Full text of District Notices (Federal Reserve Bank of Dallas) : Operating Circular 16 (Electronic Access), Notice 92-122

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F ederal R eserve Bank
OF DALLAS
TO N Y J . SA L V A G G IO
FIR S T V IC E PR E S ID E N T

December

18,

1992

D a lla s ,te x a s

75222

Notice 92-122
TO:

The Operating Officer at each
financial institution in the
Eleventh Federal Reserve District
SUBJECT
Operating Circular 16
(Electronic Access)
DETAILS

The Federal Reserve Bank of Dallas has begun renaming and reissuing
its Bulletins as Operating Circulars in order to conform to the language used
in the Uniform Commercial Code. Bulletin 16 is being reissued as Operating
Circular 16 (Electronic Access).
In connection with this reissue, Operating Circular 16 has been
completely rewritten as a uniform policy circular for the Federal Reserve
System. Previous versions were issued by the Federal Reserve Bank of Dallas
and only applied to electronic connections with this Bank. The new Operating
Circular is standard for and applies to electronic connections to any Federal
Reserve Bank. There are no substantive changes.
ENCLOSURE

Enclosed is Operating Circular 16. Please file it in your Operating
Circulars (Bulletins) binder and discard the old version.
MORE INFORMATION

For more information regarding electronic access, please contact the
persons listed below at the Dallas Office:
Vannecie Will is

(214) 922-6455

or

(800) 333-4460, ext. 6455

Jonnie Miller

(214) 922-6433

or

(800) 333-4460, ext. 6433

Larry Ripley

(214) 922-6429

or

(800) 333-4460, ext. 6429

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas:
Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162,
Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

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2

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For additional copies of this Bank’s notice or Operating Circular
16, please contact the Public Affairs Department at (214) 922-5254.
Sincerely,

r

Operating Circular
F e d e r a l

R e s e r v e

B a n k

of

D a l l a s

16

Electronic Access

#

Scope
Operating Circular 16 sets forth the terms and conditions applicable to the use of electronic
terminals, equipment, and software to access services provided by this Bank on the RESPONSE
network.

ii

F e d e ra l R ese rve B a n k of D allas

12-92

W t if Courts’»
ELECTRONIC ACCESS
Paragraphs
G eneral...................................................................................................

1-4

Participant's Equipment and Software........................................................... 5
Communication Lines.................................................................................... 6
Federal Reserve Bank-Supplied Equipment and Software............. 7-14
Risk and Liability in Use of Electronic Connections........................ 15-20
Fees and Taxes....................................................................................... 21-23
Termination....................................................................................... 24-25
Right to Am end................................................................................................ 26

12-92

F e d e ra l R ese rve B a n k of D allas

iii

P a r t i c i p a n t ’s E q u i p m e n t
a n d So f t w a r e

General
1. This Operating Circular, as well as any
appendix, exhibit, or supplement to it, sets forth
the terms under which a depository institution
or other authorized institution (“Participant”)
may access certain services provided by the
Federal Reserve Bank of Dallas and may send to
us or receive from us certain data by means of
electronic connections. For purposes of this
circular, “electronic connections” refers to
communication facilities, other than telephone
voice-response systems, used to exchange data
between a Participant’s computer(s), including
terminal(s), and our computer(s).
2. The services that may be accessed using
electronic connections are, for example, transfers
of funds and securities, commercial and govern­
mental automated clearinghouse transactions,
notifications of nonpayment of checks, orders
for cash and savings bonds, transmission of our
data (such as check information, federal tax
payment advices, and statements of account) to
Participants, and Participants’ transmission of
data (such as statistical and financial reports and
Treasury Tax and Loan reports) to us. We may,
from time to time, offer other services using
electronic connections. By accessing any of the
services using electronic connections, a Partici­
pant agrees to abide by the terms and conditions
of this Operating Circular and any appendix,
exhibit, or supplement to it.
3. This Operating Circular does not supersede
the Operating Circulars, regulations, or instruc­
tions governing particular types of transactions;
it only governs the use of electronic connections
to effect such transactions. A Participant that
accesses any of our services, or that sends to us or
receives from us any data, by means of electronic
connection agrees to the terms of this Operating
Circular.
4. Participant’s written request and our prior
written approval are required before (a) a
Participant uses an electronic connection for
access to any of our services or to send any data
to us; (b) a Participant shares the use of an
electronic connection with another Participant
or has any other party act as its agent in sending
or receiving transfers or other messages; or (c) a
Participant sublicenses, assigns, or transfers any
of its rights, duties, or obligations under this
Operating Circular.

