections 9, 17(a), 17(d),
17(e), 17(f), 36 through 45, and 47
through 51 of the Act and the rules
thereunder, subject to certain
modifications described in the
application.
4. BHBC requests exemptive relief to
the extent necessary to permit it to hold
certain types of instruments that may be
considered ‘‘securities’’, as defined in
section 2(a)(36) under the Act, such as
short-term U.S. government securities,
certificates of deposit and deposit
accounts with banks that are insured by
the FDIC, commercial paper rated
A–1/P–1, shares of registered money
market funds, and any instruments that
are eligible for investment by money
market funds consistent with rule 2a–7
under the Act (collectively, ‘‘Permitted
Securities’’) without being required to
register as an investment company
under the Act. BHBC requests this relief
in order to permit it to preserve the
value of its assets for the benefit of its
security holders, and submits that this
relief is necessary and appropriate for
the public interest.
5. In determining whether to grant
relief for a company in an extended
transition period, the following factors
are considered: (a) Whether the failure
of the company to become primarily
engaged in a non-investment business or
excepted business or to liquidate within
one year was due to factors beyond its
control; (b) whether the company’s
officers and employees during that
period tried, in good faith, to effect the
company’s investment of its assets in a
non-investment business or excepted
business or to cause the liquidation of
the company; and (c) whether the
company invested in securities solely to
preserve the value of its assets. BHBC
believes that it meets these criteria.
6. BHBC believes its failure to become
primarily engaged in a non-investment
business or to liquidate within a year
following the receivership of the Bank is
due to factors beyond its control. The
board of directors of BHBC has regularly
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24545
considered the feasibility of liquidating
or engaging in an operating noninvestment business and concluded that
it is not feasible to commence or acquire
a non-investment business or liquidate
as a result of BHBC’s negative net worth
and the uncertainties associated with
potential litigation and regulatory
claims. BHBC states that the contingent
liabilities make it impossible to
liquidate BHBC and distribute its assets
to creditors and make it imprudent to
utilize any substantial part of its assets
in an operating business. BHBC states
that these circumstances are unlikely to
change over the requested one-year
period in light of the nature of the actual
and contingent liabilities. BHBC states
that it has invested its liquid assets
solely to preserve the value of its assets
and has invested only in bank checking
accounts and Permitted Securities after
liquidating the Vanguard Fund. BHBC
does not believe its current ownership
of certain loans acquired prior to its
receivership is inconsistent with its
purpose of preserving the value of its
assets for the benefit of its security
holders. BHBC thus believes that the
public interest will be best served by
permitting it to hold its liquid assets in
Permitted Securities while its liabilities
are resolved.
Applicant’s Conditions
Applicant agrees that the requested
order will be subject to the following
conditions:
1. BHBC will not purchase or
otherwise acquire any securities other
than Permitted Securities, except that
BHBC may acquire equity securities of
an issuer that is not an ‘‘investment
company’’ as defined in section 3(a) of
the Act or is relying on an exclusion
from the definition of ‘‘investment
company’’ under section 3(c) of the Act
other than section 3(c)(1) or 3(c)(7), in
connection with the acquisition of an
operating business as evidenced by a
resolution approved by BHBC’s board of
directors. BHBC may continue to hold
the Subsidiary Assets.
2. BHBC will not hold itself out as
being engaged in the business of
investing, reinvesting, owning, holding,
or trading in securities.
3. BHBC will not make any primary
or secondary public offerings of its
securities, and it will notify its
stockholders that an exemptive order
has been granted pursuant to sections
6(c) and 6(e) of the Act and that BHBC
and other persons, in their transactions
and relations with BHBC, are subject to
sections 9, 17(a), 17(d), 17(e), 17(f), 36
through 45, and 47 through 51 of the
Act, and the rules thereunder, as if
BHBC were a registered investment
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Federal Register / Vol. 77, No. 79 / Tuesday, April 24, 2012 / Notices
company, except as permitted by the
order requested hereby.
