Texas Register, Volume 48, Number 45, Pages 6497-6654, November 10, 2023 Page: 6,510
1 v. ; 28 cm.View a full description of this periodical.
Extracted Text
The following text was automatically extracted from the image on this page using optical character recognition software:
decrease in future legislative appropriations to the department;
require an increase or decrease in fees paid to the department;
create a new regulation; or increase or decrease the number of
individuals subject to the rules' applicability.
Finally, Director Whitson has determined that there will be no ad-
verse economic effect on small businesses, micro-businesses,
or rural communities from the proposed amended rules and no
difference in the cost of compliance for these entities.
To be considered, comments on the proposed amendments
must be submitted to the department in writing no later than
5:00 p.m. on December 11, 2023. Comments should be
addressed to General Counsel, Texas Department of Banking,
Legal Division, 2601 North Lamar Boulevard, Suite 300, Austin,
Texas 78705-4294. Comments may also be submitted by email
to legal@dob.texas.gov.
This proposal is made under the authority of Finance Code
11.301 which authorizes the commission to adopt rules ap-
plicable to state banks, and Finance Code, 31.003, which
authorizes the commission to adopt rules necessary to preserve
or protect the safety and soundness of state banks.
This proposal affects the statutes administered and enforced by
the department's commissioner with respect to state banks, con-
tained in Finance Code, Subtitle A. No other statute is affected
by this proposal.
12.2. Definitions.
Definitions in the Finance Code, Title 3, Subtitles A and G, are incor-
porated herein by reference. As used in this subchapter and in Finance
Code, Chapter 34, concerning investments and loans, the following
words and terms shall have the following meanings, unless the con-
text clearly indicates otherwise.
(1) - (3) (No change.)
(4) Credit derivative--As defined in 12 C.F.R. 324.2 (or
12 C.F.R. 217.2 in the case of a bank that is a member of the Federal
Reserve System) [2 of the federal eapital adequacy guidelines].
(5) - (6) (No change.)
(7) Eligible credit derivative--A single-name credit deriva-
tive or a standard, non-tranched index credit derivative provided that:
(A) the derivative contract meets the requirements of an
eligible guarantee, as defined in 12 C.F.R. 324.2 (or 12 C.F.R. 217.2
in the case of a bank that is a member of the Federal Reserve System)
[2ofthe federaleapitatadequay guidelines], and has been confirmed
by the protection purchaser and the protection provider;
(B) any assignment of the derivative contract has been
confirmed by all relevant parties;(C) if the credit derivative is a credit default swap, the
derivative contract includes the following credit events:
(i) failure to pay any amount due under the terms
of the reference exposure, subject to any applicable minimal payment
threshold that is consistent with standard market practice and with a
grace period that is closely in line with the grace period of the reference
exposure; and
(ii) bankruptcy, insolvency, restructuring (for oblig-
ors not subject to bankruptcy or insolvency), or inability of the obligor
on the reference exposure to pay its debts, or its failure or admission
in writing of its inability generally to pay its debts as they become due,
and similar events;(D) the terms and conditions dictating the manner in
which the derivative contract is to be settled are incorporated into the
contract;
(E) if the derivative contract allows for cash settlement,
the contract incorporates a robust valuation process to estimate loss
with respect to the derivative reliably and specifies a reasonable period
for obtaining post-credit event valuations of the reference exposure;
(F) if the derivative contract requires the protection pur-
chaser to transfer an exposure to the protection provider at settlement,
the terms of at least one of the exposures that is permitted to be trans-
ferred under the contract provides that any required consent to transfer
may not be unreasonably withheld; and
(G) if the credit derivative is a credit default swap, the
derivative contract clearly identifies the parties responsible for deter-
mining whether a credit event has occurred, specifies that this determi-
nation is not the sole responsibility of the protection provider, and gives
the protection purchaser the right to notify the protection provider of
the occurrence of a credit event.
(8) (No change.)
1(9) Federal captal adequacy guidelines-The federal ref-
rL1"cimeciitld Ga ta1dquay Aidlinesfo a s hinem'at-Rat-
Ypend ix)t D 42(CRpar 32 {er e Fto 42 part 208in
the ease of a bank that is a member of the Federal Reserve System)}
t -&-) F - d-api-i s -ThefederMsys-
tem for eateuatingabank's equity eapitaland its spee,fiedee n
set forth in Appendix A to 32 C-F-I part 3-24 (or Appendix A to 2
C-F-IR part 208 in the case of a hank that is a member of the Federal
Reserve System)-}
(9) [(-14)] Qualifying central counterparty--As defined in
12 C.F.R. 217.2 in the case of a bank that is a member of the Fed-
eral Reserve System)324.2 (or 12 C.F.R. 217.2 in the case of a bank
that is a member of the Federal Reserve System) [2 of the federal eap-
ita deuygilie].
(10) [(4-2)] Qualifying master netting agreement--As de-
fined in 12 C.F.R. 324.2 (or 12 C.F.R. 217.2 in the case of a bank that
is a member of the Federal Reserve System) [42 of the federal capital
adequacy guidelines].
(11) [(-1-3)] Sale of federal funds--A transaction between
depository institutions involving the transfer of immediately available
funds resulting from credits to deposit balances at Federal Reserve
Banks, or from credits to new or existing deposit balances due from
a correspondent depository institution.
(12) [(44)] Securities financing transaction--A repurchase
agreement, reverse repurchase agreement, securities lending transac-tion, or securities borrowing transaction.
(13) [(--5)] Tier 1 capital--A state bank's unimpaired capital
and surplus. A state bank's Tier 1 capital is calculated under 12 C.F.R.
part 324 (or 12 C.F.R. part 217 in the case of a bank that is a member of
the Federal Reserve System) [the federal risk-based capital standards],
is reported in the bank's most recent call report, and is periodically
re-calculated as provided by 12.11 of this title (relating to Calculation
of Lending Limit).
(14) [(46)] Unimpaired capital and surplus--A state bank's
core capital, equal to its Tier 1 capital calculated under 12 C.F.R. part
324 (or 12 C.F.R. part 217 in the case of a bank that is a member of
the Federal Reserve System) [the federalrisk-based capital standards],
and referred to as Tier 1 capital in this chapter.48 TexReg 6510 November 10, 2023 Texas Register
Upcoming Pages
Here’s what’s next.
Search Inside
This issue can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Periodical.
Texas. Secretary of State. Texas Register, Volume 48, Number 45, Pages 6497-6654, November 10, 2023, periodical, November 10, 2023; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1628491/m1/14/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.