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5. Each Participant is responsible for maintain­
ing compatibility of its computer(s) and associ­
ated equipment and software with our require­
ments, as amended from time to time, and for
maintaining its own equipment. We reserve the
right to approve each Participant’s equipment
and software for compatibility.

C o m m u n i c a t i o n L in e s
6. A Participant may choose, where available, an
electronic connection that utilizes a dial (or
switched) circuit, multidrop leased circuit, or
dedicated (point-to-point) leased circuit. If the
volume of data sent or received exceeds our
guidelines for a type of line, we may require an
upgrade, such as from a dial circuit to a
multidrop leased circuit.

F e d e r a l R e s e r v e B a n k -S u p p l i e d
Eq u ip m e n t a n d So f t w a r e
7. We may arrange for the delivery and installa­
tion of modems, encryption devices, and other
equipment necessary for electronically connect­
ing a Participant’s computer(s) to our network,
and we will repair or replace as soon as practi­
cable any such equipment that malfunctions.
Our equipment may not be altered, encumbered,
relocated, or removed except with our prior
written approval.
8. We provide, on request, either the Computer
Interface Protocol Specification or the software
(including updates, modifications, and docu­
mentation) to enable a Participant’s computer to
connect to our network. We provide one copy of
our software for each computer directly con­
nected to our network, and we may provide one
copy for each terminal used for data entry and
export to a computer directly connected to our
network. We grant the Participant a nonexclu­
sive, nontransferable license to use our software
for the purposes stated in this Operating Circu­
lar. We also supply log-on identifications (log-on
IDs), encryption keys, and user manuals; and we
may provide training to a Participant’s employ­
ees in the use of our software.
9. We warrant that we have the right to license
or sublicense our software. Also, we shall
indemnify and hold any Participant harmless
from any loss or expense arising from any claim
that our software infringes a patent, copyright,

F e d e ra l R ese rve B a n k of D allas

Operating
Circular

16

trademark, or other proprietary right of any third
party if we are given prom pt written notice of the
claim, if we have sole control of the defense of
the claim and of any settlement negotiations, and
if the Participant cooperates fully with us in the
defense and negotiations.
10. A Participant shall not, except with our prior
written consent,
A. modify, add to, transfer, reverseassemble, or reverse-compile our
software;
B. use our software other than on a
computer(s) for access to our network
or on a terminal(s) used for entry of data
that are to be exported to such a com­
puter; all such computers and terminals
should be located on the Participant’s
premises;
C. copy our software except for use consis­
tent with subparagraph B and except for
backup purposes; all copies shall include
our copyright and proprietary notices
externally in the distribution medium
and internally in machine-readable
form; or
D. remove any copyright notices contained
in our software.
11. Our equipment and software are furnished
strictly on an as-is basis. We do not warrant that
operation of our equipment or software will
meet a Participant’s planned applications, that
our equipment or software will be compatible
with Participant-owned equipment, or that all
equipment or software defects can be corrected.
O ur sole obligation in the event of a malfunction
in our equipment or software is to provide
reasonable assistance to a Participant in resolving
problems or to replace defective or damaged
equipment or software that a Participant returns
to us. THE OBLIGATIONS AND THE WAR­
RANTY SET FORTH IN THIS PARAGRAPH
AND IN PARAGRAPHS 7 AND 9 ARE EX­
CLUSIVE AND IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO IM­
PLIED WARRANTIES OF MERCHANTABIL­
ITY AND FITNESS FOR A PARTICULAR
PURPOSE AND ANY OTHER WARRANTY
ARISING BY STATUTE OR FROM A
COURSE OF DEALING OR USAGE OF
TRADE.

2

12. Our software includes trade secrets and
proprietary information of this Reserve Bank and
others, which may or may not be copyrighted or
patented. Disclosure of our software would likely
cause us immediate and irreparable damage for
which there may be no adequate remedy at law.
Each Participant shall treat our software and
documentation as confidential information,
protecting them with at least the same degree of
care the Participant uses to protect its own
confidential information. Each Participant shall
take all necessary steps with its employees and
agents to enforce this obligation; a Participant
shall notify us immediately by telephone, with
written confirmation, of any unauthorized
disclosure or use of our software of which the
Participant is aware and shall use its best efforts
to prevent further unauthorized disclosure or
use.
13. Our software is provided either on diskettes
or through data transmission facilities. The
diskettes have been duplicated by us or by
outside suppliers that we believe use equipment
protected by commercially reasonable technol­
ogy to prevent the introduction of viruses and
other defects. We test random samples of
diskettes obtained from vendors, using virusdetection software that we believe is commer­
cially reasonable. However, it is not feasible for
us to test all such diskettes, and our virusdetection software may not detect all viruses or
other defects. Our data transmission facilities are
also protected by what we believe is commer­
cially reasonable technology to prevent the
introduction of viruses and other defects.
14. Each Participant shall take all commercially
reasonable precautions to prevent the introduc­
tion of computer viruses or other defects that
might disrupt the operations of our computers
or those of other Participants.

