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January 17, 1997
|Circular No. 10914|
Appendix D to Operating Circular No. 21
To All Depository Institutions and Others Concerned in the Second Federal Reserve District:
Effective February 1, 1997, the Federal Reserve Bank of New York will provide Restricted Securities Accounts for holding book-entry securities pledged as collateral to secure deposits of funds by state or local governments.
Appendix D to Operating Circular No. 21, "Custody Agreement for Book-Entry Securities," sets forth the terms under which this Bank will maintain the joint-custody collateral accounts.
Questions on this matter should be directed to Gerald V. Lombardo, Electronic Payments Officer, Securities Transfer Department.
William J. McDonough,
Appendix D to
Operating Circular No. 21
Effective February 1, 1997
To All Depository Institutions, and Others
This Appendix sets forth the terms under which this Bank holds Book-Entry securities in custody for the benefit of a state or local government or unit thereof to which the securities have been pledged.
Terms of Agreement
All terms appearing in this Appendix shall be defined as they are defined in the Operating Circular. In addition, the terms defined in this section shall have the following meanings throughout this Appendix.
2. Operating Circular
The Bank makes available its facilities and provides custodial services in accordance with Paragraph 6(b) of the Operating Circular and this Appendix. All terms and conditions of the Operating Circular, as they may be amended from time to time, govern and are incorporated into any and all custody agreements, except to the extent that they are inconsistent with the terms of the custody agreement.
3. Authorization to Hold Book-Entry Securities
4. Establishment of Restricted Securities Account and Standard Bond Provisions
5. Pledged Securities Account Transfers and Other Activities:
6. Interest Payments and Other Proceeds
7. Collection of Pledged Securities and Proceeds
8. Termination of Agreement or Pledge Securities Account:
9. Prohibited Acts:
Notwithstanding any other provision of this Appendix or the Operating Circular the Bank is not required to perform any act directed by the Pledgee or otherwise required by the Pledgee if the Pledgee is prohibited from requiring such act or the Bank is prohibited from performing the act by operation of law or by court order.
10. Limitations on Bank's Liability and Duties:
The Pledgee shall not be required to pay for any services that the Bank furnishes under this Appendix and the Bank shall not seek payment from the Pledgee. The Pledgor shall be assessed fees in accordance with the Operating Circular.
12. Governing Law
Any custody agreement, entered into by the Bank pursuant to the Operating Circular and this Appendix, shall be construed in accordance with Federal law of the United States and in the absence of controlling Federal law, the laws of the State of New York.
13. Revision of Operating Circular
The Bank reserves the right to amend, at any time, the provisions of the Operating Circular and this Appendix.
William J. McDonough,
[Federal Reserve Bank of New York
In consideration for establishing an account, wherein the Federal Reserve Bank of New York ("Bank") will hold in custody book-entry securities that are pledged to __________, we agree to the provisions of Appendix D to your Operating Circular 21. In addition, we certify that we have executed an agreement that complies with Paragraph 4 of Appendix D to your Operating Circular 21 and have enclosed, pursuant to Paragraphs 4(a)(ii) and (b) a description of any duties that state or local laws, or the pledge agreement or bond imposes on the Bank.
The Bank is hereby authorized and instructed to establish the Pledged Securities Account. Upon acknowledgment that the account has been established, the Pledgor will transfer the Collateral into the Securities Account.
William J. McDonough