[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR703.11]



[Page 400]

 

                       TITLE 12--BANKS AND BANKING

 

            CHAPTER VII--NATIONAL CREDIT UNION ADMINISTRATION

 

PART 703_INVESTMENT AND DEPOSIT ACTIVITIES--Table of Contents

 

Sec. 703.11  Valuing securities.



    (a) Before purchasing or selling a security, a Federal credit union 

must obtain either price quotations on the security from at least two 

broker-dealers or a price quotation on the security from an industry-

recognized information provider. This requirement to obtain price 

quotations does not apply to new issues purchased at par or at original 

issue discount.

    (b) At least monthly, a Federal credit union must determine the fair 

value of each security it holds. It may determine fair value by 

obtaining a price quotation on the security from an industry-recognized 

information provider, a broker-dealer, or a safekeeper.

    (c) At least annually, the Federal credit union's supervisory 

committee or its external auditor must independently assess the 

reliability of monthly price quotations received from a broker-dealer or 

safekeeper. The Federal credit union's supervisory committee or external 

auditor must follow generally accepted auditing standards, which require 

either re-computation or reference to market quotations.

    (d) If a Federal credit union is unable to obtain a price quotation 

required by this section for a particular security, then it may obtain a 

quotation for a security with substantially similar characteristics.