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I I I I I I I I I I DH iS Review July 8 1985 Senator D'Amato introduces "one share/one vote" proposal Senate Banking Securities Subcommittee Chairman AIfonse D'Amato (R-NY.) has introduced a bill that would prohibit registration on a national securities exchange of any common stock which is nonvoting or carries dis- proportionate voting rights. The "one share/one vote" requirement would also bpply to common stock of companies listed on the NASDAQ National Market System. The proposal would not prohibit the continued registration of common stock carrying disproportionate voting rights, if the stock: · Was admitted to listed trading on a national securities exchange or quoted on NASDAQ prior to June 17, 1985 · Remains continuously listed on such exchange, and · Meets the current minimum voting standards for original listing on the American Stock Exchange 13y June 17, 1987. The bill is designed primarily to prevent a defensive tactic, considered by certain target companies, whereby a new class of common stock is issued to a sympathetic group to thwart a hostile takeover attempt. Representative John Dingell (D-Mich.), Chairman of the House Energy and Commerce Committee, has introduced a companion bill in the House. FDIC to allow direct real estate and insurance activities by banks The FDIC has proposed a revised rule that would permit all FDIC-in- sured banks to engage in real estate and insurance activities directly, as well as through separate "bona fide" subsidiaries. An earlier proposal would have permitted such activities only through separate subsidiaries. But, under the revised rule, a bank meeting the minimum capital requirement could: · Directly engage in real estate development if the aggregate invest- ments do not exceed 50% of primary capital, and no more than 10% is invested in a single project. Investments in excess of these limits would be permitted if conducted by a bona fide subsidiary. · Underwrite life insurance and annuities through a department of the bank ii certain safety precautions were required by the appropriate state or Federal agency that authorizes the underwriting by the bank. Safety precautions that would have to be required include: (1) assets, liabilities and expenses as well as the related accounting records of the insurance department must be separate and distinct from those of other bank operations, (2) assets of other departments of the bank could not be used to satisfy obligations of the insurance department, and (3) insurance department investment standards must not be less than bank requirements. Comments on the proposed rule should be submitted to the FDIC by July 22.