Source: https://www.law.cornell.edu/cfr/text/12/225.142
Timestamp: 2017-06-27 03:46:12
Document Index: 335714304

Matched Legal Cases: ['art 225', '§ 225', '§ 1817', '§ 1818', '§ 1828', '§ 1831', '§ 1831', '§ 1843', '§ 1844', '§ 1972', '§ 3106', '§ 3108', '§ 3310', '§ 3331', '§ 3332', '§ 3333', '§ 3334', '§ 3335', '§ 3336', '§ 3337', '§ 3338', '§ 3339', '§ 3340', '§ 3341', '§ 3342', '§ 3343', '§ 3344', '§ 3345', '§ 3346', '§ 3347', '§ 3348', '§ 3349', '§ 3350', '§ 3351', '§ 3907', '§ 3909']

12 CFR 225.142 - Statement of policy concerning bank holding companies engaging in futures, forward and options contracts on U.S. Government and agency securities and money market instruments. | US Law | LII / Legal Information Institute
CFR › Title 12 › Chapter II › Subchapter A › Part 225 › Subpart I › Section 225.142 12 CFR 225.142 - Statement of policy concerning bank holding companies engaging in futures, forward and options contracts on U.S. Government and agency securities and money market instruments.
§ 225.142 Statement of policy concerning bank holding companies engaging in futures, forward and options contracts on U.S. Government and agency securities and money market instruments.
(a)Purpose of financial contract positions. In supervising the activities of bank holding companies, the Board has adopted and continues to follow the principle that bank holding companies should serve as a source of strength for their subsidiary banks. Accordingly, the Board believes that any positions that bank holding companies or their nonbank subsidiaries take in financial contracts should reduce risk exposure, that is, not be speculative. (b)Establishment of prudent written policies, appropriate limitations and internal controls and audit programs. If the parent organization or nonbank subsidiary is taking or intends to take positions in financial contracts, that company's board of directors should approve prudent written policies and establish appropriate limitations to insure that financial contract activities are performed in a safe and sound manner with levels of activity reasonably related to the organization's business needs and capacity to fulfill obligations. In addition, internal controls and internal audit programs to monitor such activity should be established. The board of directors, a duly authorized committee thereof or the internal auditors should review periodically (at least monthly) all financial contract positions to insure conformity with such policies and limits. In order to determine the company's exposure, all open positions should be reviewed and market values determined at least monthly, or more often, depending on volume and magnitude of positions. (c)Formulating policies and recording financial contracts. In formulating its policies and procedures, the parent holding company may consider the interest rate exposure of its nonbank subsidiaries, but not that of its bank subsidiaries. As a matter of policy, the Board believes that any financial contracts executed to reduce the interest rate exposure of a bank affiliate of a holding company should be reflected on the books and records of the bank affiliate (to the extent required by the bank policy statements), rather than on the books and records of the parent company. If a bank has an interest rate exposure that management believes requires hedging with financial contracts, the bank should be the direct beneficiary of any effort to reduce that exposure. The Board also believes that final responsibility for financial contract transactions for the account of each affiliated bank should reside with the management of that bank.
(d)Accounting. The joint bank policy statements of March 12, 1980 include accounting guidelines for banks that engage in financial contract activities. Since the Financial Accounting Standards Board is presently considering accounting standards for contract activities, no specific accounting requirements for financial contracts entered into by parent bank holding companies and nonbank subsidiaries are being mandated at this time. The Board expects to review further developments in this area.
(e)Board to monitor bank holding company transactions in financial contracts. The Board intends to monitor closely bank holding company transactions in financial contracts to ensure that any such activity is consistent with maintaining a safe and sound banking system. In any cases where bank holding companies are found to be engaging in speculative practices, the Board is prepared to institute appropriate action under the Financial Institutions Supervisory Act of 1966, as amended.
(f)Federal Reserve Bank notification. Bank holding companies should furnish written notification to their District Federal Reserve Bank within 10 days after financial contract activities are begun by the parent or a nonbank subsidiary. Holding companies in which the parent or a nonbank subsidiary currently engage in financial contract activity should furnish notice by March 31, 1983.
(Secs. 5(b) and 8 of the Bank Holding Company Act ( 12 U.S.C. 1844 and 1847); sec. 8(b) of the Financial Institutions Supervisory Act ( 12 U.S.C. 1818(b))
[ 48 FR 7720, Feb. 24, 1983] This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.United States CodeU.S. Code: Title 12 - BANKS AND BANKING§ 1817 - Assessments§ 1818 - Termination of status as insured depository institution§ 1828 - Regulations governing insured depository institutions§ 1831i - Agency disapproval of directors and senior executive officers of insured depository institutions or depository institution holding companies§ 1831p-1§ 1843 - Interests in nonbanking organizations§ 1844 - Administration§ 1972 - Certain tying arrangements prohibited; correspondent accounts§ 3106 - Nonbanking activities of foreign banks§ 3108 - Regulation and enforcement§ 3310 - Establishment of Appraisal Subcommittee§ 3331 - Purpose§ 3332 - Functions of Appraisal Subcommittee§ 3333 - Chairperson of Appraisal Subcommittee; term of Chairperson; meetings§ 3334 - Officers and staff§ 3335 - Powers of Appraisal Subcommittee§ 3336 - Procedures for establishing appraisal standards and requiring use of certified and licensed appraisers§ 3337 - Startup funding§ 3338 - Roster of State certified or licensed appraisers; authority to collect and transmit fees§ 3339 - Functions of Federal financial institutions regulatory agencies relating to appraisal standards§ 3340 - Time for proposal and adoption of standards§ 3341 - Functions of Federal financial institutions regulatory agencies relating to appraiser qualifications§ 3342 - Transactions requiring services of State certified appraiser§ 3343 - Transactions requiring services of State licensed appraiser§ 3344 - Time for proposal and adoption of rules§ 3345 - Certification and licensing requirements§ 3346 - Establishment of State appraiser certifying and licensing agencies§ 3347 - Monitoring of State appraiser certifying and licensing agencies§ 3348 - Recognition of State certified and licensed appraisers for purposes of this chapter§ 3349 - Violations in obtaining and performing appraisals in federally related transactions§ 3350 - Definitions§ 3351 - Miscellaneous provisions§ 3907 - Capital adequacy§ 3909 - General authorities