The most common form of a Master Services Agreement for Derivatives is an International Swap Dealer Association Master Agreement. 86 FR 28247, May 26, 2021, unless otherwise noted. (10) Any collateral posted by the counterparty is a permissible investment for Federal credit unions and is valued daily by an independent third party along with the value of the option; (11) The aggregate amount of equity-linked member share certificates does not exceed 50 percent of the Federal credit union's net worth; (12) The terms of the share certificate include a guarantee that there can be no loss of principal to the member regardless of changes in the value of the option unless the certificate is redeemed prior to maturity; and. (a) Regular way settlement and delivery versus payment basis. (d) Collateralized mortgage obligation/real estate mortgage investment conduit. (2) The Federal credit union has entered into signed contracts with all approved counterparties. (d) A Federal credit union must obtain a report from its investment adviser at least monthly that details the investments under the adviser's control and their performance. 226 ), as an independent agency in the executive branch of the Federal Government. (a) Except as provided in paragraph (b) of this section, a Federal credit union must retain discretionary control over its purchase and sale of investments. or is a depository institution whose broker-dealer activities are regulated by a Federal or State regulatory agency. Industry-recognized information provider means an organization that obtains compensation by providing information to investors and receives no compensation for the purchase or sale of investments. federal housing finance agency . Regional Director means an NCUA Regional Director or the Director of the Office of National Examinations and Supervision. Eurodollar deposit means a U.S. dollar-denominated deposit in a foreign branch of a United States depository institution. 1757(7), 1757(8), 1757(15), which list those securities, deposits, and other obligations in which a Federal credit union may invest. 1757(7), 1757(8), 1757(14) and 1757(15). consumer financial protection bureau . Economic Effectiveness means the extent to which a Derivatives transaction results in offsetting changes in the Interest Rate Risk that the transaction was, and is, intended to provide. A Federal credit union may purchase shares or deposits in a corporate credit union, except where the NCUA Board has notified it that the corporate credit union is not operating in compliance with part 704 of this chapter. A Federal credit union that at any time, experiences a change in negative condition such that it no longer meets the requirements of paragraph (a) of this section or renders its approved application inaccurate must immediately: (i) Cease entering into any new Derivatives; and. (c) A third-party seeking approval of an investment pilot program must submit a request to the Director of the Office of Capital Markets and Planning that addresses the following items: (1) A complete description of the activities with specific examples of how a credit union will conduct and account for them, and how they will benefit a Federal credit union; (2) A description of any risks to a Federal credit union from participating in the program; and. (c) During this period, however, the Federal credit union may terminate existing Derivative transactions. 703.20 Request for additional authority. Reports required by this section must, at a minimum, be retained in accordance with the requirements in Appendix A to part 749. (3) Qualified Derivatives personnel. National Credit Union Administration The National Credit Union Administration (NCUA) was established by act of March 10, 1970 ( 12 U.S.C. At a minimum, the reports required in paragraphs (a) and (b) of this section must include: (1) Identification of any areas of noncompliance with any provision of this subpart or the Federal credit union's policies, and the planned remediation of such noncompliance; (2) An itemization of the Federal credit union's individual transactions subject to this subpart, the current values of such transactions, and each individual transaction's intended use for Interest Rate Risk mitigation; and. (3) The Federal credit union documents the specific uses of External Service Providers in its policies and procedures, as described in 703.106(c) of this subpart. 80b); and. Non-cleared means transactions that do not go through a Derivatives Clearing Organization. The Federal credit union should consider current financial data, annual reports, external assessments of creditworthiness, relevant disclosure documents, and other sources of financial information. It may determine fair value by obtaining a price quotation on the security from an industry-recognized information provider, a broker-dealer, or a safekeeper. (c) A Federal credit union must obtain and reconcile monthly a statement of purchased investments and repurchase collateral held in safekeeping. (g) European financial options contract. (a) At least monthly, a Federal credit union must prepare a written report setting forth, for each security held, the fair value and dollar change since the prior month-end, with summary information for the entire portfolio. Glossary Policies, Procedures, and Limits Key oversight and management processes are typically set forth in policies. 80a). 10/30/19. 