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Department of Professional and Financial Regulation
State of Maine
May 22, 1981


To the Chief Executive Officer Addressed:

Numerous questions have been asked regarding participation in the futures and forward contract markets. The Bureau believes that financial futures can be used by banks to advantage; however, it is felt that financial institutions should do so in accordance with safe and sound banking practices. The suggested guidelines are as follows:

  1. The Board should establish specific written authorization to engage in futures contracts and adopt a comprehensive written policy. This written policy should include, but not be limited to, the following considerations:
    1. maximum maturities
    2. type of futures contract
    3. maximum amount of funds invested
    4. provision for periodic review
    5. trading procedures
    6. periodic reports
    7. internal audit programs
  2. The participation is to be used to hedge portions of the portfolio against interest rate risk.
  3. The institution should utilize the services of a person or persons knowledgeable of this field.

/s/ Roy L. Gove

Deputy Superintendent

Last Updated: June 5, 2013