STAND. COM. REP. NO. 568

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 776
                                        




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 S.B. No. 776 entitled: 

     "A BILL FOR AN ACT RELATING TO FINANCIAL SERVICES LOAN
     COMPANIES,"

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

     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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     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. 

     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 S.B. No. 776 and recommends that it pass Second
Reading 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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