90-3

September 18, 1990

Dear M ________:

This is in response to your letter of September 17, 1990, confirming our conversation of that date regarding the sharing of office space of two related entities, one of which is our licensee.

The facts, as stated in your letter, are as follows: “The Bank has a licensed representative office in California pursuant to Sections 1725 et. seq. of the California Financial Code. The Bank’s licensed representative in California is Mr. A, an independent contractor, and the Bank’s representative office employs several persons, among them Mr. A. It has been proposed that a separate corporation (“Securities”), which is affiliated with the Bank, will establish a presence in California and become a registered broker-dealer. The proposed arrangement is that the representative office and Securities will share office space, and that one or more of the current employees of the representative office will become co-employees of both the representative office and Securities. To avoid confusing customers, the distinction between these two entities will be maintained in all circumstances. Among other things, separate letterheads and business cards will be maintained, and all customers will be carefully told which entity they are dealing with. As you know, pursuant to California Financial Code Section 1728, a California representative office of a foreign bank can only perform certain limited activities in this state, and it is therefore less likely customers will be confused.”

Based upon the facts as stated above, the State Banking Department will interpose no objection to this arrangement. This position is based upon the representations set forth in your letter and is subject to change in the event of any material modification of the facts and circumstances you described.

Sincerely,

JOHN PAULUS
Deputy Superintendent of Banks
Office of Policy

September 17, 1990

BY FACSIMILE

Mr. John R. Paulus
California State Banking Department
111 Pine Street, Suite 1100
San Francisco, CA 94111

Dear Mr. Paulus:

This letter will confirm our conversation today regarding the representative office of our client, a foreign (other nation) bank (the “Bank”), which has been established in California.

The facts, as we discussed them, are as follows: the Bank has a licensed representative office in California pursuant to Sections 1725 et seq. Of the California Financial Code. The Bank’s licensed representative in California is Mr. A, an independent contractor, and the Bank’s representative office employs several persons, among them Mr. A. It has been proposed that a separate corporation (“Securities”), which is affiliated with the Bank, will establish a presence in California and become a registered California broker-dealer. The proposed arrangement is that the representative office and Securities will share office space, and that one or more of the current employees of the representative office will become co-employees of both the representative office and Securities. To avoid confusing customers, the distinction between these two entities will be maintained in all circumstances. Among other things, separate letterheads and business cards will be maintained, and all customers will be carefully told which entity they are dealing with. As you know, pursuant to California Financial Code Section 1728, a California representative office of a foreign bank can only perform certain limited activities in this State, and it is therefore less likely customers will be confused.

Based on these facts, I understand that the activities of the Bank and Securities will not violate any rules or regulations applicable to the Bank’s representative office, and that so long as the procedures described above are maintained, the State Banking Department will permit this arrangement.

I further understand that your signature below constitutes the acknowledgment and approval of the State Banking Department of the matters set forth in this letter. If you so agree, please execute the acknowledgment where indicated and return the letter to me. Our facsimile number is 986-0320. Because our client wishes to proceed expeditiously, I would appreciate your sending the confirmation letter as soon as reasonably possible. Please call me directly if you have any questions.

 Many thanks for your cooperation.

Very truly yours,

 Acknowledged and agreed:

CALIFORNIA STATE BANKING DEPARTMENT

BY: _____________________
      JOHN R. PAULUS