4. Notwithstanding sections 17(a) and
17(d) of the Act, an affiliated person (as
defined in section 2(a)(3) of the Act) of
BHBC may engage in a transaction that
otherwise would be prohibited by these
sections with BHBC:
(a) If such proposed transaction is first
approved by a bankruptcy court on the
basis that (i) the terms thereof, including
the consideration to be paid or received,
are reasonable and fair to BHBC, and (ii)
the participation of BHBC in the
proposed transaction will not be on a
basis less advantageous to BHBC than
that of other participants; and
(b) In connection with each such
transaction, BHBC shall inform the
bankruptcy court of: (i) The identity of
all of its affiliated persons who are
parties to, or have a direct or indirect
financial interest in, the transaction; (ii)
the nature of the affiliation; and (iii) the
financial interests of such persons in the
transaction.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–9772 Filed 4–23–12; 8:45 am]
BILLING CODE 8011–01–P
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Sunshine Act Meeting; Notice
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Closed Meeting
on Thursday, April 26, 2012 at 2 p.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (7), 9(B) and (10)
and 17 CFR 200.402(a)(3), (5), (7), 9(ii)
and (10), permit consideration of the
scheduled matters at the Closed
Meeting.
Commissioner Walter, as duty officer,
voted to consider the items listed for the
Closed Meeting in a closed session.
The subject matter of the Closed
Meeting scheduled for Thursday, April
26, 2012 will be:
Institution and settlement of
injunctive actions;
17:40 Apr 23, 2012
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Dated: April 19, 2012.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2012–9933 Filed 4–20–12; 4:15 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66825; File No. SR–ICC–
2012–01]
Self-Regulatory Organizations; ICE
Clear Credit LLC; Order Approving
Proposed Rule To Provide That One
Hundred Percent (100%) of the Initial
Margin Requirement for Client-Related
Positions Cleared in a Clearing
Participant’s Customer Account Origin
May Be Satisfied by a Clearing
Participant Utilizing US Treasuries
April 18, 2012.
SECURITIES AND EXCHANGE
COMMISSION
VerDate Mar<15>2010
Institution and settlement of
administrative proceedings;
Other matters relating to enforcement
proceedings; and
An opinion.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact: The Office of the Secretary at
(202) 551–5400.
I. Introduction
On February 17, 2012, ICE Clear
Credit LLC (‘‘ICC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change SR–ICC–2012–01 pursuant to
Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’).1 The
proposed rule change was published for
comment in the Federal Register on
March 7, 2012.2 The Commission
received no comment letters. For the
reasons discussed below, the
Commission is granting approval of the
proposed rule change.
II. Description
This rule change will allow clearing
participants to satisfy the initial marginrelated liquidity requirements for clientrelated positions cleared in a clearing
participant’s customer account origin by
posting US Treasuries.
The proposed rule changes provide
that one hundred percent (100%) of the
initial margin requirement for clientrelated positions cleared in a clearing
participant’s customer account origin
1 15
U.S.C. 78s(b)(1).
Exchange Act Release No. 34–66500
(March 1, 2012), 77 FR 13678 (March 7, 2012).
2 Securities
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may be satisfied by the clearing
participant utilizing US Treasuries.3
The ICC rules currently provide that
for all accounts at least forty-five
percent (45%) of initial margin must be
posted in US dollar cash. The next
twenty percent (20%) must be posted in
US dollar cash or US Treasuries. The
remaining thirty-five percent (35%)
must be posted in US dollar cash or US
Treasuries or G7 cash.
The proposed rules provide that at
least sixty-five percent (65%) of the
initial margin requirement for clientrelated positions cleared in a clearing
participant’s customer account origin
must be posted in US dollar
denominated assets (US dollar cash
and/or US Treasuries) and the
remaining thirty-five percent (35%)
must be posted in US dollar cash, US
Treasuries, or G7 cash. The proposed
changes will apply only to the initial
margin liquidity requirements
associated with the initial margin
requirement for client-related positions
cleared in a clearing participant’s
customer account origin. The proposed
changes will not apply to the ICC
liquidity requirements for house initial
margin and the guaranty fund.
