12 CFR 956.3 - Prohibited investments and prudential rules.
(1) Instruments that provide an ownership interest in an entity, except for investments described in §§ 940.3(e) and (f) of this chapter;
(2) Instruments issued by non-United States entities, except United States branches and agency offices of foreign commercial banks;
(i) Investments described in § 940.3(e) of this chapter;
(ii) Debt instruments that were downgraded to a below investment grade rating after acquisition by the Bank; or
(ii) Investments described in § 940.3(e) of this chapter;
(iii) Marketable direct obligations of state, local, or tribal government units or agencies, having at least the second highest credit rating from an NRSRO, where the purchase of such obligations by the Bank provides to the issuer the customized terms, necessary liquidity, or favorable pricing required to generate needed funding for housing or community lending;
(iv) Mortgage-backed securities, or asset-backed securities collateralized by manufactured housing loans or home equity loans, that meet the definition of the term “securities” under 15 U.S.C. 77b(a)(1); and
(v) Loans held or acquired pursuant to section 12(b) of the Act (12 U.S.C. 1432(b)).
(b) Foreign currency or commodity positions prohibited. A Bank may not take a position in any commodity or foreign currency. A Bank may participate in consolidated obligations denominated in a currency other than U.S. Dollars or linked to equity or commodity prices, provided that the Bank meets the requirements of § 966.8(d) of this chapter, and all other applicable requirements related to issuing consolidated obligations.
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