---
kind: "range"
citation: "12 C.F.R. §§ 615.5452–615.5460"
title: "12"
from: "615.5452"
to: "615.5460"
count: 9
url: "https://uscodex.org/cfr/12/615.5452..615.5460"
---

# §615.5452. Law governing rights and obligations of Federal Reserve Banks, Farm Credit banks, and Funding Corporation; rights of any person against Federal Reserve Banks, Farm Credit banks, and Funding Corporation.

- (a) Except as provided in [paragraph (b)](#b) of this section, the following are governed solely by the regulations contained in this subpart O, the securities documentation, and Federal Reserve Bank Operating Circulars:
  - (1) The rights and obligations of the Farm Credit banks, the Funding Corporation, and the Federal Reserve Banks with respect to:
    - (i) A book-entry security or security entitlement, and
    - (ii) The operation of the Book-entry System as it applies to Farm Credit securities; and
  - (2) The rights of any person, including a participant, against the Farm Credit banks, the Funding Corporation, and the Federal Reserve Banks with respect to:
    - (i) A book-entry security or security entitlement, and
    - (ii) The operation of the Book-entry System as it applies to Farm Credit securities.
- (b) A security interest in a security entitlement that is in favor of a Federal Reserve Bank from a participant and that is not recorded on the books of a Federal Reserve Bank pursuant to [§ 615.5454(c)(1)](/cfr/12/615.5454.md?p=c-1) of this subpart, is governed by the law (not including the conflict-of-law rules) of the jurisdiction where the head office of the Federal Reserve Bank maintaining the participant's securities account is located. A security interest in a security entitlement that is in favor of a Federal Reserve Bank from a person that is not a participant, and that is not recorded on the books of a Federal Reserve Bank pursuant to [§ 615.5454(c)(1)](/cfr/12/615.5454.md?p=c-1)of this subpart, is governed by the law determined in the manner specified in [§ 615.5453](/cfr/12/615.5453.md) of this subpart.
- (c) If the jurisdiction specified in the first sentence of [paragraph (b)](#b) of this section is a State that has not adopted revised Article 8 (see [31 CFR 357.2](/cfr/31/357.2.md)) then the law specified in [paragraph (b)](#b) of this section shall be the law of that State as though revised Article 8 had been adopted by that State.

# §615.5453. Law governing other interests.

- (a) To the extent not inconsistent with these regulations, the law (not including the conflict-of-law rules) of a securities intermediary's jurisdiction governs:
  - (1) The acquisition of a security entitlement from the securities intermediary;
  - (2) The rights and duties of the securities intermediary and entitlement holder arising out of a security entitlement;
  - (3) Whether the securities intermediary owes any duties to an adverse claimant to a security entitlement;
  - (4) Whether an adverse claim can be asserted against a person who acquires a security entitlement from the securities intermediary or a person who purchases a security entitlement or interest therein from an entitlement holder; and
  - (5) Except as otherwise provided in [paragraph (c)](#c) of this section, the perfection, effect of perfection or non-perfection and priority of a security interest in a security entitlement.
- (b) **The following rules determine a “securities intermediary's jurisdiction” for purposes of this section—**
  - (1) If an agreement between the securities intermediary and its entitlement holder specifies that it is governed by the law of a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction.
  - (2) If an agreement between the securities intermediary and its entitlement holder does not specify the governing law as provided in [paragraph (b)(1)](#b-1) of this section, but expressly specifies that the securities account is maintained at an office in a particular jurisdiction, that jurisdiction is the securities intermediary's jurisdiction.
  - (3) If an agreement between the securities intermediary and its entitlement holder does not specify a jurisdiction as provided in paragraph [(b)(1)](#b-1) or [(b)(2)](#b-2) of this section, the securities intermediary's jurisdiction is the jurisdiction in which is located the office identified in an account statement as the office serving the entitlement holder's account.
  - (4) If an agreement between the securities intermediary and its entitlement holder does not specify a jurisdiction as provided in paragraph [(b)(1)](#b-1) or [(b)(2)](#b-2) of this section and an account statement does not identify an office serving the entitlement holder's account as provided in [paragraph (b)(3)](#b-3) of this section, the securities intermediary's jurisdiction is the jurisdiction in which is located the chief executive office of the securities intermediary.
- (c) Notwithstanding the general rule in [paragraph (a)(5)](#a-5) of this section, the law (but not the conflict-of-law rules) of the jurisdiction in which the person creating a security interest is located governs whether and how the security interest may be perfected automatically or by filing a financing statement.
- (d) If the jurisdiction specified in [paragraph (b)](#b) of this section is a State that has not adopted revised Article 8 (see [31 CFR 357.2](/cfr/31/357.2.md)), then the law for the matters specified in [paragraph (a)](#a) of this section shall be the law of that State as though revised Article 8 had been adopted by that State. For purposes of the application of the matters specified in [paragraph (a)](#a) of this section, the Federal Reserve Bank maintaining the securities account is a clearing corporation, and the participant's interest in a book-entry security is a security entitlement.

# §615.5454. 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 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 Federal 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) The Farm Credit Banks, the Funding Corporation, 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 Farm Credit Bank, the Funding Corporation, 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)](#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)](#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 [§ 615.5452(b)](/cfr/12/615.5452.md?p=b) or [§ 615.5453](/cfr/12/615.5453.md) of this subpart. The perfection, effect of perfection or non-perfection and priority of a security interest are governed by that 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 that law, including with respect to the effect of perfection and priority of the security interest. A Federal Reserve Bank Operating Circular shall be treated as a rule adopted by a clearing corporation for such purposes.