The proposed rule changes are
intended to facilitate client-related
clearing. Customers of ICC’s clearing
participants have indicated that the
current US dollar cash liquidity
requirement is too restrictive and serves
as a barrier to clearing. The proposed
rule changes are consistent with the
recently promulgated CFTC regulation
39.11(e)(1) that provides that the CFTC’s
‘‘cash’’ liquidity requirement includes
US Treasury obligations. ICC routinely
monitors its potential liquidity needs
and reevaluates its liquidity
requirements to ensure that it has
sufficient intraday liquidity to manage
cash payments in the event of a member
default.4
3 ICC applies haircuts to US Treasuries to mitigate
liquidity risk. The haircuts as of April 1, 2012 are:
1.25% for US Treasuries maturing in less than one
year, 2.5% for US Treasuries maturing in one to five
years, 5.0% for US Treasuries maturing in five to
ten years, and 10.0% for US Treasuries maturing in
more than ten years (available at: https://
www.theice.com/publicdocs/clear_credit/
ICE_Clear_Credit_Collateral_Management.pdf).
4 Currently at least 45% of house initial margin
and the guaranty fund requirements must be posted
in US dollar cash and the ICC contribution to the
guaranty fund is in US dollar cash. Additionally,
ICC requires all members to meet and maintain
their minimum guaranty fund requirement deposit
of $20 million in US dollar cash regardless of the
amount of each member’s total guaranty fund
requirement. In addition, in the event of immediate
liquidity needs in the event of a member’s default,
ICC may borrow (through IntercontinentalExchange,
Inc.) up to an aggregate principal amount of $100
million against IntercontinentalExchange, Inc.’s
senior unsecured revolving credit facility.
E:\FR\FM\24APN1.SGM
24APN1
]]>Agencies
[Federal Register Volume 77, Number 79 (Tuesday, April 24, 2012)]
[Notices]
[Pages 24543-24546]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9772]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 30036; 812-13767]
Beverly Hills Bancorp Inc.; Notice of Application
April 18, 2012.
AGENCY: Securities and Exchange Commission (the ``Commission'').
ACTION: Notice of application for an order under sections 6(c) and 6(e)
of the Investment Company Act of 1940 (``Act'') for an exemption from
all provisions of the Act, except sections 9, 17(a), 17(d), 17(e),
17(f), 36 through 45, and 47 through 51 of the Act and the rules
thereunder, modified as discussed in the application.
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[[Page 24544]]
Summary of Application: The requested order would exempt the
applicant, Beverly Hills Bancorp Inc. (``BHBC''), from certain
provisions of the Act until the earlier of one year from the date of
the requested order or such time as BHBC would no longer be required to
register as an investment company under the Act.
Filing Dates: The application was filed on April 22, 2010, and
amended on October 18, 2010, and November 2, 2011.
Hearing or Notification of Hearing: An order granting the
application will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on May 14, 2012 and should be accompanied by proof of service
on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.
ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549-1090. Applicant, Post Office Box 8280,
Calabasas, CA 91372.
FOR FURTHER INFORMATION CONTACT: Emerson S. Davis, Senior Counsel, at
(202) 551-6868, or May Kay Frech, Branch Chief, at (202) 551-6821
(Division of Investment Management, Office of Investment Company
Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or an applicant
using the Company name box, at https://www.sec.gov/search/search.htm or
by calling (202) 551-8090.
