AL 96-5  
Subject:  Forward Repurchase Agreement Transactions

TO:  Chief Executive Officers of all National Banks, Department
     and Division Heads, and all Examining Personnel


This advisory is being sent to inform national banks that the
Department of the Treasury's Bureau of the Public Debt has issued
the attached interpretive letter to clarify the requirements
under the Government Securities Act for forward repurchase
agreement transactions (forward repos).  In the Department's
view, repurchase agreements that settle in a next-day or longer
time frame are regarded as forward repos.  The interpretive
letter also addresses the recordkeeping requirements and
guidelines that the Public Securities Association (PSA) adopted
for confirming forward repos.  National banks and examiners
should note that, although the PSA suggests sending an additional
confirmation on trade date, this is not required under 12 CFR 12,
Recordkeeping and Confirmation Requirements for Securities
Transactions, but simply reflects an industry practice.

At the request of the Bureau of the Public Debt, the OCC is
forwarding the Bureau's interpretive letter to all national banks
and examining personnel.  For further information contact Joseph
W. Malott, national bank examiner, Capital Markets, (202) 874-5070.  If your bank has questions or needs an interpretation of
the GSA regulations, you may call or write the Bureau of the
Public Debt, Government Securities Regulations Staff, Washington,
DC, 20239, (202) 219-3632.




                                     
Jimmy F. Barton
Chief National Bank Examiner
Date:     July 19, 1996  

Attachment