Section 703.19 - Investment pilot program(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.(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) Certification that the Federal credit union is "well-capitalized" under part 702 of this chapter;(2) Board policies approving the activities and establishing limits on them;(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) A demonstration of how the activities will affect the Federal credit union's financial performance, risk profile, and asset-liability management strategies;(5) Examples of reports the Federal credit union will generate to monitor the activities;(6) Projections of the associated costs of the activities, including personnel, computer, audit, and so forth;(7) Descriptions of the internal systems that will measure, monitor, and report the activities;(8) Qualifications of the staff and officials responsible for implementing and overseeing the activities; and(9) Internal control procedures that will be implemented, including audit requirements.(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) 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) A description of any risks to a Federal credit union from participating in the program; and(3) Contracts that must be executed by the Federal credit union.(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. 68 FR 32960 , June 3, 2003, as amended at 69 FR 39832 , July 1, 2004; 70 FR 55517 , Sept. 22, 2005