What are 23A covered transactions?
The definition of covered transaction in section 23A includes both a loan or extension of credit by a bank to an affiliate and a bank’s purchase of or investment in securities issued by an affiliate.
What type of transaction is regulated by section 23A of the Federal Reserve Act?
Section 23A of the Federal Reserve Act (12 USC 371c) is the primary statute governing transactions between a bank and its affiliates.
Which of the following are examples of covered transactions with affiliates under section 23A?
a loan or extension of credit to the affiliate, including a purchase of assets subject to an agreement to repurchase;
Is collateral required for all 23A covered credit transactions?
Securities issued by an affiliate and low-quality assets are not acceptable collateral for any credit transaction with an affiliate. Section 23B requires that certain transactions, including all covered transactions, be on market terms and conditions (“Market Terms Requirement”).
Which is considered a covered transaction under section 23A because of the attribution rule?
Under the attribution rule in section 23A(a)(2), any transaction by a bank with a third party is deemed to be a transaction with an affiliate to the extent that “the proceeds of that transaction are used for the benefit of or transferred to the affiliate.”
Are covered transactions subject to 10 percent rule?
Investments by the bank in the financial subsidiaries of affiliated depository institutions are subject to the 10 percent limitation. Aggregate covered transactions with all financial subsidiaries and other affiliates of the bank are subject to the 20 percent limitation.
What is a super 23A covered fund?
The so-called Super 23A provisions of the Volcker Rule generally prohibit “covered transactions” between a covered fund and a banking entity (and the affiliates of such banking entity) that sponsors or advises or organizes and offers such fund.
Is a hedge fund a covered fund?
Loosely put, the Rule defines a covered fund as anything not considered an investment company in the Investment Company Act, including private equity and hedge funds, as well as commodity pools with certain exclusions, and funds sponsored by a US banking entity where the affiliate holds ownership interests.
What is the significance of the Federal Reserve Act?
Significance of the Federal Reserve Act. The Federal Reserve Act was one of Wilson’s most successful enduring legislative accomplishments – it was landmark legislation that created the central banking system (the Federal Reserve).
Is the Federal Reserve legal?
Federal Reserve Notes are legal tender, with the words “this note is legal tender for all debts, public and private” printed on each note. They have replaced United States Notes, which were once issued by the Treasury Department . Federal Reserve Notes are backed by the assets of the Federal Reserve Banks,…
What is the definition of Federal Reserve Act?
Definition and Summary of the Federal Reserve Act. Summary and Definition: The Federal Reserve Act aka the Owen-Glass Act or the Currency Bill, was a law passed during the era of the Progressive Movement that was designed to safeguard the US economy by establishing a regional Federal Reserve System operating under a supervisory board in Washington.
What is section 23A?
What is Section 23a? Section 23a of the State School Aid Act [MCL 388.1623a] describes dropout recovery programs that qualify for the “special membership counting provision” found in Section 6(4)(dd) of the State School Aid Act [MCL 388.1606]. In certain circumstances, the full-time equivalency (FTE) for pupils participating under Section 23a can exceed 1.0.
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