(NAR) VOL. 26 NO. 1/ JANUARY - MARCH 2015
"ยง X611.2 (2008-X602.2) Activities requiring additional derivatives authority. X X X
"a. Classification of additional derivatives authority
"(1) Type 1 - Expanded dealer authority
"X X X
"(2) Type 2 - Limited dealer authority
"A UB or KB may apply for a Type 2 authority. A bank with Type 2 authority may operate as a dealer in specific types of derivatives products with specific underlying reference, as applied for by the bank, outside those financial derivatives instruments under Subsec. X611.1(a)(1): Provided, That a bank with Type 2 authority shall comply with the sales and marketing guidelines prescribed in Appendix 26. The Type 2 authority also carries the authority to transact as broker and end- user of the said specific derivatives instruments.
"A TB with an existing authority to issue foreign letters of credit and pay/accept/negotiate import/export drafts/ bills of exchange under Subsec. 2101.1 may apply for a Type 2 authority to operate as a dealer of deliverable FX forwards in order to service the trade-related hedging requirements of its clients: Provided, That the tenor of the FX forwards dealt shall match the term of the underlying trade transaction: Provided, further, That the applicant bank shall be covered by all regulations prescribing capital for market risk, notwithstanding any provision to the contrary; Provided, furthermore, That the TB shall comply with the sales and marketing guidelines prescribed in Appendix 26. The Type 2 authority also carries the authority to transact as a broker and an end- user of deliverable FX forwards.
"(3) Type 3 - Limited User Authority
"X X X"