[Federal Register Volume 61, Number 177 (Wednesday, September 11, 1996)]
[Proposed Rules]
[Page 47829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23240]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 61, No. 177 / Wednesday, September 11, 1996 /
Proposed Rules
[[Page 47829]]
FARM CREDIT ADMINISTRATION
12 CFR Part 615
RIN 3052-AB68
Funding and Fiscal Affairs, Loan Policies and Operations, and
Funding Operations; Foreign Denominated Debt
AGENCY: Farm Credit Administration.
ACTION: Resolution of advance notice of proposed rulemaking.
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SUMMARY: The Farm Credit Administration (FCA) Board gives notice that
no amendments to FCA regulations are planned as a result of the Advance
Notice of Proposed Rulemaking (ANPRM) concerning the proposed issuance
of Farm Credit securities denominated in foreign currencies by the
Federal Farm Credit Banks Funding Corporation (Funding Corporation), on
behalf of the Farm Credit banks.
FOR FURTHER INFORMATION CONTACT:
Michael J. LaVerghetta, Senior Financial 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: The FCA requested public comment through an
ANPRM on November 24, 1995 (60 FR 57963) to assist it in determining
whether the risks relating to the issuance of Farm Credit debt
securities denominated in foreign currencies pose any unique safety and
soundness concerns that needed to be addressed through amendments to
FCA regulations. The comment period closed on January 31, 1996.
The FCA received one comment letter on the ANPRM, in which the
Funding Corporation observed that the risks of issuing foreign currency
denominated debt (FCDD) could be managed with standards and procedures
similar to those now used by the System in interest rate swaps. After
careful consideration, the FCA has determined that issuance of FCDD
will not raise any safety and soundness concerns that cannot
effectively be managed through the FCA funding approval process and
other FCA guidance, such as the bookletter entitled ``Guidelines for
Utilizing Derivative Products.''
The FCA noted in the ANPRM that current Sec. 615.5450(b) under
subpart O, which specifies that System securities shall be issued in
denominations of $1000, $5000 or multiples thereof, could be
interpreted to apply to System issuance of FCDD. However, the FCA
interprets subpart O to apply only to the Federal Reserve Banks' book-
entry procedures for issuance of domestic debt securities and not to
the issuance of FCDD. Thus, no changes to Sec. 615.5450 of subpart O
are necessary.
On November 17, 1995, the FCA adopted an interim rule establishing
a new subpart P that differentiates Systemwide debt securities
distributed outside the United States from those issued through the
Federal Reserve Banks under existing Funding Corporation
programs.1 Issuances of FCDD by the Funding Corporation, on behalf
of the banks, under the Farm Credit System's Global Debt Program shall
be guided by subpart P and will be subject to the FCA funding approval
process. Accordingly, the FCA does not plan any further rulemaking at
this time in connection with the issuance of Systemwide debt securities
denominated in foreign currencies.
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\1\ See 60 FR 57916 (November 24, 1995). The rule also clarified
the Funding Corporation's statutory authority to: (1) use more than
one fiscal agent for issuance of Systemwide debt securities; and (2)
employ fiscal agents other than Federal Reserve Banks for issuance
of Systemwide debt securities in foreign capital markets. The FCA
adopted the interim rule as final on March 1, 1996 (61 FR 12015).
Dated: August 29, 1996.
Floyd Fithian,
Secretary, Farm Credit Administration Board.
[FR Doc. 96-23240 Filed 9-10-96; 8:45 am]
BILLING CODE 6705-01-P