Yesterday afternoon the Board adopted staff recommendations to:

* Regulation W - request comment on Regulation W that would
comprehensively implement sections 23A and 23B of the Federal Reserve Act.
This proposed regulation would confirm Board and staff interpretations,
revise other previous staff opinions, proposes several additional
exemptions, and addresses new topics under sections 23A and 23B.
* Section 23B - issue interim final regulations, with a delayed
effective date of January 1, 2002 that would: 1)clarify that
institution-affiliate derivative transactions are subject to the market
terms requirement of Section 23B;  2)require that banks maintain policies
and procedures reasonably designed to monitor, manage and control credit
exposures to affiliates arising from derivative transactions and intraday
extensions of credit with affiliates. The policies and procedures must at a
minimum monitor and control the credit exposure arising from the
institution's derivative transactions with each affiliate, and all
affiliates in the aggregate, ensuring that the institution's derivative
transactions with affiliates comply with Section 23B
* Section 23A - the application of section 23A appears to be addressed
in two forms.  Regulation W proposes a set of questions on measures that
could be applied to institution-affiliate derivative transactions under
section 23A.  Additionally, the Board is also requesting public comment on
the most appropriate treatment of derivative transactions between banks and
affiliates under section 23A through the interim final rule.

The comment period for proposed Regulation W and the interim final rule on
sections 23A and 23B is 90 days from issuance in the Federal Register which
has not yet occurred. The full text of the Board Memo and proposed rules can
be accessed through www.federalreserve.gov. I have included a shortcut to
the site below.  The relevant regulations are included under item 2.
Proposals regarding Sections 23A and 23B of the Federal Reserve Act.  2a. is
Regulation W  and 2b. is the Interim Final Rule on 23A and 23B.  In case the
shortcut does not work go to General Information -- then: Board Meetings --
then: May 2, 2001. Please call if you have any questions.  Many thanks!
 <<Open meeting memoranda.url>>

Stacy Carey
Policy Director
International Swaps and Derivatives Association
600 5th Avenue, 27th Floor
Rockefeller Center
New York, NY  10020
(212) 332-1202 ph
(212) 332-1212 fax
(917) 543-9622 cell
scarey@isda.org



 - Open meeting memoranda.url