TO:  Chief Executive Officers of National Banks, General Managers of Federal Branches and
     Agencies, Deputy Comptrollers, Department and Division Heads, and Examining
     Personnel




On October 27, 1993, the Office of the Comptroller of the Currency (OCC) issued BC-277, Risk
Management of Financial Derivatives, to provide guidance on risk management practices to
institutions engaging in financial derivatives activities.

Since that time, the OCC has received numerous questions about the guidance in that circular. 
The attached document answers the most frequently asked questions and provides greater detail
on the guidance in BC-277.

For additional information, please contact the Capital Markets Division, Office of the Chief
National Bank Examiner, (202) 874-5070.




                                                   
Douglas E. Harris
Senior Policy Advisor to the Comptroller

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