Applicant's Representations:
1. BHBC was a bank holding company that conducted its banking and
lending operations through its wholly-owned subsidiary First Bank of
Beverly Hills, a California banking corporation (the ``Bank''). From
its incorporation in 1996 until April 24, 2009, the Bank was the source
of substantially all of BHBC's revenues and income. The Bank sustained
substantial losses in its real estate loan and mortgage-backed
securities portfolios, and as of December 31, 2008, it no longer met
applicable regulatory capital requirements. As a result, on February
13, 2009, the Federal Deposit Insurance Corporation (``FDIC'') and the
California Department of Financial Institutions (the ``CDFI'') issued
an order requiring the Bank to increase its regulatory capital within
60 days. Because the Bank was unable to increase its regulatory capital
within the specified time period, on April 24, 2009, the CDFI closed
the Bank and the FDIC was appointed as the Bank's receiver.
2. BHBC has one class of common stock outstanding, which it
voluntarily delisted from the NASDAQ Global Select Market on February
12, 2009. On February 19, 2009, BHBC deregistered its common stock
under Section 12(g) of the Securities Exchange Act of 1934, as amended
(the ``Exchange Act''), and on March 13, 2009, its reporting
obligations under Section 15(d) of the Exchange Act were suspended. As
such, BHBC is no longer subject to the reporting requirements of the
Exchange Act and its common stock is traded on the pink sheets. As of
September 30, 2011, BHBC had 78 holders of record.
3. BHBC has options outstanding under two equity incentive plans,
the Amended and Restated 1999 Equity Participation Plan of Wilshire
Financial Services Group Inc. (the ``1999 Plan'') and the 2002 Equity
Participation Plan (the ``2002 Plan,'' and together with the 1999 Plan,
the ``Plans''). All outstanding awards under the Plans were granted
prior to the FDIC's appointment as receiver for the Bank. As of
September 30, 2011, there were options outstanding under the 1999 Plan
to purchase 32,667 shares of BHBC common stock, all of which were held
by one director of BHBC.\1\ As of September 30, 2011, the only options
outstanding under the 2002 Plan were options to purchase 137,333 shares
of BHBC common stock held by four individuals, each of whom is a
director and/or officer of BHBC. BHBC will not issue any additional
awards under the 2002 Plan. In addition, BHBC's four directors have
stock appreciation rights (SARs) with respect to 120,000 shares of
common stock.
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\1\ The 1999 Plan expired on September 30, 2009.
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4. As of September 30, 2011, on a consolidated basis, for financial
reporting purposes BHBC has assets of $11.9 million, liabilities of
$38.4 million, and a stockholders' equity of negative $26.5 million. On
a non-consolidated basis, BHBC's assets total approximately $10.3
million, and since the receivership of the Bank, these assets have
consisted almost exclusively of checking accounts at commercial banks
and shares of the Vanguard Short-Term Investment Grade Fund (Admiral
Shares) (the ``Vanguard Fund''), which BHBC has since liquidated and
invested the proceeds in Permitted Securities (as defined below).
5. BHBC has several direct or indirect wholly owned subsidiaries,
none of which has any ongoing business or operations. As of September
30, 2011, the following assets were held by BHBC subsidiaries: (i)
Wilshire Acquisitions Corporation (``Wilshire Asquisitions'') has
assets with a book value of $151,732 consisting of accrued interest and
prepaid expenses related to a subsidiary trust, (ii) WFC Inc. has
assets with a book value of $377,250 consisting of approximately 19
small consumer and residential mortgage loans, cash, and prepaid
expenses, and (iii) BH Commercial Capital I, Inc. has assets with a
book value of $1,084,799 consisting of two secured commercial real
estate loans (collectively, the ``Subsidiary Assets''). In addition,
BHBC also either directly or indirectly owns the common securities of
three subsidiary trusts that were formed in connection with offerings
of trust preferred securities in which the trust subsidiaries issued
their common securities to BHBC or Wilshire Acquisitions and their
preferred securities to third party investors. The subsidiary trusts
then loaned all the proceeds of the sale of trust preferred securities
to BHBC or Wilshire Acquisitions in exchange for junior subordinated
debentures (the ``Subordinated Debentures''). The subsidiary trusts
have no assets other than the Subordinated Debentures.
