(a) Purpose. This subpart allows Federal credit unions to enter into certain derivatives transactions exclusively for the purpose of reducing interest rate risk exposure.

(b) Scope.

(1) This subpart applies to all Federal credit unions. Except as provided in §741.219, this rule does not apply to federally insured, state-chartered credit unions.

(2) Mutual funds. This subpart does not permit a Federal credit union to invest in registered investment companies or collective investment funds under §703.14(c) of this part, where the prospectus of the company or fund permit the investment portfolio to contain derivatives.