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Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and regulates federal credit unions.
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Regulation & Supervision
The NCUA protects the safety and soundness of the credit union system by identifying, monitoring and reducing risks to the National Credit Union Share Insurance Fund. Backed by the full faith and credit of the United States, the Share Insurance Fund provides up to $250,000 of federal share insurance to millions of account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions.
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Cybersecurity Resources
Cyberattacks and cybersecurity vulnerabilities pose significant risks to the financial system. Because of vulnerabilities within the credit union industry and the broader financial system to potential cyberattacks, cybersecurity is one of the NCUA’s top supervisory priorities and a top-tier risk under the agency’s enterprise risk-management program.

12 CFR 70360

97-0803 / September 1997

12 CFR 70360

Subject

Investments

Historic Status

Historic

William Kurdyla, Second Vice President
Gibraltar Securities Co.
25 Hanover Rd.
Florham Park, NJ 07932-1407

Re: 12 C.F.R. §703.60
Your Letter of July 31, 1997

Dear Mr. Kurdyla:

You have asked whether your firm's securities safekeeping arrangements meet the requirements of Section 703.60(c) of the National Credit Union Administration Rules and Regulations, effective January 1, 1998. The answer is yes.

Your company, a broker-dealer, sells securities to federal credit unions (FCUs) and safekeeps them with a third party, Correspondent Services Corporation (CSC). Section 703.60(c) states that an FCU "may not allow the selling broker-dealer to safekeep purchased investments or repurchase collateral." Your firm's custodial arrangement with CSC does not constitute "broker-dealer safekeeping" within the meaning of the regulation. Section 703.60(c) prohibits an FCU from allowing a broker-dealer to serve, itself, as a depository for securities the FCU has purchased from the broker-dealer.

Sincerely,

/s/

Sheila A. Albin
Associate General Counsel

GC/LH:bhs
SSIC 4660
97-0803

Last modified on

11/14/24