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in paragraph 8 that INC "shall have no authority to act for,
represent, bind or obligate" LTD as to the matters covered by the
instructions. We therefore conclude that INC had “the authority
for and in the name of LTD” to carry out the acts specified in
the Agreement pursuant to LTD’s instructions, including, inter
alia, purchasing, selling, and dealing in instruments or
evidences of indebtedness by whomsoever issued. INC alone
performed the purchase, sale, and redemption of the instruments
and evidences of indebtedness. Accordingly, we conclude that,
pursuant to its Agreement with LTD, INC had "the authority to
negotiate and conclude contracts" in the name of the foreign
corporation LTD within the meaning of section 1.864-7(d)(1)(i),
Income Tax Regs.
Nonetheless, we must consider whether INC "regularly
exercised" its authority to negotiate and to conclude contracts
in LTD’s name, whether such authority was limited to unusual
cases, and whether such authority was separately secured for each
transaction effected within the meaning of section 1.864-
7(d)(1)(ii), Income Tax Regs. For LTD’s certificates of deposit
and term deposits operation, the executive committee of Inver
Group established criteria (relating to the bank’s size, equity,
profitability, size of deposits, assets and liabilities ratios,
and standing with the FDIC or FSLIC) to guide INC in selecting
banks from which to purchase certificates of deposit and term
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