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AAP Exam Study Cards > Fedwire Funds & Securities Services > Flashcards

Fedwire Funds & Securities Services Flashcards

1
Q

Who operates two critical wholesale services for direct participation of Fedwire Funds and Securities Services.

A

The Federal Reserve Banks

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2
Q

This service is processed transfer-by-transfer

A

Fedwire Funds Service

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3
Q

How are all Fedwire transactions confirmed with the sending depository institution?

A

Through an Acknowledgment message

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4
Q

How are all Fedwire transactions confirmed with a receiving depository institution?

A

Through a notification message

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5
Q

Who are eligible to use Fedwire services?

A

Depository institutions that maintain a reserve or clearing account with a Federal Reserve Bank.

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6
Q

Fedwire service that supports high transaction volumes by creating a direct connection between the Federal Reserve Bank’s computer system and Fedwire using Internet-protocol technology.

A

FedLine Direct

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7
Q

Is a web-based access solution. Transfer instructions are created by the sending depository institution and electronically transmitted to the Federal Reserve Banks for processing. It is primarily used by mid-and low-volume institutions.

A

FedLine Advantage

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8
Q

This Fedwire service is more costly and is primarily used by institutions with infrequent transfer needs or for contingency access.

A

Off-line Fedwire

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9
Q

This service provides immediate finality and irrevocability of settlement once transfer is processed by Federal Reserve Banks.

A

Fedwire Funds Service

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10
Q

Is a real-time gross settlement system used to settle interbank funds transactions such as federal funds purchases, corporate payments and other large value payments.

A

Fedwire Funds Service

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11
Q

Transfers are processed individually, in real-time, and settled by debiting the Federal Reserve Bank account of the sending depository institution and simultaneously crediting the federal Reserve bank account of the receiving depository institution.

A

Fedwire Funds Service

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12
Q

The two Fedwire services are centralized and consist of two operational components… What are they?

A
  1. Computer applications that process and record individual funds and securities transfers as they occur.
  2. National communications network that electronically links the Federal Reserve Banks with depository institutions.
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13
Q

This service is a credit/push system in which only originating/sender bank can remove funds from its Federal Reserve Bank Account.

A

Fedwire Funds Service

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14
Q

What are the Fedwire Funds Service hours?

A

Business day begins at 9:00 PM Eastern Time on the preceding calendar day and ends at 7:00 PM ET.

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15
Q

What is the deadline for initiating on-line third-party transfers?

A

6:45 PM ET, after which participants may only initiate transfers on its own behalf.

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16
Q

Off-line transfers generally cannot be initiated during which times?

A
  • Before 9:00AM ET
  • After 6:30PM ET
  • After 6:15PM ET for third-party transfers
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17
Q

Real time, delivery vs payment, gross settlement system

A

Fedwire Securities

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18
Q

This service allows for electronic issuance, transfer and maintenance of being issued by US Treasury, Federal Government agencies, Government sponsored enterprise, and certain international organizations.

A

Fedwire Securities

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19
Q

When do Fedwire Securities services operate to initiatae on-line securities transfers?

A

from 8:30 AM to 3:15 PM ET, Monday through Friday

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20
Q

When do Fedwire Securities services operate to initiatae on-line securities reversals?

A

from 8:30 AM to 3:30 PM ET, Monday through Friday

21
Q

On-line participants may move securities against payment among their own securities accounts with the Federal Reserve Banks until what time?

A

4:30PM ET, and until 7:00 PM ET free of payment.

22
Q

Off-line Securities services may be initiated between what hours for same day processing?

A

9:00 AM and 1:30 PM ET, Monday through Friday

23
Q

Off-line Securities services may be initiated between what hours for same future- day processing?

A

9:00 AM and 4:00PM ET, Monday through Friday

24
Q

This means the system settles each transfer individually, rather than processing by batch.

A

Gross Settlement

25
Q

What is the system called when it processes each transaction as it is initiated?

A

real time environment

26
Q

Specifies the terms under which the Federal Reserve Banks will accept checks and other items for collection and present them for collection to the institutions upon which they are drawn. It also establishes guidelines for the return of unpaid checks, and the receipt and delivery of funds via Fedwire.

A

Regulation J

27
Q

covers funds transferred through the Federal Reserve’s wire transfer system, Fedwire. It establishes rules governing these transfers and authorizes the Federal Reserve to debit a sender’s account in order to obtain payment for a transfer sent over the Fedwire system.

A

Regulation J: Subpart B

28
Q

Governs the Fedwire Funds Service

A

Operating Circular 6

29
Q

sets forth the requirements that credit unions make funds deposited into transaction accounts available according to specified time schedules and that they disclose their funds availability policies to their members. It also establishes rules designed to speed the collection and return of unpaid checks.

A

Regulation CC

30
Q

Who governs the US government securities market?

A

Department of Treasury and the Government Securities Act (GSA)

31
Q

contains the terms under which the Federal Reserve Banks maintain securities accounts and effect transfers of book-entry securities for participants.

A

Operating Circular 7

32
Q

Sets out rules regarding the rights and obligations of entitlement holders, securities intermediaries and other parties in both direct and indirect systems for holding securities.

A

UCC Article 8

33
Q

Governs the rights and obligations of parties to a secured transaction

A

UCC Article 9

34
Q

If a bank holds more fed funds than is required to cover its Regulation D reserve requirement, those excess reserves may be lent to another financial institution with an account at a Federal Reserve Bank. To the borrowing institution, these funds are?

A

federal fund purchase

35
Q

This participant is a sender of first payment order in funds or securities transfer

A

Originator

36
Q

This participant initiates the transfer and is a bank to which the payment order of originator is issues.

A

Originating/Sender Bank

37
Q

Entity that processes and settles Fedwire funds transfers and book-entry securities transfers at instruction of participants

A

Federal Reserve Bank

38
Q

This Participant is identified in payment order to be credited pursuant to order

A

Beneficiary’s Bank

39
Q

This participant is the person to be paid

A

Beneficiary

40
Q

This Regulation deals with remittance transfers.

A

Regulation E - Subpart B

41
Q

This Regulation deals with Funds transfers through Fedwire

A

Regulation J - Subpart B

42
Q

This legal framework deals with wholesale credit funds transfers not governed by Regulation E.

A

Uniform Commercial Code Article 4A

43
Q

This Legal Framework deals with funds transfers through Fedwire Funds Service.

A

Federal Reserve Bank Operation Circular 6

44
Q

This legal framework deals with opening, maintaining and terminating a master account with a Federal Reserve Bank

A

Federal Reserve Bank Operating Circular 1

45
Q

This Regulation Governs Funds availability

A

Regulation CC

46
Q

This Legal Framework deals with recordkeeping requirements/travel rule

A

Bank Secrecy Act - 31 CFR 103

47
Q

This administration and enforcement of economic and trade sanctions based on U.S. Foreign policy.

A

OFAC

48
Q

This service is a debit pull system with regards to payments.

A

Fedwire Securities

  • Sender initiates transfer
  • Automatically debits payment from Beneficiary Bank’s Federal Reserve Bank Account.

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