[Federal Register Volume 61, Number 58 (Monday, March 25, 1996)]
[Rules and Regulations]
[Page 12015]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7107]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 61, No. 58 / Monday, March 25, 1996 / Rules
and Regulations
[[Page 12015]]
FARM CREDIT ADMINISTRATION
12 CFR Part 615
RIN 3052-AB66
Funding and Fiscal Affairs, Loan Policies and Operations, and
Funding Operations; Global Debt
AGENCY: Farm Credit Administration.
ACTION: Final rule.
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SUMMARY: The Farm Credit Administration (FCA) adopts as final without
change an interim rule that clarifies the Federal Farm Credit Banks
Funding Corporation's (Funding Corporation) statutory authority to use
more than one fiscal agent to facilitate the sale of Systemwide debt
securities. The rule permits the Funding Corporation to employ fiscal
agents other than Federal Reserve Banks (FRBs) for issuance of dollar
denominated Systemwide debt securities in foreign capital markets. The
rule recognizes the authority of the Funding Corporation to issue,
sell, and distribute Systemwide debt securities on behalf of the Farm
Credit banks (banks) on a global basis and allows the banks to engage
in debt marketing practices used by other Government-Sponsored
Enterprises (GSEs).
EFFECTIVE DATE: January 2, 1996.
FOR FURTHER INFORMATION CONTACT: Laurie A. Rea, Policy Analyst, Office
of Examination, Farm Credit Administration, McLean, VA 22102-5090,
(703)883-4498;
or
William L. Larsen, Senior Attorney, Office of General Counsel, Farm
Credit Administration, McLean, VA 22102-5090, (703)883-4020, TDD
(703)883-4444.
SUPPLEMENTARY INFORMATION: On November 24, 1995, the FCA published an
interim rule with a request for public comments (60 FR 57916). The
interim rule clarified the Funding Corporation's statutory authority to
employ fiscal agents other than FRBs for issuance of dollar-denominated
Systemwide debt securities in foreign capital markets and required the
Funding Corporation Board of Directors to approve each prospective
global agent. The interim rule also established a new subpart that
differentiates Systemwide debt securities distributed outside the
United States from those issued through the FRBs under existing Funding
Corporation programs. In adopting the interim rule, the FCA noted that
marketing debt internationally may broaden the investor base for
Systemwide debt securities and lead to lower funding costs.
The FCA received one comment on the interim rule. In its comment
letter, the Funding Corporation supported the interim rule as essential
for the successful issuance of securities under a global debt program.
The Funding Corporation also requested clarification on the reference
in the preamble to ``* * * the requirement that the Funding Corporation
Board of Directors approve each prospective global agent and clearing
system'' (60 FR 57919) (emphasis added). The Funding Corporation
pointed out that, in contrast, the interim rule does not refer to
Funding Corporation board approval of clearing systems but only to
approval of ``each global agent'' (Sec. 615.5502(b)).
The preamble was designed to emphasize the significant role a
global agent plays in global debt offerings rather than place an
additional requirement on the Funding Corporation Board of Directors.
The intent of the regulation is only to require the Funding Corporation
Board of Directors to approve each prospective global agent. The
preamble broadly contrasts the operational risks of using a global
agent and international clearing system(s) with the operational risks
of using the FRBs as fiscal agent and the FRBs' book-entry system and
recognizes that the global agent will have significant influence on the
determination of which international clearing system(s) are used.
As a practical matter, the Funding Corporation, global agent, and
dealers will agree on the clearing system(s) that will be made
available for clearance and settlement of transactions in advance of
any primary distribution of global debt securities. Therefore,
information concerning the clearance and settlement procedures and the
responsibilities of program participants can be provided in either the
offering circular or pricing supplement.
With this clarification, the FCA Board adopts the interim rule
amending 12 CFR part 615, which was published at 60 FR 57916 on
November 24, 1995, as final without change.
List of Subjects in 12 CFR Part 615
Accounting, Agriculture, Banks, banking, Government securities,
Investments, Rural areas.
Dated: March 19, 1996.
Floyd Fithian,
Secretary, Farm Credit Administration Board.
[FR Doc. 96-7107 Filed 3-22-96; 8:45 am]
BILLING CODE 6705-01-P