[Code of Federal Regulations]

[Title 24, Volume 1]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR81.93]



[Page 470]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

PART 81_THE SECRETARY OF HUD'S REGULATION OF THE FEDERAL NATIONAL 

MORTGAGE ASSOCIATION (FANNIE MAE) AND THE FEDERAL HOME LOAN MORTGAGE 

CORPORATION (FREDDIE MAC)--Table of Contents

 

                     Subpart H_Book-Entry Procedures

 

Sec.  81.93  Creation of Participant's Security Entitlement; security 

interests.



    (a) A Participant's Security Entitlement is created when a Federal 

Reserve Bank indicates by book-entry that a Book-entry GSE Security has 

been credited to a Participant's Securities Account.

    (b) A security interest in a Security Entitlement of a Participant 

in favor of the United States to secure deposits of public money, 

including without limitation deposits to the Treasury tax and loan 

accounts, or other security interest in favor of the United States that 

is required by Federal statute, regulation, or agreement, and that is 

marked on the books of a Federal Reserve Bank is thereby effected and 

perfected, and has priority over any other interest in the securities. 

Where a security interest in favor of the United States in a Security 

Entitlement of a Participant is marked on the books of a Federal Reserve 

Bank, such Reserve Bank may rely, and is protected in relying, 

exclusively on the order of an authorized representative of the United 

States directing the transfer of the security. For purposes of this 

paragraph, an ``authorized representative of the United States'' is the 

official designated in the applicable regulations or agreement to which 

a Federal Reserve Bank is a party, governing the security interest.

    (c)(1) A GSE and the Federal Reserve Banks have no obligation to 

agree to act on behalf of any Person or to recognize the interest of any 

transferee of a security interest or other limited interest in favor of 

any Person except to the extent of any specific requirement of Federal 

law or regulation or to the extent set forth in any specific agreement 

with the Federal Reserve Bank on whose books the interest of the 

Participant is recorded. To the extent required by such law or 

regulation or set forth in an agreement with a Federal Reserve Bank, or 

the Federal Reserve Bank Operating Circular, a security interest in a 

Security Entitlement that is in favor of a Federal Reserve Bank, a GSE, 

or a Person may be created and perfected by a Federal Reserve Bank 

marking its books to record the security interest. Except as provided in 

paragraph (b) of this section, a security interest in a Security 

Entitlement marked on the books of a Federal Reserve Bank shall have 

priority over any other interest in the securities.

    (2) In addition to the method provided in paragraph (c)(1) of this 

section, a security interest, including a security interest in favor of 

a Federal Reserve Bank, may be perfected by any method by which a 

security interest may be perfected under applicable law as described in 

Sec.  81.92(b) or (d). The perfection, effect of perfection or non-

perfection and priority of a security interest are governed by such 

applicable law. A security interest in favor of a Federal Reserve Bank 

shall be treated as a security interest in favor of a clearing 

corporation in all respects under such law, including with respect to 

the effect of perfection and priority of such security interest. A 

Federal Reserve Bank Operating Circular shall be treated as a rule 

adopted by a clearing corporation for such purposes.



[61 FR 63948, Dec. 2, 1996, as amended at 62 FR 28977, May 29, 1997]