6. BHBC's liabilities consist principally of $25.8 million of the
Subordinated Debentures issued to its two direct trust subsidiaries and
$10.3 million of Subordinated Debentures issued to its indirect trust
subsidiary. In the aggregate, interest in an approximate amount of
$900,000 accrues on a yearly basis pursuant to these three series of
Subordinated Debentures. BHBC states that there is no public market for
the Subordinated Debentures or the trust preferred securities. Under
the terms of the Subordinated Debentures, BHBC may defer interest
payments for up to 20 consecutive quarters.\2\ On January 29, 2009,
BHBC elected to exercise this right and no payments are due under the
Subordinated Debentures until 2014.
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\2\ During the period when interest payments are being deferred,
interest continues to accrue, compounding quarterly, at an annual
rate equal to the interest in effect for such period and must be
paid at the end of the deferral period.
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7. BHBC states that it and its current and former directors and
officers are subject to actual and potential
[[Page 24545]]
contingent liabilities of uncertain amounts related to claims
associated with its former operations, as well as regulatory and
stockholder claims in connection with the failure of the Bank. When the
Bank was closed and put into receivership with the FDIC, the FDIC
became successor to all of the Bank's claims, including claims against
BHBC and the current or former officers and directors of BHBC and the
Bank, for failure to maintain the net worth of the Bank, gross
negligence and breach of fiduciary duty. BHBC states that in addition
to any claims made directly against it, BHBC is subject to
indemnification and expense obligations in connection with various
actions brought against its current and former directors, officers,
employees or agents.
8. Since the Bank was placed into receivership, BHBC has had no
active business or operations. Within several months of the
receivership, BHBC terminated all employees, and since that time has
paid two consultants on an hourly basis primarily for administrative
and accounting services. BHBC does not maintain an office and is
managed by its four member board of directors, which has considered
various alternatives, including liquidation and acquisition of an
operating business, while preserving its assets. BHBC states that
because of its financial condition and contingent liabilities, pursuing
these courses of action has not been feasible.
Applicant's Legal Analysis
1. Section 3(a)(1)(A) of the Act defines an investment company as
any issuer who ``is or holds itself out as being engaged primarily * *
* in the business of investing, reinvesting or trading in securities.''
Section 3(a)(1)(C) of the Act further defines an investment company as
an issuer who is engaged in the business of investing in securities
that have a value in excess of 40% of the issuer's total assets
(excluding government securities and cash).
2. Section 6(c) of the Act provides that the Commission may exempt
any person from any provision of the Act if such exemption is necessary
or appropriate in the public interest and consistent with the
protection of investors and the purposes fairly intended by the policy
and provisions of the Act. Section 6(e) provides that, in connection
with any order exempting an investment company from any provision of
section 7, certain provisions of the Act, as specified by the
Commission, shall apply to the company and other persons dealing with
the company, as if such company were a registered investment company.
3. BHBC acknowledges that it may be deemed to fall within one of
the Act's definitions of an investment company. Accordingly, BHBC
requests an order of the Commission pursuant to sections 6(c) and 6(e)
of the Act exempting it from all provisions of the Act, subject to
certain exceptions described below. BHBC requests an exemption until
the earlier of one year from the date of the requested order or such
time as it would no longer be required to register as an investment
company under the Act. During the term of the proposed exemption, BHBC
states that it will comply with sections 9, 17(a), 17(d), 17(e), 17(f),
36 through 45, and 47 through 51 of the Act and the rules thereunder,
subject to certain modifications described in the application.
4. BHBC requests exemptive relief to the extent necessary to permit
it to hold certain types of instruments that may be considered
``securities'', as defined in section 2(a)(36) under the Act, such as
short-term U.S. government securities, certificates of deposit and
deposit accounts with banks that are insured by the FDIC, commercial
paper rated A-1/P-1, shares of registered money market funds, and any
instruments that are eligible for investment by money market funds
consistent with rule 2a-7 under the Act (collectively, ``Permitted
Securities'') without being required to register as an investment
company under the Act. BHBC requests this relief in order to permit it
to preserve the value of its assets for the benefit of its security
holders, and submits that this relief is necessary and appropriate for
the public interest.
