12 CFR § 703.104 - Requirements for Counterparty agreements, collateral and Margining.

---
identifier: "/us/cfr/t12/s703.104"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "12 CFR § 703.104 - Requirements for Counterparty agreements, collateral and Margining."
title_number: 12
title_name: "Banks and Banking"
section_number: "703.104"
section_name: "Requirements for Counterparty agreements, collateral and Margining."
chapter_name: "NATIONAL CREDIT UNION ADMINISTRATION"
subchapter_number: "A"
subchapter_name: "REGULATIONS AFFECTING CREDIT UNIONS"
part_number: "703"
part_name: "INVESTMENT AND DEPOSIT ACTIVITIES"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "12 U.S.C. 1757(7), 1757(8), 1757(14) and 1757(15)."
regulatory_source: "68 FR 32960, June 3, 2003, unless otherwise noted."
cfr_part: "703"
---


# 703.104 Requirements for Counterparty agreements, collateral and Margining.

To enter into Derivative transactions under this subpart, a Federal credit union must:

(a) Have an executed Master Services Agreement with a Counterparty. Such agreement must be reviewed by counsel with expertise in similar types of transactions to ensure the agreement reasonably protects the interests of the Federal credit union;

(b) Use only the following Counterparties:

(1) For exchange-traded and cleared Derivatives: Swap Dealers, Introducing Brokers, and/or FCMs that are current registrants of the CFTC; or

(2) For Non-cleared Derivative transactions: Swap Dealers that are current registrants of the CFTC.

(c) Utilize contracted Margin requirements with a maximum Margin threshold amount of $250,000; and

(d) For Non-cleared Derivative transactions, accept as eligible collateral, for Margin requirements, only the following: Cash (U.S. dollars), U.S. Treasuries, government-sponsored enterprise debt, U.S. government agency debt, government-sponsored enterprise residential mortgage-backed security pass-through securities, and U.S. government agency residential mortgage-backed security pass-through securities.