12 CFR §703.19

1. (a)Under the investment pilot program, NCUA will permit a limited number of Federal credit unions to engage in investment activities prohibited by this part but permitted by the Act.
2. (b)Except as provided in paragraph (c) of this section, before a Federal credit union may engage in additional activities it must obtain written approval from NCUA. To obtain approval, a Federal credit union must submit a request to its regional director that addresses the following items:
   1. (1)Certification that the Federal credit union is “well-capitalized” under part 702 of this chapter;
   2. (2)Board policies approving the activities and establishing limits on them;
   3. (3)A complete description of the activities, with specific examples of how they will benefit the Federal credit union and how they will be conducted;
   4. (4)A demonstration of how the activities will affect the Federal credit union's financial performance, risk profile, and asset-liability management strategies;
   5. (5)Examples of reports the Federal credit union will generate to monitor the activities;
   6. (6)Projections of the associated costs of the activities, including personnel, computer, audit, and so forth;
   7. (7)Descriptions of the internal systems that will measure, monitor, and report the activities;
   8. (8)Qualifications of the staff and officials responsible for implementing and overseeing the activities; and
   9. (9)Internal control procedures that will be implemented, including audit requirements.
3. (c)A third-party seeking approval of an investment pilot program must submit a request to the Director of the Office of Capital Markets and Planning that addresses the following items:
   1. (1)A complete description of the activities with specific examples of how a credit union will conduct and account for them, and how they will benefit a Federal credit union;
   2. (2)A description of any risks to a Federal credit union from participating in the program; and
   3. (3)Contracts that must be executed by the Federal credit union.
4. (d)A Federal credit union need not obtain individual written approval to engage in investment activities prohibited by this part but permitted by statute where the activities are part of a third-party investment program that NCUA has approved under this section.