Fedwire Securities - Payment System Risk Policy Changes

January 31, 2006

Source: Federal Reserve Financial Services

January 31, 2006

The Federal Reserve Banks' policy statement on Payment System Risk is being modified, effective July 20, 2006. These changes will impact the processing of interest and redemption payments for securities issued by government-sponsored enterprises (GSEs) and certain international organizations. In conjunction with the policy changes, affected issuers will likely adjust their funding and payment patterns since they will no longer be permitted to incur an overdraft position in their Federal Reserve Bank accounts for purposes of funding interest and redemption payments.

Specifically, these changes will impact:

The number of interest and redemption payments your institution will receive.
The dollar amount of each individual payment.
The time of day payments are made.

Policy Change Press Release link off site
Complete Policy Statement

Please contact your Wholesale Operations Site for more information.