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 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.”

What is a covered transaction Reg W?

Covered transactions include loans and other extensions of credit to an affiliate, investments in the securities of an affiliate, purchases of assets from an affiliate, and certain other transactions that expose the bank to the risks of its affiliates.

What is regulation W attribution rule?

A1: The attribution rule of Regulation W states that any transaction between a member bank and a person is deemed to be a transaction between the member bank and an affiliate to the extent that the proceeds of the transaction are used for the benefit of, or transferred to, the affiliate.

What does section 23A of the Federal Reserve Act mean?

Affiliate Transactions (Regulation W) Section 23A of the Federal Reserve Act (12 USC 371c) is the primary statute governing transactions between a bank and its affiliates. Section 23A (1) designates the types of companies that are affiliates of a bank; (2) specifies the types of transactions covered by the statute;

What is the definition of affiliate in Section 23A?

Section 23A Definition of “Affiliate” Controlling, controlled by, or under common control 9 Not a common law but a statutory concept • Affiliation is a statutorily defined index of relatedness that subjects one or both related entities to a particular legal treatment.

What is the impact of Federal Reserve Regulation W?

Adoption of Regulation W Implementing Sections 23A and 23B of the Federal Reserve Act Section 20 subsidiaries–Impact on Inspections Resulting from the Replacement of “Firewalls” with Operating Standards