[Federal Register: July 28, 2008 (Volume 73, Number 145)]
[Proposed Rules]
[Page 43635-43643]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28jy08-10]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 43635]]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 370
RIN 3064-AD30
Recordkeeping Requirements for Qualified Financial Contracts;
Proposed Rule and Notice
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Notice of proposed rulemaking.
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SUMMARY: The FDIC proposes recordkeeping requirements for qualified
financial contracts (QFCs) held by insured depository institutions in a
troubled condition as defined in this proposed rule. The appendix to
the proposed rule would require an institution in a troubled condition,
upon written notification by the FDIC, to produce immediately at the
close of processing of the institution's business day, for a period
provided in the notification, electronic files for certain position
level and counterparty level data; electronic or written lists of QFC
counterparty and portfolio location identifiers, certain affiliates of
the institution and the institution's counterparties to QFC
transactions, contact information and organizational charts for key
personnel involved in QFC activities, and contact information for
vendors for such activities; and copies of key agreements and related
documents for each QFC.
DATES: Comments on this notice of proposed rulemaking must be received
by September 26, 2008.
ADDRESSES: You may submit comments by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Agency Web Site: http://www.FDIC.gov/regulations/laws/
federal/propose.html. Follow the instructions for submitting comments.
Mail: Robert E. Feldman, Executive Secretary, Attention:
Comments, Federal Deposit Insurance Corporation, 550 17th St., NW.,
Washington, DC 20429.
Hand Delivery/Courier: Guard station at the rear of the
550 17th Street Building (located on F Street) on business days between
7 a.m. and 5 p.m. (EST).
E-mail: Comments@fdic.gov. Include ``Recordkeeping
Requirements for Qualified Financial Contracts'' in the subject line of
the message.
Public Inspection: All Comments received will be posted
without change to http://www.fdic.gov/regulations/laws/federal
including any personal information provided. Comments may be inspected
and photocopied in the FDIC Public Information Center, 3502 North
Fairfax Drive, Room E-1002, Arlington, VA 22226, between 9 a.m. and 5
p.m. (EST) on business days. Paper copies of public comments may be
ordered from the Public Information Center by telephone at (877) 275-
3342 or (703) 562-2200.
FOR FURTHER INFORMATION CONTACT: R. Penfield Starke, Counsel,
Litigation and Resolutions Branch, Legal Division, (703) 562-2422 or
RStarke@FDIC.gov; Michael B. Phillips, Counsel, Supervision and
Legislation Branch, Legal Division, (202) 898-3581 or
MPhillips@FDIC.gov; Craig C. Rice, Senior Capital Markets Specialist,
Division of Resolutions and Receiverships, (202) 898-3501 or
Crrice@FDIC.gov; Marc Steckel, Section Chief, Capital Markets Branch,
Division of Supervision and Consumer Protection, (202) 898-3618 or
MSteckel@FDIC.gov; Steve Burton, Section Chief, Division of Insurance
and Research, (202) 898-3539 or Sburton@FDIC.gov, Federal Deposit
Insurance Corporation, 550 17th Street, NW., Washington, DC.
SUPPLEMENTARY INFORMATION:
I. Background
QFCs are certain financial contracts that have been defined in the
Federal Deposit Insurance Act (FDI Act) and that receive special
treatment by the FDIC in the event of the failure of an insured
depository institution (institution). The special treatment of QFCs
after the FDIC's appointment as receiver or conservator for a failed
institution initially was codified in the FDI Act as part of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989
(FIRREA) \1\ and places certain restrictions on the FDIC as receiver
\2\ for a failed institution that held QFCs.
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\1\ Public Law No. 101-73, 103 Stat. 514 (August 9, 1989).
\2\ Most of the restrictions applicable to the treatment of QFCs
by an FDIC receiver also apply to the FDIC in its conservatorship
capacity. See U.S.C. 1821(e)(8), (9), (10), and (11). While the
treatment of QFCs by an FDIC conservator is not identical to the
treatment of QFCs in a receivership, see 12 U.S.C. 1821(e)(8)(E) and
(10) (B)(i) and (ii), for purposes of this preamble we intend
reference to the FDIC in its receivership capacity to include its
role as conservator under this statutory authority.
