[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: 12CFR703.9]



[Page 399-400]

 

                       TITLE 12--BANKS AND BANKING

 

            CHAPTER VII--NATIONAL CREDIT UNION ADMINISTRATION

 

PART 703_INVESTMENT AND DEPOSIT ACTIVITIES--Table of Contents

 

Sec. 703.9  Safekeeping of investments.



    (a) A Federal credit union's purchased investments and repurchase 

collateral must be in the Federal credit union's possession, recorded as 

owned



[[Page 400]]



by the Federal credit union through the Federal Reserve Book-Entry 

System, or held by a board-approved safekeeper under a written custodial 

agreement that requires the safekeeper to exercise, at least, ordinary 

care.

    (b) Any safekeeper used by a Federal credit union must be regulated 

and supervised by either the Securities and Exchange Commission, a 

Federal or State depository institution regulatory agency, or a State 

trust company regulatory agency.

    (c) A Federal credit union must obtain and reconcile monthly a 

statement of purchased investments and repurchase collateral held in 

safekeeping.

    (d) Annually, the Federal credit union must analyze the ability of 

the safekeeper to fulfill its custodial responsibilities, as evidenced 

by capital strength, liquidity, and operating results. The Federal 

credit union should consider current financial data, annual reports, 

reports of nationally-recognized statistical rating organizations, 

relevant disclosure documents, and other sources of financial 

information.



[68 FR 32960, June 3, 2003, as amended at 69 FR 39831, July 1, 2004]