[Code of Federal Regulations]
[Title 12, Volume 3]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR250.247]

[Page 683]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 250--MISCELLANEOUS INTERPRETATIONS--Table of Contents
 
Sec. 250.247  Application of sections 23A and 23B of the Federal Reserve Act to derivative transactions between insured depository institutions and their 
          affiliates.

    (a) Derivative transactions between an insured depository 
institution and its affiliates are subject to the market terms 
requirement of section 23B(a)(1) of the Federal Reserve Act (12 U.S.C. 
371c-1(a)(1)).
    (b) An insured depository institution must establish and maintain 
policies and procedures reasonably designed to manage the credit 
exposure arising from its derivative transactions with affiliates in a 
safe and sound manner. The policies and procedures must at a minimum 
provide for:
    (1) Monitoring and controlling the credit exposure arising from the 
institution's derivative transactions with each affiliate and all 
affiliates in the aggregate; and
    (2) Ensuring that the institution's derivative transactions with 
affiliates comply with section 23B.
    (c) For purposes of this regulation, derivative transactions include 
any derivative contract listed in paragraphs A. III. E. 1. a. through d. 
of appendix A to 12 CFR part 225 and any similar derivative contract, 
including credit derivative contracts.

[66 FR 24233, May 11, 2001]

    Effective Date Note: At 67 FR 76622, Dec. 12, 2002, Sec. 250.247 was 
removed, effective Apr. 1, 2003.