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OCC Bulletin 2014-25 | May 28, 2014

Collective Investment Funds: Comptroller's Handbook Booklet Revision and Rescission

To

Chief Executive Officers and Asset Management Personnel of All National Banks and Federal Savings Associations, Department and Division Heads, All Examining Personnel, and Other Interested Parties

Summary

The Office of the Comptroller of the Currency (OCC) issued today the "Collective Investment Funds" booklet of the Comptroller's Handbook. This revised booklet replaces a similarly titled booklet issued in October 2005.

This booklet provides updated guidance to examiners and bankers on collective investment funds offered to customers of national banks and federal savings associations; explains the risks inherent in such products and services; and provides a framework for managing those risks.

Highlights

Specifically, this booklet

  • updates examination procedures and groups them by risk. The expanded examination procedures supplement the core assessment standards in the "Large Bank Supervision" and "Community Bank Supervision" booklets of the Comptroller's Handbook.
  • updates and expands the Risk Management section. The expanded section provides examples of effective investment risk management processes and provides more detailed explanation of collective fund benchmarks, valuation, and securities lending.
  • updates the audit and financial reports discussion.
  • updates references.
  • adds a discussion of board and senior management responsibilities regarding oversight of risk management.

Note for Community Banks

This booklet applies to all banks that offer collective investment funds. A community bank's board and management should identify the material risks associated with the provision of collective investment funds and establish a risk management system that effectively assesses, measures, monitors, and controls those risks.

With the issuance of this booklet, the following guidance has been rescinded:

  • OCC Banking Circular 247, "Application of Securities Laws to Common Trust Funds," September 12, 1990.

For further information, contact Joel Miller, Asset Management Group Leader, Credit and Market Risk Division, at (202) 649-6360.

John C. Lyons Jr.
Senior Deputy Comptroller and Chief National Bank Examiner

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