Interpretation of Recordkeeping Rules
on "Forward Repurchase
Agreement Transactions" Conducted by Financial Institutions
as Government Securities Brokers or Dealers
The Commissioner of the Department of the Treasury's Bureau
of the Public Debt issued the attached interpretative letter
on April 19, 1996, to clarify the recordkeeping requirements
of the Government Securities Act of 1986 (GSA) and to promote
consistent application of recordkeeping rules on "forward
repurchase agreement transactions" (forward repos). Forward
repos are repurchase and reverse repurchase agreements that
settle in the future.
The recordkeeping rules apply to financial institutions that
have filed, or are required to file, notice as government
securities brokers or dealers.
The Treasury Department views the timely recording of all
government securities transactions, including the recording
of any unsettled future transactions, such as forward repos,
as important in meeting the purposes of the GSA and as an
appropriate and prudent business practice. The timely issuance
of confirmations is also a fundamental tool for strengthening
customer protection and a prudent business practice in any
type of government securities transaction.
The Treasury Department's interpretation will be included
in the FDIC's loose-leaf service. For further information,
please contact the Government Securities Regulations staff
of the Bureau of the Public Debt at (202) 219-3632.
Nicholas J. Ketcha Jr.
The attachment to this Financial Institution Letter is not
currently available in electronic format. Until it is in a
form that will allow us to post it to the internet, you may
obtain hard copy or fax from:
Public Information Center
801 17th St. NW
Washington, DC 20434
ph: (703) 562-2200
Distribution: FDIC-Supervised Banks (Commercial and