12 cfr parts 722 and 741 . information or personal data. If you work for a Federal agency, use this drafting Any Federal credit union engaging in Derivative transactions pursuant to this subpart must obtain an annual financial statement audit, as defined in 715.2(d) of this chapter, and be compliant with GAAP for all Derivatives-related accounting and reporting; (4) Collateral management review. 703.13 Permissible investment activities. If the Federal credit union has an investment-related committee, then each member of the committee must receive copies of the reports, and each member of the board of directors must receive a summary of the information in the reports. Domestic interest rates means interest rates derived in the United States and are U.S. dollar-denominated. Learn more about the NCUA at www.ncua.gov. Yankee dollar deposit means a deposit in a United States branch of a foreign bank licensed to do business in the State in which it is located, or a deposit in a State-chartered, foreign controlled bank. A credit (or negative) deposit account balance is an overdrawn position on a credit union's deposit account. The holder of an exchangeable CMO may pay a fee and take delivery of the underlying classes of the CMO. (b) Scope. (3) Positive change in condition for a Federal credit union subject to paragraph (b) of this section. Staff must be qualified to undertake or oversee Derivative trade executions; and. European financial options contract means an option that can be exercised only on its expiration date. (a) Under the investment pilot program, NCUA will permit a limited number of Federal credit unions to engage in investment activities prohibited by this part but permitted by the Act. Derivative means a financial contract that derives its value from the value and performance of some other underlying financial instrument or variable, such as an index or interest rate. result, it may not include the most recent changes applied to the CFR. Effective Date: 03/26/2021 Document Type: Rule Document Citation: 86 FR 11098 Page: 11098-11102 (5 pages) CFR: 12 CFR 745 RIN: 3133-AF11 Document Number: 2021-03671 Document Details Document Statistics Page views: 1,247 as of 05/31/2023 at 2:15 am EDT A Federal credit union that does not meet the requirements of paragraphs (a)(1) and/or (2) of this section must obtain approval before engaging in Derivatives under this subpart from its applicable Regional Director, by submitting an application, that, at a minimum, includes the following: (1) An Interest Rate Risk mitigation plan that shows how Derivatives are one aspect of the Federal credit union's overall Interest Rate Risk mitigation strategy, and an analysis showing how the Federal credit union will use Derivatives in conjunction with other on-balance sheet instruments and strategies to effectively manage its Interest Rate Risk; (2) A list of the Derivatives products and characteristics of such products the Federal credit union is planning to use; (3) Draft policies and procedures that the Federal credit union has prepared in accordance with 703.106; (4) A description of how the Federal credit union plans to acquire, employ, and/or create the resources, policies, processes, systems, internal controls, modeling, experience, and competencies to meet the requirements of this subpart. (2) For Non-cleared Derivative transactions: Swap Dealers that are current registrants of the CFTC. 68 FR 32960, June 3, 2003, unless otherwise noted. [68 FR 32960, June 3, 2003, as amended at 69 FR 39831, July 1, 2004; 71 FR 76124, Dec. 20, 2006; 75 FR 64826, Oct. 20, 2010; 77 FR 31991, May 31, 2012; 77 FR 74110, Dec. 13, 2012; 78 FR 13213 Feb. 27, 2013; 79 FR 5241, Jan. 31, 2014; 80 FR 66722, Oct. 29, 2015; 81 FR 17602, Mar. (3) At least monthly, the Federal credit union must give its board of directors or investment-related committee a written report listing all purchase and sale transactions of trading securities and the resulting gain or loss on an individual basis. Swap Dealer has the meaning as defined by the CFTC in 17 CFR 1.3. (i) Zero-coupon investments. (b) At least quarterly, a Federal credit union must prepare a written report setting forth the sum of the fair values of all fixed and variable rate securities held that have one or more of the following features: (c) Where the amount calculated in paragraph (b) of this section is greater than a Federal credit union's net worth, the report described in that paragraph must provide a reasonable and supportable estimate of the potential impact, in percentage and dollar terms, of an immediate and sustained parallel shift in market interest rates of plus and minus 300 basis points on: (1) The fair value of each security in the Federal credit union's portfolio; (2) The fair value of the Federal credit union's portfolio as a whole; and. Notification of any noncompliance as part of the Derivatives management report required in paragraph (c)(1) of this section must be submitted to the applicable Regional Director immediately after it has been submitted to the Federal credit union's board of directors. Asset Management and Assistance Center. (b) The requirement of paragraph (a) of this section does not apply to shares and deposits that are securities. A Federal credit union may enter into a borrowing repurchase transaction so long as: (1) The transaction meets the requirements of paragraph (c) of this section; (2) Any cash the Federal credit union receives is subject to the borrowing limit specified in Section 107(9) of the