§ 53.203   Structural and transactional requirements.

   (a) Operational independence. A section 272 affiliate and the BOC of which
   it  is  an  affiliate shall not jointly own transmission and switching
   facilities or the land and buildings where those facilities are located.

   (b) Separate books, records, and accounts. A section 272 affiliate shall
   maintain books, records, and accounts, which shall be separate from the
   books,  records,  and accounts maintained by the BOC of which it is an
   affiliate.

   (c) Separate officers, directors, and employees. A section 272 affiliate
   shall have separate officers, directors, and employees from the BOC of which
   it is an affiliate.

   (d) Credit arrangements. A section 272 affiliate shall not obtain credit
   under any arrangement that would permit a creditor, upon default, to have
   recourse to the assets of the BOC of which it is an affiliate.

   (e) Arm's-length transactions. A section 272 affiliate shall conduct all
   transactions with the BOC of which it is an affiliate on an arm's length
   basis, pursuant to the accounting rules described in § 32.27 of this chapter,
   with any such transactions reduced to writing and available for public
   inspection.

   [ 62 FR 2967 , Jan. 21, 1997, as amended at  69 FR 16496 , Mar. 30, 2004;  70 FR 55302 , Sept. 21, 2005]

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