Permissible derivatives activities for national banks.

CFR · 2024-01-01 · US · Title 12

(a) (b) (1) (2) (3) (4) (5) (6) (7) (c) (1) Derivatives transactions with payments based on underlyings a national bank is permitted to purchase directly as an investment; (2) Derivatives transactions with any underlying to hedge the risks arising from bank-permissible activities; (3) Derivatives transactions as a financial intermediary with any underlying that are customer-driven, cash-settled, and either perfectly-matched or portfolio-hedged; (4) Derivatives transactions as a financial intermediary with any underlying that are customer-driven, physically-settled by transitory title transfer, and either perfectly-matched or portfolio-hedged; and (5) Derivatives transactions as a financial intermediary with any underlying that are customer-driven, physically-hedged, and either portfolio-hedged or hedged on a transaction-by-transaction basis, and provided that: (i) The national bank does not take physical delivery of any commodity by receipt of physical quantities of the commodity on bank premises; and (ii) Physical hedging activities meet the requirements of paragraph (e) of this section. (d) (i) Engaging in derivatives hedging activities pursuant to paragraph (c)(2) of this section; (ii) Expanding the bank's derivatives hedging activities pursuant to paragraph (c)(2) of this section to include a new category of underlying for derivatives transactions; (iii) Engaging in customer-driven financial intermediation derivatives activities pursuant to paragraph (c)(3), (4), or (5) o

official document · source cfr-2024 · id 12:§ 7.1030