§703.103. Requirements related to the characteristics of permissible Interest Rate Risk Derivatives.
12 C.F.R. § 703.103
Under this subpart, a Federal credit union may only enter into Derivatives that have the following characteristics:
Are for the purpose of managing Interest Rate Risk;
Denominated in U.S. dollars;
Based on Domestic Interest Rates or the U.S. dollar-denominated London Interbank Offered Rate (LIBOR);
A contract maturity equal to or less than 15 years, as of the Trade Date; and
Not used to create Structured Liability Offerings for members or nonmembers.
A Federal credit union may not engage in embedded options required under U.S. Generally Accepted Accounting Principles (GAAP) to be accounted for separately from the host contract.
Notes, amendments, and revision history
Source
Source: 86 FR 28247, May 26, 2021, unless otherwise noted.
Authority
Authority: 12 U.S.C. 1757(7), 1757(8), 1757(14) and 1757(15).
Source
Source: 68 FR 32960, June 3, 2003, unless otherwise noted.