The proposed rule would apply to foreign currency futures, options on futures,
and options as these terms are used in the Commodity Exchange Act. The rule
would also apply to transactions that are "functionally or economically similar"
to futures and options, such as "rolling spot" trades. Under the proposed rule:
- FDIC-supervised IDIs entering into trades covered by the proposed rule would
be subject to requirements in six areas: disclosure, recordkeeping, capital
and margin, reporting, business conduct, and documentation. The requirements
focus on safety and soundness and consumer protection.
- Traditional spot and forward contracts would not be covered by this rule.
- The rule would only apply to covered transactions with a retail customer.
For purposes of the proposed rule, a retail customer may include certain
small businesses. It may also include an individual with $10 million or less
invested on a discretionary basis and who is not using the trades to reduce
risks associated with other investments.
- FDIC-supervised IDIs engaged in or that wish to engage in transactions
covered by the proposed rule would be required to submit a detailed business
plan and demonstrate board approval of the activity, among other
requirements, and obtain written approval from the FDIC to provide such
- FDIC-supervised IDIs engaged in this or any sales or marketing of any
investment products should continue to meet the expectations set out in the
1994 Interagency Statement on Retail Sales of Nondeposit Investment
Products to the extent such expectations do not conflict with the
requirements of the proposed rule. See FIL-9-94 (Feb. 17, 1994).
FDIC-Supervised Banks (Commercial and Savings)
Chief Executive Officer
Chief Financial Officer
Chief Risk Officer
Chief Compliance Officer
Notice of Proposed Rulemaking - PDF
John Feid, Senior Capital Markets Specialist, Division of Risk Management
Supervision, Capital Markets Branch, at JFeid@FDIC.gov or (202) 898 8649
John Jackwood, Senior Policy Analyst, Division of Depositor and Consumer
Protection, Supervisory Policy Branch, at JJackwood@FDIC.gov or (202) 898-3991
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web
site at www.fdic.gov/news/news/financial/2011/index.html
To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html
Paper copies of FDIC financial institution letters may be obtained through the
FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA
22226 (1 877 275 3342 or 703 562 2200).