REQUEST FOR COMMENT ON INTERIM RULE ON DERIVATIVES TRANSACTIONS BETWEEN BANKS AND AFFILIATES.The Federal Reserve Board announced on May 4, 2001, that it is seeking public comment on interim final rules, under sections 23A and 23B of the Federal Reserve Act, requiring institutions to (1) adopt policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental to monitor, manage, and control credit exposures arising from derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. transactions with affiliates and intraday Intraday Another way of saying "within the day." Notes: This term is often used for the new highs and lows of a security. For example, "a new intraday high" means a security reached a new all-time high throughout the trading day, but then fell by closing. credit extensions to affiliates and (2) subject such transactions to the market terms requirement of section 23B. The Board voted to issue the rule at its meeting on May 2, 2001. Sections 23A and 23B restrict loans by a bank to an affiliate, asset purchases by a bank from an affiliate, and other transactions between a bank and its affiliates. The interim rules are effective January January: see month. 1, 2002. The rules will be published in the Federal Register. Comment is requested by August 15, 2001. Concurrent At the same time. It implies that multiple processes are taking place simultaneously. See concurrent operation. with these interim final rules, the Board issued a proposal for a new Regulation W, which also seeks comment on how to address these transactions under section 23A. |
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