STAND. COM. REP. NO. 1395

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 664
                                        H.D. 1
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred H.B. No. 664, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO REQUIRED RESERVES FOR A
     DEPOSITORY FINANCIAL SERVICES LOAN COMPANY,"

begs leave to report as follows:

     The purpose of this measure is to allow depository financial
services loan companies to hold up to a quarter of their total
reserves in securities listed on the National Market system of
the National Association of Securities Dealers Automated
Quotation (NASDAQ) System stock market.

     The Commissioner of Financial Institutions, though not
present at the hearing, submitted testimony expressing no
opposition to the bill.  The National Association of Securities
Dealers and the Hawaii Financial Services Association presented
testimony in support of the measure. 

     Your Committee finds that NASDAQ is the fastest growing
stock market in the United States, ranks second among the world's
securities markets in dollar volume, and has a total market value
exceeding $2.1 trillion.  The NASDAQ stock market lists nearly
5,400 companies and trades more shares per day than any other
major American market.  The listing requirements for the NASDAQ
National Market exceed those of the American Stock Exchange and
are similar to the New York Stock Exchange.


 
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                                   STAND. COM. REP. NO. 1395
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     This measure allows depository financial services loan
companies (FLSCs) to hold up to twenty-five per cent of their
total reserves in securities listed on the NASDAQ National
Market, the New York or the American stock exchanges.  Your
Committee finds that this measure gives FSLCs greater flexibility
in managing their reserves without compromising consumer
protection. 

     Your Committee has amended this measure by making technical,
nonsubstantive changes. 

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of H.B. No. 664, H.D. 1, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 664, H.D. 1, S.D. 1, and be placed on the
calendar for Third Reading.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Commerce and
                                   Consumer Protection,



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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