Statement

Changes to Include Fails Charges in SOMA Securities Lending Program

April 30, 2009

Effective May 1, 2009, the Federal Reserve Bank of New York's Open Market Trading Desk is making the following adjustment to the System Open Market Account's (SOMA) daily securities lending program:

Consistent with the adoption of the Fails Charge Trading Practice, a fails charge, determined in accordance with the Fails Charge Trading Practice published by the Treasury Market Practices Group (Fails Charge) will be assessed for failure to deliver securities related to transactions in SOMA's daily securities lending program. The Fails Charge will be in addition to the existing penalty fee—equal to the prevailing general collateral rate—assessed for failure to deliver collateral and for failure to re-deliver borrowed securities under the current program terms. All other program terms remain unchanged.