---
kind: "section"
citation: "12 C.F.R. § 703.107"
title: "12"
number: "703.107"
heading: "External service providers."
url: "https://uscodex.org/cfr/12/703.107"
---

# §703.107. External service providers.

- (a) **General.** A Federal credit union using Derivatives may use External Service Providers to support or conduct aspects of its Derivative management program, provided:
  - (1) **The External Service Provider, including affiliates, does not—**
    - (i) Act as a Counterparty to any Derivative transactions that involve the Federal credit union;
    - (ii) Act as a principal or agent in any Derivative transactions that involve the Federal credit union; or
    - (iii) **Have discretionary authority to execute any of the Federal credit union's Derivative transactions.**
  - (2) The Federal credit union has the internal capacity, experience, and skills to oversee and manage any External Service Providers it uses; and
  - (3) The Federal credit union documents the specific uses of External Service Providers in its policies and procedures, as described in [§ 703.106(c)](/cfr/12/703.106.md?p=c) of this subpart.
- (b) **Relation to § 703.106.** This section does not alleviate the responsibility of the Federal credit union to employ qualified staff in accordance with [§ 703.106](/cfr/12/703.106.md) of this subpart.

## Notes

### 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.