The ABA Securities Association yesterday offered feedback to the OCC on a proposed rule that would prohibit national banks from dealing or investing in industrial and commercial metal, such as copper cathodes or aluminum T-bars. The rule would supersede a prior OCC determination permitting national banks to trade copper cathodes.
The association supported several aspects of the proposed rule — including those confirming that certain types of metal inventory financing that are structured through a purchase and sale of metal, as well as transitory title transfers of metal, are permissible. However, ABASA noted that the proposal creates confusion by not confirming the permissibility of other common financing activities, such as leases, consignments, market-based reverse repurchase agreements, and called on the OCC to further clarify. In addition, ABASA urged the OCC to confirm that the use of unallocated metal accounts, cash settlements and transitory title transfers would not be treated as physical holdings. For more information, contact ABA’s Jason Shafer or Cecelia Calaby.
