Text of Proposal, Comments due August 15, 2001
Final Exemptions & Interpretations, effective June 11, 2001
Interim Rules, effective January 1, 2002,
Comments due August 15, 2001
To All State Member Banks, Bank Holding Companies, and Section 20 Subsidiaries in the Second Federal Reserve District:
At its meeting on May 2, 2001, the Board of Governors of the Federal Reserve System decided to seek public comment on a proposed new Regulation W comprehensively implementing sections 23A and 23B of the Federal Reserve Act. The sections restrict loans by a bank to an affiliate, asset purchases by a bank from an affiliate, and other transactions between a bank and its affiliates. In a press release issued that day, the Board explained the rationale and the details of its proposal and interim plans.
On May 4, the Board announced that the proposed regulation would be published in the Federal Register and that comments were requested by August 15, 2001. The full text of the proposed Regulation W (pdf - 145kb) was published in the Federal Register of May 11.
In another press release on May 4, the Board of Governors granted the exemptions from and the interpretations of section 23A that had been proposed in June 1998 (see our Circular No. 11064, dated June 25, 1998). The effective date for this action is June 11, 2001. The official notices (pdf - 76kb) also appeared in the May 11 Federal Register.
At the same time, the Federal Reserve Board announced that it is seeking comments, by August 15, on interim final rules requiring institutions to (1) adopt policies and procedures to monitor, manage and control credit exposures arising from derivatives transactions with affiliates and intraday credit extensions to affiliates, and (2) subject such transactions to the market terms requirement of section 23B. The interim rules (pdf - 43kb) are effective January 1, 2002, and are published in the May 11 Federal Register.
Questions on this matter may be directed, at this Bank, to James V. Keogh, Examining Officer, Legal and Compliance Risk Department.