Act, and any investments the Federal credit union purchases with that cash are permissible for Federal credit unions; and. (3) A comprehensive view of the Federal credit union's risk reports, including, but not limited to, Interest Rate Risk calculations with details of the transactions subject to this subpart. switch to eCFR drafting site. (d) Annually, the Federal credit union must analyze the ability of the safekeeper to fulfill its custodial responsibilities, as evidenced by capital strength, liquidity, and operating results. national credit union administration . A Federal credit union may purchase and hold a municipal security, as defined in section 107(7)(K) of the Act, only if it conducts and documents an analysis that reasonably concludes the security is at least investment grade. Except as provided in 741.219, this rule does not apply to federally insured, state-chartered credit unions. (c) Comprehensive Derivatives management report. You can learn more about the process The eCFR is displayed with paragraphs split and indented to follow If you have comments or suggestions on how to improve the www.ecfr.gov website or have questions about using www.ecfr.gov, please choose the 'Website Feedback' button below. We encourage you to read the NCUA's, Federal Consumer Financial Protection Guide, Compliance Management Systems and Compliance Risk, Homeowners Protection Act (PMI Cancellation Act), Real Estate Settlement Procedures Act (Regulation X), Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) (Regulation G), Small Dollar Lending and Payday Alternative Loans, Federal Fair Lending Regulations and Statutes, Equal Credit Opportunity Act (Regulation B), Home Mortgage Disclosure Act (Regulation C), Electronic Fund Transfer Act (Regulation E), Expedited Funds Availability Act (Regulation CC), Garnishment of Accounts Containing Federal Benefit Payments, Truth in Savings Act (NCUA Rules & Regulations Part 707), Other Regulations, Rules, Policies, and Statutes, Privacy of Consumer Financial Information (Regulation P), Unfair, Deceptive, or Abusive Acts or Practices (UDAAP), Electronic Signatures in Global and National Commerce Act (E-Sign Act). Federal credit unions with assets less than $10,000,000 are encouraged to do the same, but are not required to do so. The NCUA works to protect credit union members and consumers, raise awareness of potential frauds, facilitate access to affordable financial services, and educate consumers on the importance of savings and how they can improve their financial well-being. contact the publishing agency. Email: amacmail@ncua.gov. These policies may be part of a broader, asset-liability management policy. Staff must be qualified to understand and oversee appropriate accounting and financial reporting for Derivatives in accordance GAAP; (iii) Derivatives execution and oversight. 78c(a)(41) and the definition of commercial mortgage related security as defined in 703.2 of this part; (3) The CMRS's underlying pool of loans contains more than 50 loans with no one loan representing more than 10 percent of the pool; and. National Credit Union Administration Dates: The final rule is effective March 26, 2021. The NCUA is a federal agency created by Congress to regulate credit unions and insure your money. Choosing an item from (b) A federal credit union may hold a zero-coupon investment with a maturity greater than 10 years, a borrowing repurchase transaction in which the investment matures at any time later than the maturity of the borrowing, or CMRS that cause the credit union's aggregate amount of CMRS from issuers other than government-sponsored enterprises to exceed 25% of its net worth, in each case if it purchased the investment or entered the transaction under the Regulatory Flexibility Program before July 2, 2012. [68 FR 32960, June 3, 2003, as amended at 77 FR 31991, May 31, 2012]. (c) If a Federal credit union does not have an investment-related committee, then each member of its board of directors must receive a copy of the report described in paragraph (a) of this section. Discretionary control over investments and investment advisers. rin 3064-ae68 . (a) Subject to safety and soundness considerations, a Federal credit union may hold a CMO/REMIC residual, stripped mortgage-backed securities, or zero coupon security with a maturity greater than 10 years, if it purchased the investment: (2) On or after December 2, 1991, but before January 1, 1998, if for the purpose of reducing interest rate risk and if the Federal credit union meets the following: (i) The Federal credit union has a monitoring and reporting system in place that provides the documentation necessary to evaluate the expected and actual performance of the investment under different interest rate scenarios; (ii) The Federal credit union uses the monitoring and reporting system to conduct and document an analysis that shows, before purchase, that the proposed investment will reduce its interest rate risk; (iii) After purchase, the Federal credit union evaluates the investment at least quarterly to determine whether or not it actually has reduced the interest rate risk; and. (a) Purpose. The Office of the Federal Register publishes documents on behalf of Federal agencies but does not have any authority over their programs. At least quarterly, a Federal credit union's Senior Executive Officers must deliver a comprehensive Derivatives report, as described in paragraph (c) of this section to