NCUA Approves Request To Short-SellTreasuries

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ALEXANDRIA, Va. - (07/21/06) -- The NCUA Board approved a pilotinvestment program Thursday that will allow Bank Fund Staff FCU tosell Treasury securities. The program, approved in closed meeting,will allow the $2 billion credit union to bet on rising interestrates. With short selling, an investor sells securities he or shedoesn't own, with an agreement to deliver the securities at apre-arranged price. If interest rates go up, short-sellers in theTreasury market, will make money. Short-selling is a permittedactivity under the Federal CU Act, but not under NCUA's rules andregulations. NCUA will be posting standards for the short-sellingprogram on its website.

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