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| ## Comptroller of the Currency                                        |
|                                                                       |
| > Administrator of National Banks                                     |
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Washington, DC 20219

March 29, 2006 **Interpretive Letter #1056**

###### April 2006

Denis McHugh, Corporate Managing Director

Camille Rudge, Group Senior Vice President

LaSalle Bank, N.A.

540 W. Madison Street, Suite 2800

Chicago, IL 60661

Re: Authority of a National Bank to Engage in

[Financial Intermediation Transactions]{.underline}

Dear Mr. McHugh & Ms. Rudge:

This responds to your request that the Office of the Comptroller of the
Currency ("OCC") confirm that it is permissible for LaSalle Bank, N.A.
("Bank") to engage in customer-driven,[^1] perfectly matched,
cash-settled derivative transactions on the same reference assets
permitted under OCC Interpretive Letter No. 1039 (September 13, 2005),
with the exception of emissions allowances. The Bank also seeks
clarification that OCC Interpretive Letter No. 1039 permits national
banks to use "frozen concentrate" orange juice as a permissible
reference asset for these transactions.[^2] Finally, the Bank proposes
that in addition to high density polyethylene, which was listed as a
permissible reference asset in OCC Interpretive Letter No. 1039, the
Bank also may use linear low density polyethylene and polypropylene as
permissible reference assets. For the reasons discussed below and
subject to the limitations described herein, the transactions on the
proposed reference assets are permissible for the Bank.

In OCC Interpretive Letter No. 1039, we determined that a national bank
may engage in customer-driven, perfectly matched, cash-settled
derivative transactions on the reference assets identified in that
letter as part of bank permissible financial derivative transactions.
The permissibility of the activity was conditioned on the national bank
in question having established, to the satisfaction of its
examiner-in-charge ("EIC"), an appropriate risk measurement and
management process for the activities.[^3]

On the basis of the analysis set forth in detail in OCC Interpretive
Letter No. 1039, we conclude that the Bank may similarly act as a
financial intermediary in customer-driven, perfectly matched,
cash-settled, derivative transactions on the reference assets described
above, provided the Bank's EIC is satisfied the Bank has adequate risk
management systems and controls to conduct the activities on a safe and
sound basis. Our conclusions are specifically based on the Bank's
representations and written submissions describing the facts and
circumstances of the subject transactions. Any change in the facts or
circumstances could result in different conclusions. If you have any
questions concerning this letter, please contact Tena M. Alexander,
Special Counsel, Securities and Corporate Practices Division, at (202)
874-5210.

Sincerely,

signed

Julie L. Williams

First Senior Deputy Comptroller

and Chief Counsel

[^1]: A "customer-driven" transaction is one entered into for a
    customer\'s valid and independent business purpose. *See* OCC
    Interpretive Letter No. 892 (September 13, 2000).

[^2]: OCC Interpretive Letter No. 1039 includes "orange juice" in its
    list of permissible reference assets, but does not clarify that this
    term includes frozen concentrate orange juice.

[^3]: This process is necessary for the Bank to achieve its customer
    risk management objectives in a safe and sound manner and, thus,
    must be established before the OCC can conclude that the activities
    are permissible for the Bank.