Five federal agencies today requested public comment on a revised proposed
statement on the complex structured finance activities of financial institutions.
The revised statement describes the types of internal controls and risk
management procedures that should help financial institutions identify,
manage and address the heightened legal and reputational risks that may
arise from certain complex structured finance transactions.
The agencies have modified the revised statement in several important
respects in light of the comments received on the original proposed statement,
which was issued for comment on May 19, 2004. For example, the agencies
have reorganized, streamlined and modified the statement to make the document
more principles-based and focused on those complex structured finance transactions
that may pose heightened levels of legal or reputational risk to a financial
The proposed statement was issued by the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, the Office of
the Comptroller of the Currency, the Office of Thrift Supervision and the
Securities and Exchange Commission. The revised statement would represent
supervisory guidance for institutions supervised by the four banking agencies
and a policy statement for institutions supervised by the Securities and
Comments on the revised statement are requested within thirty days of
publication in the Federal Register, expected shortly. The revised proposed
statement is attached.