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The FDI Act identifies QFCs using the statutory definition of five
specific financial contracts. This statutory list of QFCs consists of
securities contracts, commodity contracts, forward contracts,
repurchase agreements, and swap agreements.\3\ The FDIC also may define
other similar agreements as QFCs by rule or order.\4\ In addition, a
master agreement that governs any contracts in these five categories is
treated as a QFC \5\ as are security agreements that ensure the
performance of a contract from the five enumerated categories.\6\
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\3\ 12 U.S.C. 1821(e)(8)(D)(ii)-(vi).
\4\ 12 U.S.C. 1821(e)(8)(D)(i). The FDIC has provided clarifying
definitions for repurchase agreements and swap agreements in 12 CFR
360.5.
\5\ 12 U.S.C. 1821(e)(8)(D)(ii)(XI), (iii)(IX), (iv)(IV),
(v)(V), and (vi)(V).
\6\ 12 U.S.C. 1821(e)(8)(D)(ii)(XII), (iii)(X), (iv)(V),
(v)(VI), and (vi)(VI).
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Under the FDI Act and other U.S. insolvency statutes, a party to
QFCs with the insolvent entity can exercise its contractual right to
terminate QFCs and offset or net out any amounts due between the
parties and apply any pledged collateral for payment.\7\ Under the
Bankruptcy Code, this right is immediate upon initiation of bankruptcy
proceedings, while under the FDI Act, counterparties cannot exercise
this contractual right until after 5 p.m. (Eastern Time) on the
business day following the appointment of the FDIC as receiver.\8\ By
contrast, parties to most contracts with insured institutions cannot
terminate the contracts based upon the appointment of the FDIC as
receiver.\9\ The special rights granted by the FDI Act to QFC
counterparties are designed to protect the stability of the
[[Page 43636]]
financial system and to reduce the potential for cascading interrelated
defaults.
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\7\ 12 U.S.C. 1821(e)(8); 11 U.S.C. 555 (securities contracts),
556 (commodities and forward contracts), 559 (repurchase
agreements), 560 (swap agreements), and 561 (master netting
agreements).
\8\ See 12 U.S.C. 1821(e)(10)(B).
\9\ 12 U.S.C. 1821(e)(13).
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If QFC counterparties were unable to terminate and liquidate their
positions in a timely manner after the failure of the institution, they
would be exposed to market risks and uncertainty regarding the ultimate
resolution of QFCs. Absent the ability to terminate a QFC in a timely
manner when the counterparty becomes insolvent (which may include
exercising rights to offset positions, net payments, and the use of
collateral to cover amounts due), the potential for fluctuation in the
value of the QFCs from changes in interest rates and other market
factors may create market uncertainty that could lead to broader market
disruptions. Consequently, while the Bankruptcy Code and the FDI Act
generally do not contain provisions covering creditor or counterparty
liquidity concerns arising from insolvency proceedings, those statutes
do contain safeguards for counterparties that have entered into certain
financial contracts under the Bankruptcy Code and the FDI Act.\10\ Both
of these statutes treat these types of financial contracts differently
from other contracts that an entity may have entered into prior to
bankruptcy or failure.\11\
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\10\ 11 U.S.C. 555, 556, 559, 560, and 561; 12 U.S.C.
1821(e)(8).
\11\ Without such protections for financial contracts and QFCs
under the Bankruptcy Code and the FDI Act, respectively, a contract
generally will be subject to an automatic stay upon the filing of a
bankruptcy petition or the appointment of the FDIC as receiver. See
11 U.S.C. 361; 12 U.S.C. 1821(e)(13).
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Congress, however, recognized the tension between the need of the
FDIC as receiver to efficiently resolve a failed institution and the
desire to maintain stability in the financial markets. Thus, the
treatment of QFCs for failed institutions under the FDI Act provides
the FDIC with limited flexibility in crafting a resolution with respect
to the institution's QFC portfolio. These provisions allow the FDIC to
reduce losses to the deposit insurance fund and retain the value of the
failed institution's portfolio, while minimizing the potential for
market disruptions that could occur with the liquidation of a large QFC
portfolio.
After its appointment as receiver, the FDIC has three options in
managing the institution's QFC portfolio: (1) Transfer the QFCs to
another financial institution, (2) repudiate the QFCs, or (3) retain
the QFCs in the receivership. Within certain constraints, the FDIC can
apply different options to QFCs with different counterparties.
