December 2, 2011 
This document sets forth the criteria for acceptance of a bank or savings association as a counterparty eligible to participate in reverse repurchase transactions (RRP) with the Federal Reserve Bank of New York (FRBNY). FRBNY may engage in RRP, if at all, at the direction of the Federal Open Market Committee (FOMC).

In any such RRP, FRBNY will sell securities held in the System Open Market Account (SOMA) to counterparties subject to an agreement to repurchase them at some future date. FRBNY will use the existing industry tri-party infrastructure to undertake any such RRP. In addition, as with current operations, FRBNY intends to use an auction format for awarding transactions to counterparties.¹

Upon submission of an application and acceptance of that application by FRBNY, an applicant will be added to a public list, maintained on FRBNY's website, of RRP counterparties. Inclusion on such list simply means that the entity is eligible to engage in RRPs with FRBNY. It does not mean that the entity is eligible for any other program or transactional relationship with FBRNY. It does not in any way constitute a public endorsement of that entity by FRBNY, nor should such inclusion be viewed as a replacement for prudent counterparty risk management and due diligence. FRBNY reserves the right to amend its list of RRP counterparties at any time and for any reason at its sole discretion. FRBNY reserves the right to disclose information regarding the RRP counterparties. Details of transactions undertaken with RRP counterparties will be disclosed in accordance with the requirements of Section 1103 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. That legislation requires the disclosure of certain information regarding open market transactions between a Federal Reserve Bank and nongovernmental entity that have been authorized under specified provisions of Section 14 of the Federal Reserve Act, which would include RRPs.

I. Initial Eligibility² 
To be accepted as an RRP counterparty, an applicant must:

A. Be a bank (including a U.S. branch or agency of a non-U.S. bank) or savings association eligible to receive interest on balances maintained at the Federal Reserve Banks;

B. Have net assets of no less than $30 billion on September 30, 2011, or have reserve balances of no less than $10 billion on September 30, 2011, the last quarter for which the relevant reports are available³;

C. Have been in existence for at least one year prior to the submission of the application;

D. Be currently set-up to operate in the tri-party repo market (in particular, in transactions collateralized by U.S. government debt, agency debt, and agency mortgage-backed securities);

E. Execute the requisite RRP documentation including FRBNY's Master Repurchase Agreement, triparty custody documentation and other documentation, as applicable;

F. Satisfy the following transaction requirements: (a) execute RRP with securities margined at 100% (i.e. the value of the securities provided by FRBNY will equal the funds provided by the counterparty), (b) execute term RRPs, with tenors of one-week or longer, (c) submit minimum bids of $250 million or greater, and (d) execute RRPs for next day settlement;

G. Meet hardware and software requirements for accessing and using FRBNY's auction system and participate in testing;

H. Have a compliance program consistent with the applicable regulatory requirements (FRBNY will not accept any applicant as an RRP counterparty if it is or has been within the prior year, subject to litigation, regulatory action, or investigation that FRBNY, at its sole discretion, determines material or otherwise relevant to the potential counterparty relationship. In making such determination, FRBNY will consider, among other things, the stage of any such matters and the applicant's history of regulatory compliance.); and

I. Satisfy an FRBNY counterparty review (FRBNY will not accept as an RRP counterparty any applicant that, in FRBNY's judgment, poses undue risks to the integrity, reputation, or assets of FRBNY).

II. Continued Eligibility 
FRBNY may remove an entity from the RRP counterparty list, or otherwise cease to enter RRP with such counterparty, for any reason including if such counterparty:

A. No longer satisfies the eligibility criteria A, E, F, G and H listed in Section I (including FRBNY's ongoing satisfaction with the counterparty's financial condition and its compliance and internal controls);

B. Fails to provide FRBNY, on a timely basis, with any information that FRBNY deems necessary to determine that the counterparty continues to satisfy the eligibility criteria listed in Section I;

C. Becomes subject to regulatory or legal proceedings that, in the sole judgment of FRBNY, unfavorably impacts the counterparty relationship;

D.  Poses, in FRBNY's sole judgment, undue risks to the integrity, reputation, or assets of FRBNY; or

E. Does not, in FRBNY's sole judgment, meaningfully participate in RRP transactions with FRBNY over a period of time.

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¹ The auction may be single or multiple price, to be determined by FRBNY. In addition, as with current RRP operations, FRBNY may, at its sole discretion, cap or limit any counterparty's awards in a particular auction or its total outstanding RRPs with the FRBNY, exclude a counterparty from any particular auction, and/or reject, in whole or in part, any counterparty's bids.
² The eligibility criteria for the RRP program are established by FRBNY and may be changed at its sole discretion. Final determination of whether an applicant is eligible to participate in the RRP program will be made by FRBNY at its sole discretion.
³ FFIEC form 031 for domestic banks, FFIEC form 002 for U.S. branches and agencies of foreign banks, Thrift Financial Report for savings associations.