[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]


 ========================================================================
 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.
 
 ========================================================================
 

  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.

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

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.
---------------------------------------------------------------------------

    \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