Request for Comment on Statement Concerning Complex Structured Finance Activities - District Notice

ll★KFederal Reserve Bank of Dallas2200 N. PEARL ST.DALLAS, TX 75201-2272May 21, 2004Notice 04-28TO: The Chief Executive Officer of eachfinancial institution and others concernedin the Eleventh Federal Reserve DistrictSUBJECTRequest for Comment on Statement ConcerningComplex Structured Finance ActivitiesDETAILSThe Board of Governors, Office of the Comptroller of the Currency, Office of ThriftSupervision, Federal Deposit Insurance Corporation, and Securities and Exchange Commissionhave requested public comment on a proposed interagency statement concerning the complexstructured finance activities of financial institutions (national and state banks; bank holdingcompanies; federal and state savings associations; savings and loan holding companies; andSEC-registered broker-dealers and investment advisors) supervised by the agencies.As recent events have highlighted, a financial institution may assume substantialreputational and legal risk if the institution enters into a complex structured finance transactionwith a customer and the customer uses the transaction to circumvent regulatory or financialreporting requirements, evade tax liabilities, or further other illegal or improper behavior. Theproposed interagency statement describes the types of internal controls and risk managementprocedures that the agencies believe are particularly effective in assisting financial institutions toidentify and address the reputational, legal, and other risks ...