Uniform Agreement On The Classification Of Assets And Appraisal Of Securities

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Guidelines for reviewing the treatment of tobacco payment program assets. (SR 05-21) (70 KB) Confidentiality provisions in third-party contracts. (SR 07-19) (15 KB) Any questions regarding this securities classification agreement are addressed to Charles Williams, Risk Specialist, Balance Sheet Management Group, at (202) 649-6294, or williamscc@occ.treas.gov; Kerri Corn, Director, Market Risk Division, (202) 649-6398 or kerri.corn@occ.treas.gov or (202) 649-6360. The 2013 Securities Classification Guidance replaces SR-Brief 04-9, «Revised Uniform Agreement on the Classification of Assets and Appraisal of Securities Held by Banks and Thrifts.» Section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires each federal authority to remove references to external ratings and external rating dependency requirements in any regulation adopted by the Agency, which requires an assessment of the solvency of a money market instrument or instrument. That`s why, in 2012, CCO has revised its investment security rules (12 CFR Part 1) to eliminate dependence on external ratings.1 Investments in securities and equities by member banks of the government are required to comply with the CCO`s investment security rules under the Federal Reserve Act (12 USC 335) and Regulation H (12 CFR 208.21). The edition of this Securities Classification Bulletin removes the 2004-25 OCC, «Uniform Agreement on the Classification of Securities.» As this agreement focuses on the application of investment degree classification standards, the 2004 agreement guidelines for the processing and classification of fair value declines, based on credit ratings, are removed. The agreement does not address the definition of appropriate accounting, for example. B, classification, valuation and other temporary depreciation of securities. Securities accounting is covered within the generally accepted accounting standards in the United States in ASC 320, «Investments – Debt and Equity Securities,» ASC 325, «Investments – Other» and in the instructions and gloss of the Call Report. For questions regarding securities accounting, please contact the OCC Senior Accountant`s office at (202) 649-6280. The CCO`s investment security rules require an institution to monitor the quality of investment credits through an analytical review of the debtor and not just external ratings. Credit quality monitoring allows management to determine whether a security is still an investment level or has deteriorated and therefore requires classification. The 2013 Securities Classification Guide sets out the classification standards for securities held by an institution and provides examples of when a security is a level of investment and when it is not a level of investment.

This agreement does not change the long-standing definitions of asset classification agencies. As in the case of the previous version, auditors may assess and classify credit risk of a property value, regardless of the ratings assigned by the institution or external rating entity, at their own discretion, if the available information on credit risk warrants it. Investment rank securities are no longer defined as one of the four highest credit ratings, but are considered sufficiently capable of repaying the commitment in the purchasing institution`s credit analyses. An issuer has sufficient capacity to meet its financial obligations when the risk of default is low and full and timely repayment of capital and interest is expected. The explanatory language of the agreement provides additional details on the level of investment standards reported in the 2012-18 OCC Bulletin.

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