Security Pacific May Sell Part of Securities Units

Majority stakes in three foreign securities affiliates of Security Pacific Corp. may be sold to their managements, the Los Angeles bank holding company said Wednesday. Security Pacific Corp., parent of Security Pacific National Bank, said the plan is under consideration in part because the company believes that giving senior management of the securities firms greater control over operations would make the entities more effective.

Security Pacific has been reviewing since May various plans for its foreign securities operations to make them more competitive. The bank said its review, called the Alliance Project, is being made in the wake of the deregulation of financial markets overseas and also to increase access for its customers in overseas securities markets.

The subsidiaries involved are Hoare Govett in London, a wholly-owned Security Pacific subsidiary; Burns Fry Ltd. in Toronto, which is 30% owned by Security Pacific; and McIntosh Securities Ltd. in Sydney, Australia, which is 15% owned by Security Pacific, an interest it acquired through the purchase of Hoare Govett.

Restricted by Regulation K

Security Pacific said that the plan to sell the stakes is only one of several being considered and that any such plan is likely to require reviews by federal and foreign regulators. Under the plan, a majority stake would be sold to the securities firms’ managements, with Security Pacific holding a minority position through a new holding company.

Because of their affiliation with Security Pacific, the securities firms are restricted by the Federal Reserve’s Regulation K from holding large stock positions and also have restrictions on underwriting stock offerings. Federal laws such as Regulation K and the Glass-Steagall Act restrict bank activities in the securities business, although those barriers are eroding.

Nevertheless, a spokesman said Security Pacific believes that the regulations still would apply, even after majority control passes to management.