# §615.5455. Obligations of the Farm Credit banks and the Funding Corporation; no adverse claims.

- (a) Except in the case of a security interest in favor of the United States or a Federal Reserve Bank or otherwise as provided in [§ 615.5454(c)(1)](/cfr/12/615.5454.md?p=c-1), for the purposes of this subpart O, the Farm Credit banks, the Funding Corporation and the Federal Reserve Banks shall treat the participant to whose securities account an interest in a book-entry security has been credited as the person exclusively entitled to issue a transfer message, to receive interest and other payments with respect thereof and otherwise to exercise all the rights and powers with respect to such security, notwithstanding any information or notice to the contrary. The Federal Reserve Banks, the Farm Credit banks, and the Funding Corporation are not liable to a person asserting or having an adverse claim to a security entitlement or to a book-entry security in a participant's securities account, including any such claim arising as a result of the transfer or disposition of a book-entry security by a Federal Reserve Bank pursuant to a transfer message that the Federal Reserve Bank reasonably believes to be genuine.
- (b) The obligation of the Farm Credit banks and the Funding Corporation to make payments (including payments of interest and principal) with respect to book-entry securities is discharged at the time payment in the appropriate amount is made as follows:
  - (1) Interest or other payments on book-entry securities are either credited by a Federal Reserve Bank to a funds account maintained at the Federal Reserve Bank or otherwise paid as directed by the participant.
  - (2) Book-entry securities are redeemed in accordance with their terms by a Federal Reserve Bank withdrawing the securities from the participant's securities account in which they are maintained and by either crediting the amount of the redemption proceeds, including both principal and interest, where applicable, to a funds account at the Federal Reserve Bank or otherwise paying such principal and interest as directed by the participant. No action by the participant is required in connection with the redemption of a book-entry security.

# §615.5456. Authority of Federal Reserve Banks.

- (a) Each Federal Reserve Bank is hereby authorized as fiscal agent of the Farm Credit banks and the Funding Corporation to perform functions with respect to the issuance of book-entry securities offered and sold by the Farm Credit banks and the Funding Corporation to which this subpart applies, in accordance with the terms of the securities documentation and the provisions of this subpart:
  - (1) To service and maintain book-entry securities in accounts established for such purposes;
  - (2) To make payments of principal and interest, as directed by the Farm Credit banks and the Funding Corporation;
  - (3) To effect transfer of book-entry securities between participants' securities accounts as directed by the participants;
  - (4) To effect conversions between book-entry securities and definitive Farm Credit securities with respect to those securities as to which conversion rights are available pursuant to the applicable securities documentation; and
  - (5) To perform such other duties as fiscal agent as may be requested by the Farm Credit banks and the Funding Corporation.
- (b) Each Federal Reserve Bank may issue Operating Circulars not inconsistent with this subpart, governing the details of its handling of book-entry securities, security entitlements, and the operation of the Book-entry System under this subpart.

# §615.5457. Withdrawal of eligible book-entry securities for conversion to definitive form.

- (a) Eligible book-entry securities may be withdrawn from the Book-entry System by requesting delivery of like definitive Farm Credit securities.
- (b) A Federal Reserve Bank shall, upon receipt of appropriate instructions to withdraw eligible book-entry securities from book-entry in the Book-entry System, convert such securities into definitive Farm Credit securities and deliver them in accordance with such instructions.
- (c) Farm Credit securities which are to be delivered upon withdrawal may be issued in either registered or bearer form, to the extent permitted by the applicable securities documentation.
- (d) All requests for withdrawal of eligible book-entry securities must be made prior to the maturity or the applicable date of call of the Farm Credit securities.

# §615.5458. Waiver of regulations.


The Farm Credit Administration reserves the right, in the Farm Credit Administration's discretion, to waive any provision(s) of the regulations in this subpart in any case or class of cases for the convenience of the Farm Credit banks and the Funding Corporation or in order to relieve any person(s) of unnecessary hardship, if such action is not inconsistent with law, does not adversely affect any substantial existing rights, and the Farm Credit Administration is satisfied that such action will not subject the Farm Credit banks and the Funding Corporation to any substantial expense or liability.


# §615.5459. Liability of Farm Credit banks, Funding Corporation and Federal Reserve Banks.


The Farm Credit banks, the Funding Corporation, and the Federal Reserve Banks may rely on the information provided in a transfer message or other transaction documentation, and are not required to verify the information. The Farm Credit banks, the Funding Corporation, and the Federal Reserve Banks shall not be liable for any action taken in accordance with the information set out in the transfer message, other transaction documentation, or evidence submitted in support thereof.


# §615.5460. Additional provisions.

- (a) **Additional requirements.** In any case or any class of cases arising under the regulations in this subpart, the Farm Credit banks and the Funding Corporation may require such additional evidence and a bond of indemnity, with or without surety, as may in the judgment of the Farm Credit banks and the Funding Corporation be necessary for the protection of the interests of the Farm Credit banks and the Funding Corporation.
- (b) **Notice of attachment for Farm Credit securities in the Book-entry System.** The interest of a debtor in a security entitlement may be reached by a creditor only by legal process upon the securities intermediary with whom the debtor's securities account is maintained, except where a security entitlement is maintained in the name of a secured party, in which case the debtor's interest may be reached by legal process upon the secured party. These regulations do not purport to establish whether a Federal Reserve Bank is required to honor an order or other notice of attachment in any particular case or class of cases.
- (c) **Conversion of definitive securities into book-entry securities.** Definitive Farm Credit securities may be converted to book-entry form in accordance with the terms of the applicable securities documentation and Federal Reserve Operating Circular.