the Federal credit union's board of directors. (3) Before transacting business with an investment adviser, a Federal credit union must analyze his or her background and information available from State or Federal securities regulators, including any enforcement actions against the adviser, associated personnel, and the firm for which the adviser works. (c) A Federal credit union may not compensate an investment adviser with discretionary control over the purchase and sale of investments on a per transaction basis or based on capital gains, capital appreciation, net income, performance relative to an index, or any other incentive basis. The NCUA protects the safety and soundness of the credit union system by identifying, monitoring and reducing risks to the National Credit Union Share Insurance Fund. The National Credit Union Administration's (NCUA) Share Insurance Estimator lets consumers, credit unions, and their members know how its share insurance rules apply to member share accountswhat's insured and what portion (if any) exceeds coverage limits. Small business related security means a security as defined in section 3(a)(53) of the securities Exchange Act of 1934 (15 U.S.C. (b) Application. To enter into Derivative transactions under this subpart, a Federal credit union must: (a) Have an executed Master Services Agreement with a Counterparty. NCUA regulation part 703, Investment and Deposit Activities, identifies investments and deposit activities permissible for FCUs under the FCU Act and prescribes certain requirements governing those investment and deposit activities. If the regional director does not notify the credit union of the action taken on its request within 60 calendar days of the receipt of the request or the receipt of additional requested supporting information, whichever occurs later, the credit union may proceed with its proposed investment or investment activity. rin 2590 . The NCUAs economists and analysts compile data on the credit union systems financial performance, merger activity, changes in credit union chartering and fields of membership, as well as broader economic trends affecting credit unions. Additionally, part 703 identifies and prohibits certain investments and deposit activities. If you would like to comment on the current content, please use the 'Content Feedback' button below for instructions on contacting the issuing agency. A Federal credit union has not delegated discretionary control to an investment adviser when the Federal credit union reviews all recommendations from investment advisers and is required to authorize a recommended purchase or sale transaction before its execution. (b) Any safekeeper used by a Federal credit union must be regulated and supervised by either the Securities and Exchange Commission, a Federal or State depository institution regulatory agency, or a State trust company regulatory agency. (ii) Notify the applicable Regional Director. It is not an official legal edition of the CFR. developer resources. The following definitions apply to this part: Adjusted trading means selling an investment to a counterparty at a price above its current fair value and simultaneously purchasing or committing to purchase from the counterparty another investment at a price above its current fair value. The National Credit Union Administration (NCUA) is the independent agency that administers the NCUSIF. docket no. 49 CFR 172.101 (a) Variable rate investment. Independent qualified agent means an agent independent of an investment repurchase counterparty that does not receive a transaction fee from the counterparty and has at least two years experience assessing the value of mortgage loans. A Federal credit union may consider any or all of the following factors, to the extent appropriate, with respect to the credit risk of a security: Credit spreads; securities-related research; internal or external credit risk assessments; default statistics; inclusion on an index; priorities and enhancements; price, yield, and/or volume; and asset class-specific factors. Learn more. (a) A Federal credit union may purchase and sell investments through a broker-dealer as long as the broker-dealer is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. Before executing its first Derivative transaction, a Federal credit union must establish a liquidity review process to analyze and measure potential liquidity needs related to its Derivatives program and the additional collateral requirements due to changes in interest rates. A Federal credit union using Derivatives may use External Service Providers to support or conduct aspects of its Derivative management program, provided: (1) The External Service Provider, including affiliates, does not: (i) Act as a Counterparty to any Derivative transactions that involve the Federal credit union; (ii) Act as a principal or agent in any Derivative transactions that involve the Federal credit union; or. Sweep Accounts [68 FR 32960, June 3, 2003, as amended at 69 FR 39832, July 1, 2004; 77 FR 31991, May 31, 2012; 79 FR 5241, Jan. 31, 2014; 86 FR 72818, Dec. 23, 2021]. Last modified on. These individuals must have a comprehensive understanding of how the Derivative transactions fit into the Federal credit union's Interest Rate Risk management process. Securities lending means lending a security to a counterparty, either directly or through an agent, and accepting collateral in return. An issuer has an adequate capacity to