§ 612.2130 - Definitions.

§ 612.2130 Definitions.

For purposes of this partsubpart, the following terms are defined:

(a)

and definitions apply excepting that words like document, record, certify, report, sign, and write generally should be interpreted to permit their electronic equivalents:

Agent means any person, other than a director or employee of the institution, with the power to act for the institution either by contract or apparent authority and who currently either represents

a

the System institution in contacts with third parties or

who currently

provides professional or fiduciary services to the institution.

Code of Ethics means a written statement of the principles and values the System institution

, such as legal, accounting, appraisal, and other similar services. (b) A conflict of interest or the appearance thereof exists when

follows to establish a culture of ethical conduct for directors and employees, including, at a minimum, the core principles established under this subpart.

Conflicts of interest means a set of circumstances or appearance thereof where a person has a financial interest in a transaction, relationship, or activity that could or does actually

affects

affect (or has the appearance of affecting

the

) that person's ability to perform official duties and responsibilities in a totally impartial manner and in the best interest of the

employing

institution when viewed from the perspective of a reasonable person with knowledge of the relevant facts.

(c) Controlled entity and entity controlled by mean an entity in which the individual, directly or indirectly, or acting through or in concert with one or more persons:

(1) Owns 5 percent or more of the equity;

(2) Owns, controls, or has the power to vote 5 percent or more of any class of voting securities; or

(3) Has the power to exercise a controlling influence over the management of policies of such entity.

(d) Employee means any salaried officer or

Employee means any individual working on a part-time, full-time, or temporary

salaried employee. (e)

basis by the System institution, including those identified as officers of the institution. Persons not maintained on the institution's payroll (i.e., independent contractors) are not employees for purposes of this subpart.

Entity means a corporation, company, association, firm, joint venture, partnership (general or limited),

society, joint stock company,

trust (business or otherwise)

, fund,

or other

organization or institution.

(f) Family means an individual and spouse and anyone having the following relationship to either: parents, spouse, son, daughter, sibling, stepparent, stepson, stepdaughter, stepbrother, stepsister, half brother, half sister, uncle, aunt, nephew, niece, grandparent, grandson, granddaughter, and the spouses of the foregoing.

(g)

business operation whether or not incorporated.

Family means parents, spouses or civil union partners, children, siblings, uncles, aunts, nephews, nieces, grandparents, grandchildren, and the spouses of the foregoing, whether arising from biological, adoptive, marital, or other legal means (e.g., stepparents, stepchildren, half-siblings, in-laws). The term also includes anyone residing in the household or who is a legal or financial dependent, regardless of any familial relationship.

Financial interest means an interest in an activity, transaction, property, or relationship with a person

or an entity

that involves receiving or providing something of monetary value or other present or deferred compensation.

(h)

Financially obligated with means having a

joint

legally enforceable joint obligation with, being financially obligated on behalf of (contingently or otherwise), having an enforceable legal obligation secured by property owned by another person, or owning property that secures an enforceable legal obligation of another.

(i)

Material, when applied to a financial interest or transaction

or

(including a series of transactions viewed in the aggregate), means that the interest or transaction

or series of transactions

is of

such

sufficient magnitude that a reasonable person with knowledge of the relevant facts would question the ability of the person who has the interest or is party to such transaction(s) to perform

his or her

the person's official duties objectively and impartially and in the best interest of the institution and its statutory purpose.

(j)

Mineral interest means any interest in minerals, oil, or gas, including

,

but not limited to, any right derived directly or indirectly from a mineral, oil, or gas lease, deed, or royalty conveyance.

(k) OFI means other financing institutions that have established an access relationship with a Farm Credit Bank or an agricultural credit bank under section 1.7(b)(1)(B) of the Act.

(l)

Officer means the chief executive officer, president, chief operating officer, vice president, secretary, treasurer, general counsel, chief financial officer, and chief credit officer of

each

the System institution, and any person not so designated but who holds a similar position of authority.

(m)

Ordinary course of business, when applied to a transaction, means:

(1) A transaction that is usual and customary

between two persons who are

in

business together

the business in question on terms that are not preferential; or

(2) A transaction with a person who is in the business of offering the goods or services that are the subject of the transaction on terms that are not preferential.

Person means individual or entity (including sole proprietorships).

Preferential means that the transaction is not on the same terms as those prevailing at the same time for comparable transactions for other persons who are not directors, employees or

employees

agents of a System institution.

(n) Person means individual or entity.

(o) Relative means any member of the family as defined in paragraph (g) of this section.

(p) Service corporation means each service corporation chartered under the Act.

(q) Standards of Conduct Official means the official designated under § 612.2170 of these regulations.

(r) Supervised institution is a term which

Reportable business entity means an entity in which the reporting individual, directly or indirectly, or acting through or in concert with one or more persons:

(1) Owns a material percentage of the equity;

(2) Owns, controls, or has the power to vote a material percentage of any class of voting securities; or

(3) Has the power to exercise a material influence over the management of policies of such entity from his or her status as a partner, director, officer, or majority shareholder in the entity.

Resolved means an actual or apparent conflict of interest that has been addressed with an action such as recusal, divestiture, approval or exception, job reassignment, employee supervision, employment separation or other action, with the result that a reasonable person with knowledge of the relevant facts would conclude that the conflicting interest is unlikely to adversely affect the person's performance of official duties in an objective and impartial manner and in furtherance of the interests and statutory purposes of the Farm Credit System.

Standards of Conduct Official or “SOCO” means a person appointed by the institution's board of directors pursuant to this subpart to administer and report on the institution's Standards of Conduct Program, as well as investigate allegations of misconduct by institution directors, employees or agents.

Standards of Conduct Program or SOC program means the policies and procedures, internal controls and other actions a System institution must implement to put into practice the requirements of this subpart.

Supervised institution is a term that only applies within the context of a

System

Farm Credit bank or

an

employee of a

System

Farm Credit bank and refers to each association supervised by that Farm Credit bank.

(s)

Supervising institution is a term that only applies within the context of an association or

an

employee of an association and refers to the Farm Credit bank that supervises that association.

(t)

System institution and institution

mean

means any Farm Credit System bank, association, or service corporation

in the Farm Credit System, including the Farm Credit Banks, banks for cooperatives, Agricultural Credit Banks, Federal land bank associations, agricultural credit associations, Federal land credit associations, production credit associations, the Federal Farm Credit Banks Funding Corporation, and service corporations chartered under the Act.

[59 FR 24894, May 13, 1994, as amended at 71 FR 5762, Feb. 2, 2006; 78 FR 31834, May 28, 2013]

chartered under section 4.25 of the Act, and the Funding Corporation. It does not include the Federal Agricultural Mortgage Corporation.