The eight major North American banks that own Multinet International, the securities clearing house, have moved to obtain a bank charter that officials say will result in reduced risk and cost savings.

Multinet, through its owners, which include Chase Manhattan Corp., First Chicago Corp., and Bank of Montreal, has applied to the Federal Reserve and to the New York State Banking Committee for a charter to gain the benefits of being a regulated financial institution, officials said.

Protection Against Losses

As a bank, the clearing house will enjoy greater protection against losses should a participating bank go bankrupt. U.S. regulators allow banks' obligations to one another to be offset when one goes bankrupt, a benefit not necessarily extended to corporations.

Multinet International Bank -- the proposed name -- will operate as a foreign exchange transactions clearing house. The bank will be run by International Clearing Systems Inc., a subsidiary of Options Clearing Corp.

The founding banks have applied to become shareholders. Multinet also is seeking membership to the Federal Reserve System and access to Fedwire and the treasury book system. The application is currently under review.

Chase Will Be a Client

Eshagh Shaoul, vice president and credit executive for global risk management with Chase, expected the money-center bank to immediately start using the clearing house for its 2,500 daily trades once Multinet obtains its charter.

"The normal review process is about six months," Mr. Shaoul said."We have hoped that it be quicker since we've been working with the Fed and with the central bank of Canada."

Mr. Shaoul added that Chase, in anticipation of the clearing house's start, "has already developed its own software that would flag a certain percentage of trades and send them off to Multinet," Mr. Shaoul said.

Once chartered, Multinet expects to provide multilateral netting early in 1995, offering participating banks cost savings by cutting the number of transactions involved.

Reducing Transactions

Transactions cleared through multilateral nettings reduce the total number of transactions that are performed between banks with-branches in several different countries. Transactions arc settled with the clearing house on a net-funds-basis for each currency.

Multinet, formerly known as the North American Clearing House Organization, has been working to develop multilateral netting since 1987, and has provided bilateral netting for foreign exchange transactions since 1992.

The netting services will be based on software called Valunet, which was developed by Options Clearing Corp. and by the International Clearing Systems Inc.

The five other banks that own the clearing house are Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Matinal Bank of Canada, Royal Bank of Canada, and Toronto Dominion Bank.

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