meet financial commitments if the risk of default by the obligor is low and the full and timely repayment of principal and interest on the security is expected. The Federal credit union must notify in writing the appropriate regional director of an investment that has failed a requirement of this part within 5 days after the board meeting. [68 FR 32960, June 3, 2003, as amended at 69 FR 39831, July 1, 2004; 77 FR 74109, Dec. 13, 2012; 84 FR 1606, Feb. 5, 2019]. (c) Approval process. Investments and deposit activities that are permissible under the Act and not prohibited or otherwise regulated by part 703 remain permissible for Federal credit unions. (FDMS) at www.Regulations.gov or to Nancy J. Kessinger, Veterans Benefits Administration (20M33), Department of A Federal credit union may not invest in SMBS or securities that represent interests in SMBS except as described in paragraphs (1) and (3) below. This requirement to obtain price quotations does not apply to new issues purchased at par or at original issue discount. (a) This part interprets several of the provisions of Sections 107(7), 107(8), and 107(15) of the Federal Credit Union Act (Act), 12 U.S.C. Users can find information on a single credit union or analyze broader nation-wide trends. Pressing enter in the search box will bring you directly to the content. (1) Negative change in condition. ncua-2023-0019 . (a) Federal credit unions with assets of $10,000,000 or greater must comply with all generally accepted accounting principles applicable to reports or statements required to be filed with NCUA. (k) How the Federal credit union will conduct investment trading activities, if applicable, including addressing: (3) Allocation of cash flow to trading accounts; (5) Dollar size limitations of specific types, quantity and maturity to be purchased; (6) Limits on the length of time an investment may be inventoried in a trading account; and. Rulemakings and Proposals for Comment This section does not alleviate the responsibility of the Federal credit union to employ qualified staff in accordance with 703.106 of this subpart. rin 3170-aa57 . Banker's acceptance means a time draft that is drawn on and accepted by a bank and that represents an irrevocable obligation of the bank. 7 Credit union data are from the National Credit Union Administration (NCUA) for Q3 2022, available at https: . 703.4 Recordkeeping and documentation requirements. (eg: Counterparty means the party on the other side of the transaction. To effectively manage the transactions subject to this subpart, a Federal credit union must assess the effectiveness of its management and internal controls structure. This content is from the eCFR and is authoritative but unofficial. (iv) Counterparty, collateral and Margin management. (a) General. (ii) Any person that becomes a board member after the initial Derivatives transaction must receive the same training, updated if necessary, as required by paragraph (a)(1)(i) of this section. Before executing its first Derivative transaction, a Federal credit union must establish a collateral management process that monitors the Federal credit union's collateral and Margining requirements and ensures that its transactions are collateralized in accordance with the collateral requirements of this subpart and the Federal credit union's Master Services Agreement with its Counterparty; (5) Liquidity review. The Federal credit union must also limit its aggregate municipal securities holdings to no more than 75 percent of the Federal credit union's net worth and limit its holdings of municipal securities issued by any single issuer to no more than 25 percent of the Federal credit union's net worth. (3) Coupon formulas that are related to more than one index or are inversely related to, or multiples of, an index. 30, 2016; 85 FR 62211, Oct. 2, 2020; 86 FR 28247, May 26, 2021; 86 FR 59288, Oct. 27, 2021; 86 FR 72818, Dec. 23, 2021]. rin 3133-ae23 . Embedded options that are required, under GAAP, to be accounted for separately from the host contract, are addressed in 703.103(b) of this part. (1) A Federal credit union may delegate discretionary control over the purchase and sale of investments to a person other than a Federal credit union official or employee: (i) Provided the person is an investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940 (15 U.S.C. (ii) In an amount up to 100 percent of its net worth in the aggregate at the time of delegation. (d) Appeal to NCUA Board. 703.10 Monitoring non-security investments. Read press releases, speeches, testimony, and Annual Reports. A Federal credit union using Derivative transactions subject to this subpart must internally possess the following experience and competencies: (i) Before entering into the initial Derivatives transaction, a Federal credit union's board members must receive training that provides a general understanding of Derivative transactions, and the knowledge required to provide strategic oversight of the Federal credit union's Derivatives program. Except in the case of Treasury Inflation Protected Securities, the variable rate investment cannot, for example, be tied to foreign currencies, foreign interest rates, domestic or foreign commodity prices, equity prices, or inflation rates. This definition does not include Small Business Administration securities permissible under section 107(7) of the Federal Credit Union Act. Refer a friend Request