§703.104. Requirements for Counterparty agreements, collateral and Margining.
12 C.F.R. § 703.104
To enter into Derivative transactions under this subpart, a Federal credit union must:
Have an executed Master Services Agreement with a Counterparty. Such agreement must be reviewed by counsel with expertise in similar types of transactions to ensure the agreement reasonably protects the interests of the Federal credit union;
Use only the following Counterparties—
For exchange-traded and cleared Derivatives— Swap Dealers, Introducing Brokers, and/or FCMs that are current registrants of the CFTC; or
For Non-cleared Derivative transactions— Swap Dealers that are current registrants of the CFTC.
Utilize contracted Margin requirements with a maximum Margin threshold amount of $250,000; and
For Non-cleared Derivative transactions, accept as eligible collateral, for Margin requirements, only the following: Cash (U.S. dollars), U.S. Treasuries, government-sponsored enterprise debt, U.S. government agency debt, government-sponsored enterprise residential mortgage-backed security pass-through securities, and U.S. government agency residential mortgage-backed security pass-through securities.
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.