[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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  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.

-----------------------------------------------------------------------

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