Dodd-Frank Amendments To Sec 23A Are Problematic: Part 2
January 9, 2014, 6:22 PM EST
Law360, New York (January 9, 2014, 6:22 PM EST) -- The “preexisting live” exemption provides that the extension of credit by a member bank to a nonaffiliate will be exempt from the Attribution Rule of Section 23A(a)(2) if (1) the proceeds thereof are used to purchase a security from or through a security affiliate of the bank, and (2) the extension of credit is made pursuant to a preexisting line of credit that was not established in contemplation of such purchase.
Since derivatives are not commonly considered securities, the preexisting line of credit exception does not...
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