Summary: | The FDIC has issued the attached Notice of Proposed Rulemaking (NPR) that would establish recordkeeping requirements for qualified financial contracts (QFCs) held by insured depository institutions in a troubled condition, as defined in the proposed rule. Comments on the NPR are due by September 26, 2008. This NPR would implement certain statutory authority for purposes of the FDIC's meeting its statutory obligations regarding the treatment of QFCs in the event of its appointment as receiver of a failed insured depository institution. The proposed rule and appendix would require an institution in a troubled condition, upon written notification by the institution's appropriate federal banking agency or the FDIC, to produce immediately at the close of processing of the institution's business day for a period provided in that notification electronic files for (1) certain position level and counterparty level data and (2) certain QFC counterparty and portfolio identifiers, in addition to other required QFC-related information in either electronic or written files. |
Highlights:
Continuation of FIL-75-2008 Distribution: Suggested Routing: Note: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877- 275-3342 or 703-562-2200).
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Financial Institution Letters FIL-75-2008 August 6, 2008 | ||||
Recordkeeping Requirements for Qualified Financial Contracts The Federal Deposit Insurance Corporation (FDIC) has issued the attached Notice of Proposed Rulemaking (NPR) that would establish recordkeeping requirements for qualified financial contracts (QFCs) held by insured depository institutions (IDIs) in a troubled condition, as defined in the proposed rule. "QFCs" are defined as those qualified financial contracts that are defined in 12 U.S.C. 1821(e)(8)(D) to include securities contracts, commodity contracts, forward contracts, repurchase agreements, and swap agreements and any other contract determined by the FDIC to be a QFC as defined in that section. This NPR would implement rulemaking authority provided to the FDIC by Congress in 2005 to establish QFC recordkeeping requirements, in consultation with the other federal banking agencies, for QFCs held by institutions determined by the FDIC to be in a "troubled condition." These statutory amendments were enacted by Congress to support the FDIC's meeting its statutory obligations regarding the treatment of QFCs in the event of its appointment as receiver of a failed insured depository institution. The proposed rule and appendix would require an institution in a troubled condition, upon written notification by the institution's appropriate federal banking agency or the FDIC, to produce immediately at the close of processing of the institution's business day for a period provided in that notification:
For purposes of the proposed rule, "troubled condition" means any IDI that:
Appendix A sets forth the specific QFC recordkeeping requirements, which are organized under three categories: (1) position level data; (2) counterparty level data; and (3) certain contracts and lists of counterparty affiliates and identifiers, affiliates of the institution that are counterparties to QFC transactions, organizational charts involving the institution and its affiliates, and supporting vendors. The NPR seeks comment on various issues regarding the scope of institutions that would be covered under the rule and the specific position and counterparty data that would be included in the QFC recordkeeping requirements. Comments are due by September 26, 2008.
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Additional Related Topics:
- Administrative practice and procedure
- Bank deposit insurance
- Reporting and recordkeeping requirements
- Securities