§ 703.60 - What rules govern my safekeeping of investments?

(a) Your (a federal credit union's) purchased investments and repurchase collateral must be in your possession, recorded as owned by you through the Federal Reserve Book-Entry System, or held by a board-approved safekeeper under a written custodial agreement. A custodial agreement is a contract in which a third party agrees to exercise ordinary care in protecting the securities held in safekeeping for its customers.

(b) You must obtain an individual confirmation statement for each investment purchased or sold.

(c) Any safekeeper you use must be regulated and supervised by either the Securities and Exchange Commission or a federal or state depository institution regulatory agency.

(d) You must obtain and reconcile monthly a statement of purchased investments and repurchase collateral held in safekeeping.

(e) All purchases and sales of investments must be delivery versus payment (i.e., payment for an investment must occur simultaneously with its delivery).