5. In determining whether to grant relief for a company in an
extended transition period, the following factors are considered: (a)
Whether the failure of the company to become primarily engaged in a
non-investment business or excepted business or to liquidate within one
year was due to factors beyond its control; (b) whether the company's
officers and employees during that period tried, in good faith, to
effect the company's investment of its assets in a non-investment
business or excepted business or to cause the liquidation of the
company; and (c) whether the company invested in securities solely to
preserve the value of its assets. BHBC believes that it meets these
criteria.
6. BHBC believes its failure to become primarily engaged in a non-
investment business or to liquidate within a year following the
receivership of the Bank is due to factors beyond its control. The
board of directors of BHBC has regularly considered the feasibility of
liquidating or engaging in an operating non-investment business and
concluded that it is not feasible to commence or acquire a non-
investment business or liquidate as a result of BHBC's negative net
worth and the uncertainties associated with potential litigation and
regulatory claims. BHBC states that the contingent liabilities make it
impossible to liquidate BHBC and distribute its assets to creditors and
make it imprudent to utilize any substantial part of its assets in an
operating business. BHBC states that these circumstances are unlikely
to change over the requested one-year period in light of the nature of
the actual and contingent liabilities. BHBC states that it has invested
its liquid assets solely to preserve the value of its assets and has
invested only in bank checking accounts and Permitted Securities after
liquidating the Vanguard Fund. BHBC does not believe its current
ownership of certain loans acquired prior to its receivership is
inconsistent with its purpose of preserving the value of its assets for
the benefit of its security holders. BHBC thus believes that the public
interest will be best served by permitting it to hold its liquid assets
in Permitted Securities while its liabilities are resolved.
Applicant's Conditions
Applicant agrees that the requested order will be subject to the
following conditions:
1. BHBC will not purchase or otherwise acquire any securities other
than Permitted Securities, except that BHBC may acquire equity
securities of an issuer that is not an ``investment company'' as
defined in section 3(a) of the Act or is relying on an exclusion from
the definition of ``investment company'' under section 3(c) of the Act
other than section 3(c)(1) or 3(c)(7), in connection with the
acquisition of an operating business as evidenced by a resolution
approved by BHBC's board of directors. BHBC may continue to hold the
Subsidiary Assets.
2. BHBC will not hold itself out as being engaged in the business
of investing, reinvesting, owning, holding, or trading in securities.
3. BHBC will not make any primary or secondary public offerings of
its securities, and it will notify its stockholders that an exemptive
order has been granted pursuant to sections 6(c) and 6(e) of the Act
and that BHBC and other persons, in their transactions and relations
with BHBC, are subject to sections 9, 17(a), 17(d), 17(e), 17(f), 36
through 45, and 47 through 51 of the Act, and the rules thereunder, as
if BHBC were a registered investment
[[Page 24546]]
company, except as permitted by the order requested hereby.
4. Notwithstanding sections 17(a) and 17(d) of the Act, an
affiliated person (as defined in section 2(a)(3) of the Act) of BHBC
may engage in a transaction that otherwise would be prohibited by these
sections with BHBC:
(a) If such proposed transaction is first approved by a bankruptcy
court on the basis that (i) the terms thereof, including the
consideration to be paid or received, are reasonable and fair to BHBC,
and (ii) the participation of BHBC in the proposed transaction will not
be on a basis less advantageous to BHBC than that of other
participants; and
(b) In connection with each such transaction, BHBC shall inform the
bankruptcy court of: (i) The identity of all of its affiliated persons
who are parties to, or have a direct or indirect financial interest in,
the transaction; (ii) the nature of the affiliation; and (iii) the
financial interests of such persons in the transaction.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-9772 Filed 4-23-12; 8:45 am]
BILLING CODE 8011-01-P
