12 CFR 703.3 - Investment policies.

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There is 1 rule appearing in the Federal Register for 12 CFR 703. View below or at eCFR (GPOAccess)
§ 703.3 Investment policies.
A Federal credit union's board of directors must establish written investment policies consistent with the Act, this part, and other applicable laws and regulations and must review the policy at least annually. These policies may be part of a broader, asset-liability management policy. Written investment policies must address the following:
(a) The purposes and objectives of the Federal credit union's investment activities;
(b) The characteristics of the investments the Federal credit union may make including the issuer, maturity, index, cap, floor, coupon rate, coupon formula, call provision, average life, and interest rate risk;
(c) How the Federal credit union will manage interest rate risk;
(d) How the Federal credit union will manage liquidity risk;
(e) How the Federal credit union will manage credit risk including specifically listing institutions, issuers, and counterparties that may be used, or criteria for their selection, and limits on the amounts that may be invested with each;
(f) How the Federal credit union will manage concentration risk, which can result from dealing with a single or related issuers, lack of geographic distribution, holding obligations with similar characteristics like maturities and indexes, holding bonds having the same trustee, and holding securitized loans having the same originator, packager, or guarantor;
(g) Who has investment authority and the extent of that authority. Those with authority must be qualified by education or experience to assess the risk characteristics of investments and investment transactions. Only officials or employees of the Federal credit union may be voting members of an investment-related committee;
(h) The broker-dealers the Federal credit union may use;
(i) The safekeepers the Federal credit union may use;
(j) How the Federal credit union will handle an investment that, after purchase, is outside of board policy or fails a requirement of this part; and
(k) How the Federal credit union will conduct investment trading activities, if applicable, including addressing:
(1) Who has purchase and sale authority;
(2) Limits on trading account size;
(3) Allocation of cash flow to trading accounts;
(4) Stop loss or sale provisions;
(5) Dollar size limitations of specific types, quantity and maturity to be purchased;
(6) Limits on the length of time an investment may be inventoried in a trading account; and
(7) Internal controls, including segregation of duties.

Title 12 published on 2014-01-01

The following are only the Rules published in the Federal Register after the published date of Title 12.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-01-31; vol. 79 # 21 - Friday, January 31, 2014
    1. 79 FR 5228 - Derivatives
      GPO FDSys XML | Text
      NATIONAL CREDIT UNION ADMINISTRATION
      Final rule.
      This final rule is effective March 3, 2014.
      12 CFR Parts 703, 715, and 741

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United States Code
U.S. Code: Title 12 - BANKS AND BANKING

Title 12 published on 2014-01-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 12 CFR 703 after this date.

  • 2014-02-27; vol. 79 # 39 - Thursday, February 27, 2014
    1. 79 FR 11184 - Prompt Corrective Action—Risk-Based Capital
      GPO FDSys XML | Text
      NATIONAL CREDIT UNION ADMINISTRATION
      Proposed rule.
      Comments must be received on or before May 28, 2014.
      12 CFR Parts 700, 701, 702, 703, 713, 723, and 747