Circular
Board Announces Final Rules for Asset-Backed Commercial Paper Money Market Fund Liquidity Facility
January 30, 2009
Circular No. 12062

The Federal Reserve Board has announced two final rules pertaining to the Asset-Backed Commercial Paper Money Market Fund Liquidity Facility (AMLF), which extends loans to banking organizations to finance their purchases of high-quality asset-backed commercial paper from money market mutual funds.

The first rule provides a temporary limited exception from the Board's leverage and risk-based capital rules for bank holding companies and state member banks. The second rule provides a temporary limited exception from sections 23A and 23B of the Federal Reserve Act, which establish certain restrictions on and requirements for transactions between a bank and its affiliates.

The Board has also adopted a third final rule, originally approved as an interim final rule on September 14, 2008. It provides a temporary exception to the limitations in section 23A of the Federal Reserve Act, allowing all insured depository institutions to provide liquidity to their affiliates for assets typically funded in the tri-party repo market.

See the press release for full details.

Press release offsite