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Certificats de coupons payés par la Société Générale et par la Banque de Coce 5992 [THE LIBRARY OF CONGRESS, Congressional Research Service, Translation (French)] SOCIETE INTERPROFESSIONNELLE POUR LA COMPENSATION DES VALEURS MOBILIERES (Interprofessional Company for Compensation of Stocks and Shares) SICOVAM (Corporation with 1,200,000 Francs Capital) Senator LEE METCALF, PARIS, August 7, 1974. Chairman of the Subcommittee on Budgeting, Management and Expenditures, Committee on Government Operations, U.S. Senate, Washington, D.C. DEAR SIR: Thank you so much for your letter of July 22, 1974 which I found highly interesting. I am very happy to submit to you all the information about our company. The literature enclosed contains several annexes and also information about SICOVAM, the legislative texts in French on the operation of our organization, the statutes and the general regulations governing SICOVAM as well as a list of our participating members. A study of the papers will show you that SICOVAM is an ordinary law corporation whose statutes and general regulations, however, are submitted to the French Ministry of Economy and Finance for approval. In its role as a central trustee, SICOVAM offers to its participating members current accounts of stocks and shares thanks to which all deliveries made or not after stock exchange transactions are carried out by simple transfers that are recorded by SICOVAM; no actual movement of shares takes place. Likewise, SICOVAM takes an active part in the field of French and foreign bearer shares as well as foreign registered shares of which there are at present 41 American shares. Inasmuch as they are in particular registered foreign shares that are dealt with by Articles 24 through 30 of the General Regulations (pp. 11-15 in Annex 5), SICOVAM acts as a nominee according to a technique related to the one used in Great Britain and the U.S. The shares owned by French shareholders are entered in the name of SICOVAM which acts in this particular case as a representative of the actual owners. As for institutional investors and natural persons on whose behalf our Organization is holding the shares, I am, unfortunately, not in a position to answer the question raised by you in the last paragraph of your letter. As a matter of fact, SICOVAM only opens current share accounts for its only adherents-banks, stock brokers and financial institutions-and has absolutely no knowledge of the names of the real owners of the stocks and shares it holds. Thus, the shares of the International Telephone and Telegraph Corporation and the American Telephone and Telegraph Co. entered in the name of SICOVAM are credited to the accounts of their adherents who only know the identity of their real owner clients. Furthermore, an absolutely identical situation exists in the case of French shares and SICOVAM would be unable to answer a question on shares similar to yours if it were asked, for example, by a French company or French authorities. At any moment, for each share that is accepted in our operations, we only know the total number of shares credited to the account of each of our adherents. Any information revelant to this, apparently, would be of no use to you inasmuch as it would not contain any detailed data on the institutional investors and natural persons on whose behalf the shares have been deposited with us by our adherents. Moreover, if you asked me to give you an information of this sort, I, regrettably, would have to say that I do not consider myself authorized to do it. As a matter of fact, as you can see from the enclosed list of our 234 present adherents, SICOVAM represents stock brokers, banks and financial institutions. Therefore, it is obliged to strictly guard professional secret and absolutely adhere to the rule to never reveal to anybody the balances of accounts of its adherents. This principle, applicable to all French and foreign shares, is applied to all, that is, private persons, French companies and even administrations with the exception, however, of the French law courts. If I am not mistaken, I believe your Subcommittee is particularly interested in one field, namely, that of SICOVAM's participation in the general meetings of the shareholders. Allow me to give you some more detailed information in that respect: For French and foreign companies whose shares are held by the shareholders, SICOVAM will never intervene and would, by the way, have no means of doing so if it even so desired. As for companies with registered shares, SICOVAM, as stated in Article 29 of its General Regulations (Annex No. 5, end of page 12), "... shall guarantee the representation of shares at the general meetings but shall only exercise the right to vote in accordance with the instructions it receives from its adherents that are acting on behalf of the holders of certificates of registration whose shares have been entered in the name of SICOVAM or those of eligible persons." In practice and speaking only of American companies-SICOVAM at general meeting informs its adherents of the agenda which it learns from the company concerned. The adherents contact their clients and actual shareholders requesting them for voting instructions. Of course, the shareholders are free to give instructions or they may abstain from doing so; likewise, they may vote for or against proposed resolutions. Then the adherents transmit to SICOVAM the total number of their clients voting instructions, that is, the numbers of their clients that voted for or against each resolution. SICOVAM then prepares a synthesis of all its instructions by isolating: The total number of shares that frequently will be lower than the number of shares entered in its name, The number of votes for and against the