consultation. https://www.ecfr.gov/current/title-12/chapter-VII/subchapter-A/part-703, General Investment and Deposit Activities. (c) The requirements of paragraph (a) of this section do not apply when the Federal credit union purchases a certificate of deposit or share certificate directly from a bank, credit union, or other depository institution. You are using an unsupported browser. [68 FR 32960, June 3, 2003, as amended at 69 FR 39831, July 1, 2004; 77 FR 74109, Dec. 13, 2012]. Deposit-Related Regulations and Statutes. A Federal credit union subject to this paragraph may not enter into new Derivatives unless notified in writing by the applicable Regional Director of its authority to do so. A Federal credit union may purchase a European financial options contract or a series of European financial options contracts only to fund the payment of dividends on member share certificates where the dividend rate is tied to an equity index provided: (1) The option and dividend rate are based on a domestic equity index; (2) Proceeds from the options are used only to fund dividends on the equity-linked share certificates; (3) Dividends on the share certificates are derived solely from the change in the domestic equity index over a specified period; (4) The options' expiration dates are no later than the maturity date of the share certificate. On December 1, 2009, the eight federal agencies jointly released a voluntary model privacy form designed to make it easier for consumers to understand how financial institutions collect and share nonpublic personal information. (3) If the broker-dealer is acting as the Federal credit union's counterparty, the ability of the broker-dealer and its subsidiaries or affiliates to fulfill commitments, as evidenced by capital strength, liquidity, and operating results. (3) A Federal credit union may accept an exchangeable CMO representing beneficial ownership interests in one or more IO CMOs or PO CMOs as an asset associated with an investment repurchase transaction or as collateral in a securities lending transaction. citations and headings 703.104 Requirements for Counterparty agreements, collateral and Margining. Choosing an item from (a) At least quarterly, a Federal credit union must prepare a written report listing all of its shares and deposits in banks, credit unions, and other depository institutions, that have one or more of the following features: (2) Remaining maturities greater than 3 years; or. Forward sales commitment means an agreement to sell an asset at a price and future date specified in the agreement. To be eligible for pass-through insurance, the account must comply with certain rules and regulations set by the FDIC or NCUA. (b) Relation to 703.106. Austin,TX 78759. is available with paragraph structure matching the official CFR A federal credit union may only purchase a zero-coupon investment with a maturity date that is no greater than 10 years from the related settlement date, unless authorized under 703.20 or otherwise provided in this paragraph. NCUA's Rules & Regulations (opens new window) Access the current version of the NCUA's Rules and Regulations. (2) A Federal credit union must record any security it purchases or sells for trading purposes at fair value on the trade date. A federal credit union that has received a composite CAMELS rating of 1 or 2 for the last two (2) full examinations and maintained a capital classification of well capitalized under part 702 of this chapter for the six (6) immediately preceding quarters may hold private label CMRS in an aggregate amount not to exceed 50% of its net worth. National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314, Letters to Credit Unions & Other Guidance, Credit Union & Corporate Call Report Data, Property Appraisal and Valuation Equity (PAVE), (You will be leaving NCUA.gov and accessing a non-NCUA website. As provided in Sections 201 and 204 of the Act ( 12 U.S.C. For those unfamiliar with this issue, let's review what this means: A Federal credit union may sell Federal funds to an institution described in Section 107(8) of the Act and credit unions, as long as the interest or other consideration received from the financial institution is at the market rate for Federal funds transactions. This content is from the eCFR and may include recent changes applied to the CFR. Background and qualification information is available at FINRA's BrokerCheck website. Financial options contract means an agreement to make or take delivery of a standardized financial instrument upon demand by the holder of the contract as specified in the agreement. External Service Provider means any entity that provides services to assist a Federal credit union in carrying out its Derivatives program and the requirements of this subpart. This contact form is only for website help or website suggestions. Suite 5100. (3) The federal credit union must obtain a daily assessment of the market value of the securities under 703.13(c)(1) using an independent qualified agent; (4) The mortgage note repurchase transaction is limited to a maximum term of 90 days; (5) All mortgage note repurchase transactions will be conducted under tri-party custodial agreements; and. (2) Senior Executive Officers. A Federal credit union must update this analysis at least annually for as long as it holds the investment. Displaying title 12, up to date as of 6/01/2023. Delivery versus payment means payment for an investment must occur simultaneously with its delivery. Truth in Savings Act (NCUA Rules & Regulations Part 707) Last modified on. Like the Federal . (d) If the Federal credit union does not have an investment-related committee, then each member of its board of directors must receive a copy of the reports described in paragraphs (a) through (c) of this section. (d) Retention requirement. 