Equity-Indexed Certificates of Deposit

Under ASC Topic 815, Derivatives and Hedging (formerly FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended), a certificate of deposit that pays “interest” based on changes in an equity securities index is a hybrid instrument with an embedded derivative that must be accounted for separately from the host contract, i.e., the certificate of deposit. For further information, see the Glossary entry for “Derivative Contracts.” Examples of equity-indexed certificates of deposit include the “Index Powered