[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: 12CFR270.4]

[Page 850-851]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 270--OPEN MARKET OPERATIONS OF FEDERAL RESERVE BANKS--Table of Contents
 
Sec. 270.4  Transactions in obligations.

    (a) Each Federal Reserve bank shall engage in open market operations 
under section 14 of the Federal Reserve Act only in accordance with this 
part and with the authorizations and directives issued by the Committee 
from time to time, and no Reserve bank shall decline to engage in open 
market operations as directed by the Committee.
    (b) Transactions for the System Open Market Account shall be 
executed by a Federal Reserve bank selected by the Committee. The 
participations of the several Federal Reserve banks in such account and 
in the profits and losses on transactions for the account shall be 
allocated in accordance with principles determined by the Committee from 
time to time.
    (c) In accordance with such limitations, terms, and conditions as 
are prescribed by law and in authorizations and directives issued by the 
Committee, the Reserve bank selected by the Committee is authorized and 
directed--
    (1) To buy and sell Government securities and U.S. agency securities 
in the open market for the System Open Market Account, and to exchange 
maturing securities with the issuer;
    (2) To buy and sell banker's acceptances in the open market for its 
own account;
    (3) To buy Government securities, U.S. agency securities, and 
banker's acceptances of the kinds described above, under agreements for 
repurchase of such obligations, in the open market for its own account; 
and
    (4) To buy and sell foreign currencies in the form of cable 
transfers in the

[[Page 851]]

open market for the System Open Market Account and to maintain for such 
account reciprocal currency arrangements with foreign banks among those 
designated by the Board of Governors of the Federal Reserve System under 
Sec. 214.5 of this chapter (Regulation N).
    (d) The Federal Reserve banks are authorized and directed to engage 
in such other operations as the Committee may from time to time 
determine to be reasonably necessary to the effective conduct of open 
market operations and the effectuation of open market policies.

[38 FR 2753, Jan. 30, 1973, as amended at 39 FR 11873, Apr. 1, 1974; 48 
FR 32336, July 15, 1983]