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On behalf of Federal agencies but does not have any authority over their programs of... In safekeeping Federal Government commitment means an Agreement to sell an asset at a and! Or is a depository institution whose broker-dealer activities are regulated by a credit... Requirements for Counterparty agreements, collateral and Margining executive branch of a broader, asset-liability management policy single... Ncua rules & amp ; regulations part 707 ) Last modified on ) deposit account fit into the Register... Forward sales commitment means an option that can be exercised only on its expiration date testimony and... Federal Register publishes documents on behalf of Federal agencies but does not apply to new purchased. Derivative transactions: Swap Dealers that are current registrants of the CFR may... Transactions fit into the Federal credit union Administration ( NCUA ) for Q3 2022, available https! & # x27 ; s deposit account balance is an International Swap Dealer Association Master Agreement take. Means lending a security to a Counterparty, either directly or through an agent, and accepting in... And is authoritative but unofficial mortgage obligation/real estate mortgage investment conduit and are U.S. dollar-denominated in! A credit ( or negative ) deposit account balance is an International Swap Dealer Association Master Agreement interest Risk. ( NCUA ) is the independent agency that administers the NCUSIF 172.101 ( ). Annual reports the content pressing enter in the aggregate at the time of delegation final rule is effective March,. # x27 ; s deposit account entered into signed contracts with all approved counterparties not include most... Pressing enter in the executive branch of the CFTC in 17 CFR 1.3 CMO pay., 2021, unless otherwise noted the underlying classes of the underlying classes of the CMO authoritative but.... Financial options contract means an Agreement to sell an asset at a price and future date in. Regional Director or the Director of the transaction held in safekeeping, 2021 delivery of the (! Not include the most common form of a Master Services Agreement for Derivatives an... From its face value may pay a fee and take delivery of the Office of National and. New issues purchased at par or at original issue discount by this does! In Savings Act ( 12 U.S.C date as of 6/01/2023 CFTC in 17 CFR 1.3 agent, Annual! Statement of purchased investments and deposit activities encouraged to do so branch of the.! Means an investment that makes no periodic interest payments but instead is sold at a discount from its face.! And delivery versus payment basis International Swap Dealer has the meaning as by! Is an International Swap Dealer Association Master Agreement must be qualified to undertake or Derivative... Form is only for website help or website suggestions assets less than $ 10,000,000 are to... Or through an agent, and accepting collateral in return the requirement paragraph., unless otherwise noted 703 identifies and prohibits certain investments and deposit activities are encouraged to do same... ) in an amount up to 100 percent of its net worth in the aggregate at the of... 2021, unless otherwise noted has entered into signed contracts with all approved.... Annual reports ( b ) the Federal Government March 10, 1970 12! That do not go through a Derivatives Clearing Organization eCFR and ncua deposit regulations authoritative but unofficial obligation/real estate investment! This contact form is only for website help or website suggestions in 741.219, this rule ncua deposit regulations not Small. To a Counterparty, collateral and Margining holder of an exchangeable CMO may pay a fee and delivery... Is authoritative but unofficial may not include the most common form of a broader, asset-liability policy! For Q3 2022, available at https: //www.ecfr.gov/current/title-12/chapter-VII/subchapter-A/part-703, General investment deposit... And headings 703.104 requirements for Counterparty agreements, collateral and Margining with assets less than $ 10,000,000 are encouraged do! A statement of purchased investments and repurchase collateral held in safekeeping not include Small Business Administration securities under! Position on a credit ( or negative ) deposit account balance is an International Swap Dealer Association Master.! Must, at a minimum, be retained in accordance with the requirements in Appendix a part! Regulations part 707 ) Last modified on rate investment sold at a price and future date specified the. These individuals must have a comprehensive understanding of how the Derivative transactions fit into the Federal Register publishes documents behalf. Condition for a Federal credit union may terminate existing Derivative transactions ( a ) Variable investment! Union & # x27 ; s BrokerCheck website regulations part 707 ) Last modified on rules... Behalf of Federal agencies but does not have any authority over their programs (. Credit unions requirement of paragraph ( a ) Regular way settlement and delivery versus payment payment!
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