RISK AND LIABILITY IN USE OF
El e c t r o n ic C o n n e c t i o n s
15. Each Participant acknowledges that its
electronic connection and our software, dis­
kettes, encryption keys, log-on IDs, passwords,
and other access controls can be used to origi­
nate funds and other value messages as well as
non-value messages. Each Participant assumes
sole responsibility for and the entire risk of use
and operation of its electronic connection and
related items, and the Participant agrees that we
may act on any message that we receive through
an electronic connection and subsequently

F e d e ra l R e s e rv e B a n k of D allas

12-92

authenticate as the Participant’s under our
procedures, to the same extent as though we
have received written instructions bearing the
manual signature of a duly authorized officer of
the Participant. It is also agreed that we are not
liable for delays, errors, or omissions in the
transmission of messages to or from the Partici­
pant, resulting from imperfections in the equip­
ment or lines or otherwise beyond our control.
16. Our liability in connection with payment
orders (as defined in Article 4A of the Uniform
Commercial Code) is as set forth in Subpart B of
Regulation J; our Operating Circular 6, Wire
Transfers of Funds; and our Operating Circular
11, Automated Clearinghouse Operations. With
respect to our liability in other areas, nothing in
paragraph 15 shall be construed to relieve us
from responsibility for our own failure to
exercise ordinary care or to act in good faith,
except that our liability is strictly limited to
damages proximately suffered by a Participant
and does not extend to lost profits, claims against
a Participant by others, or other consequential or
incidental damages, even if we have been in­
formed of the possibility of such damages.

data electronically. Accordingly, Participants
should be prepared to send or receive payments
or other data by other means.

Fees a n d T a x e s
21. Our fees for electronic access services (for
example, installation support, connection, and
equipment lease) are published separately and
are subject to change on 30 calendar days’ notice.
We may charge the account maintained or used
by a Participant on our books for the am ount of
such fees.
22. If, because of failure of a Participant’s
equipment, either this Bank or the Participant
reverts to an Offline Security Procedure, we
reserve the right to charge our offline fees.
23. Each Participant is liable for the payment of
any taxes, however designated, levied on its
possession or use of equipment or software that
we have supplied, including (without limitation)
state and local sales, use, value-added, and
property taxes.

T e r m in a t io n
17. Each Participant shall conform to the
security procedures, operating instructions,
guidelines, and specifications for interconnection
that we specify from time to time. We make no
warranties with respect to such procedures and
specifications, or otherwise, in relation to the use
of an electronic connection.
18. Each Participant agrees to keep our security
procedures confidential and not disclose them to
third parties or to its employees except on a
need-to-know basis. A Participant shall notify us
immediately by telephone, with written confir­
mation, of any suspected fraud, infringement,
or security breach relating to its electronic
connection(s).
19. Each Participant should manage its elec­
tronic connection(s) so as to permit us to send
transfers and messages to it on a timely basis
throughout the day. We are not responsible for
any delay in sending a transfer or other message
to a Participant (or for notifying any party of
such a delay) if the delay results from the
Participant’s failure to so manage its
connection(s).
20. Problems with hardware, software, or data
transmission may, on occasion, delay or prevent
us from sending or receiving payments or other
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24. A Participant may terminate its agreement to
participate in services through electronic connec­
tions and may terminate its agreement to the
terms of this Operating Circular with 30 calendar
days’ advance written notice. We may terminate
a Participant’s authority to use an electronic
connection with similar notice. We may also
terminate a Participant’s authority and take
possession of our equipment and software at any
time if we believe that the Participant is in
violation of this Operating Circular.
25. Upon termination, a Participant shall
promptly return all Reserve Bank-supplied
equipment and software (including software
documentation) and shall delete any installed
copies of such software. A Participant’s obliga­
tions pertaining to confidentiality and non­
disclosure shall survive any termination of its
agreement to this Operating Circular.

R ig h t t o A m e n d
26. We reserve the right to amend this Operat­
ing Circular at any time but will endeavor to
give at least 30 calendar days’ notice to each
Participant.

F e d e ra l R ese rve B a n k of D allas