resolutions. SICOVAM will then put the results of the synthesis in its global power formula ("Proxy") which it communicates to the American company. Thus, SICOVAM's participation in the general meetings of the American companies will exactly reflect the will of the French shareholders. I regret very much, dear Senator, that I am not able to reply to your inquiry concerning the shareholders of the American Telephone and Telegraph Co. and the International Telephone and Telegraph Corporation; as I pointed out to you in my letter, I did my best to bring out the most characteristic features of our company's activities. Please be assured that I am perfectly willing to reply to any additional information you may wish to obtain. While expressing to you my apologies for not having been able to completely satisfy you, I kindly ask you to accept this expression of my highest regards. Enclosures. Translated by Paul Vidal. ROBERT DE SCHIETERE, President. Mr. VIC REINEMER, FIRST NATIONAL CITY BANK, Staff Director, Senate Subcommittee on Budgeting, Management and Expenditures, Russell Building, Washington, D.C. DEAR VIC: We have obtained answers to some of your questions about foreign depositories: 1. Sicovam's Valeurs Etrangers-This list, sent earlier, is of securities actually on deposit. The exception is where Sicovam is a participant in a foreign depository itself (e.g., CIK in Belgium), and that entity is authorized to hold the securities physically. The list is published periodically, and the most recent (July 1974) is enclosed. (Note that U.S. stocks are listed on page 3.) If a security becomes eligible between lists, a notice is circulated. The list of Cedel's Eurobonds also would depict securities actually on deposit, although it is possible that a holder of all of the remaining outstanding securities of an issue could withdraw and personally safekeep them. I am hot aware that Cedel holds shares-if they do they would be Euro bearer shares-although I understand they plan to. 2. Eligibility-For Cedel and Euroclear, I believe the underwriter is responsible for securing clearance. For example, for the recent Singer fixed rate three year Euro-issue, Goldman Sachs would make application to Cedel, and once secured would include this information and an identifying number in the offering telex. For Sicovam, I believe all French shares are eligible. For foreign shares, the sponsoring bank introduces a file of information including specimens of securities of the Stock Exchange for listing. Assuming approval, the Board of Directors of Sicovam would consider the case, but prior approval by the Exchange always results in acceptance by Sicovam. 3. Sicovam's membership-A list of January 1973, updated in ink, is enclosed. Also enclosed is a red booklet, dated 1970, on the German depository Deutscher Auslandskassenverein. Fortunately, this document is written in English as well as French and German; we hope it will be of interest. Their 1973 annual report (in German) is also included. Sincerely, CHARLES W. BISSET, Vice President, First National City Bank. [The materials summarized above are retained in the committee files.] "REGULATION OF BANK TRUST DEPARTMENT ACTIVITIES," BY MARTIN E. LYBECKER Name: Martin E. Lybecker. RÉSUMÉ Address: 2447 North Powhatan Street, Arlington, Va. Marital status: Married; no children. Present employment: Attorney, Office of Chief Counsel, Division of Investment Management Regulation, Securities and Exchange Commission, Washington, D.C. Adjunct Professor of Law, Georgetown University Law Center, Washington, D.C. Legal education: Graduate Fellow, Center for the Study of Financial Institutions and the Securities Markets, 1971-72. University of Pennsylvania School of Law, LL.M. degree, May 1973. New York University School of Law, Graduate Division, LL.M. (in Taxation) degree, June 1971. University of Washington School of Law, J.D. degree, June 1970. Class Standing: top quarter. American Jurisprudence Awards: Securities Regulation, Race Relations Law, Phi Delta Phi Fraternity. Member, Washington State and District of Columbia Bars. Prelegal education: University of Washington School of Business, B.B.A. degree, June 1967. Major: Accounting; Minor: History. Class Standing: top quarter. Beta Alpha Psi (Accounting Honorary) Fraternity. Legal, academic, and business experience: Associate Attorney, part-time, Morgan, Lewis & Bockius, Philadelphia, Pa., 1971-72. Associate Attorney, Bogle, Gates, Dobrin, Wakefield & Long, Seattle, Wash., Summer 1971. Lecturer on Corporate Financial Accounting, Department of Accounting, University of Washington, 1967-70. Research Assistant, Accounting Research Division, American Institute of CPAS (AICPA), Summers of 1968, 1969, 1970: Transnational Reporting to Investors, Professor Gerhard G. Mueller; and Accounting for Working Capital, Professor Loyd C. Heath. Lecturer, CPA Coaching Series-1970, 1971, University of Washington: Accounting for Stockholders' Equity; Partnerships; Business Law. Law Clerk, part-time, Ashley, Foster, Pepper & Riviera, Seattle, Wash., 1969-70. Articles, speeches, and testimony: "Regulation of Bank Trust Department Investment Activities," 82 Yale L.J. 977 (April 1973) reprinted in Commercial Banking 1974 at 181 (PLI April 1974). " 'Bank Investment Activities and the Securities Laws," Address before the Banking, Corporation, and Business Law Section of the New York State Bar Association, Syracuse, New York, October 12, 1973, published in that Section's Addresses at Fall Meeting at 33. 'Regulation of Bank Trust Department Investment Activities: Seven Gaps, Eight Remedies," 90 Banking L.J. 912 (November-December 1973) (Part I), 91 Banking L.J. 6 (January 1974) (Part II); reprinted in 2 Sec. Req. L.J. 122 (Summer 1974) (Part I), 2 Sec. Reg. L.J. (Fall 1974) (Part II). 37-733 74 pt. 3 31 |