First, the receiver may transfer a QFC to any other financial
institution not currently in default, including but not limited to
foreign banks, uninsured banks, and bridge banks or conservatorships
operated by the FDIC. If the receiver transfers a QFC to another
financial institution, the counterparty cannot exercise its contractual
right to terminate the QFC based solely on the transfer, the
insolvency, or the appointment of the receiver.
Second, the FDIC as receiver may repudiate a QFC, within a
reasonable period of time, if the receiver determines that the contract
is burdensome.\12\ If the receiver repudiates the QFC, it must pay
actual direct compensatory damages, which may include the normal and
reasonable costs of cover or other reasonable measure of damages used
in the industry for such claims, calculated as of the date of
repudiation.\13\ If the receiver determines to transfer or repudiate a
QFC, all other QFCs entered into between the failed institution and
that counterparty, as well as those QFCs entered into with any of that
counterparty's affiliates, must be transferred to the same financial
institution or repudiated at the same time.
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\12\ 12 U.S.C. 1821(e)(1).
\13\ 12 U.S.C. 1821(e)(3)(C).
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Third, the FDIC as receiver may retain a QFC in the receivership.
This option would allow the counterparty to terminate the contract. If
a QFC is terminated by the counterparty or repudiated by the receiver,
the counterparty may exercise any contractual right to net any payment
the counterparty owes to the receiver on a QFC against any payment owed
by the receiver to the counterparty on a different QFC.
The FDIC as receiver has very little time to choose among these
three options. Under the FDI Act, the FDIC as receiver has until 5 p.m.
(Eastern Time) on the business day following the date of its
appointment as receiver to make its decision to transfer any QFCs.
During this period, counterparties are prohibited from terminating or
otherwise exercising any contractual rights triggered by the
appointment of the receiver under the QFC agreements. In effect, the
same time limitation applies to repudiation because, after the
expiration of this brief stay, counterparties are free to exercise any
contractual right to terminate the QFCs and avoid the FDIC's power to
repudiate. If the FDIC as receiver decides to transfer any QFCs, it
must take steps reasonably calculated to provide notice of the transfer
of the QFCs at the failed institution to the relevant counterparties,
who are prohibited from exercising such rights thereafter.\14\
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\14\ See 12 U.S.C. 1821(e)(10)(B). This limited time frame in
which QFC counterparties are stayed from acting is in contrast to
parties to other contracts with a failed institution which may be
required to continue to perform by a receiver, and the receiver may
stay a party from terminating such other contracts subject to
monetary damages or default for up to 90 days.
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To make a well-informed decision on these three options, the FDIC
needs access to information such as the types of QFCs, the
counterparties and their affiliates, the notional amount and net
position on the contracts, the purpose of the contracts, the maturity
dates, and the collateral pledged for the contracts. Given the FDI
Act's short time frame for such decision by the FDIC, in the case of a
QFC portfolio of any significant size or complexity, it may be
difficult to obtain and process the large amount of information
necessary for an informed decision by the FDIC as receiver unless that
information is readily available to the FDIC in a format that permits
the FDIC to quickly and efficiently carry out an appropriate financial
and legal analysis.
In light of the large volume of information concerning QFCs that a
receiver must process in the limited time frame set forth in the FDI
Act, the FDIC is proposing QFC recordkeeping requirements for
institutions in a troubled condition, as described below. The absence
of adequate information for decision-making by the FDIC as receiver
increases the likelihood that, in a failed bank situation, QFCs will be
left in the receivership or repudiated, instead of transferred to open
institutions or a bridge bank. The FDIC does not believe that the
proposed QFC recordkeeping requirements are overly burdensome, but
encompass information that should be maintained by institutions as part
of their risk management of capital market activities. Given the
business and related counterparty risks and supervisory considerations,
the FDIC believes that the proposed recordkeeping requirements are
consistent with safe and sound banking practices by institutions
holding QFCs.
II. The Proposed Rule
In 2005, the Bankruptcy Abuse Prevention and Consumer Protection
Act \15\ was enacted, with section 908 of the Act authorizing the FDIC,
in consultation with the other Federal banking agencies, to set
recordkeeping requirements for QFCs held in
[[Page 43637]]
institutions determined to be in a ``troubled condition.'' \16\
Consistent with this statutory authority, the proposed rule applies to
all institutions that are FDIC-insured and have been deemed to be in a
troubled condition.
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\15\ Public Law No. 109-8, 119 Stat. 23 (April 20, 2005); H.R.
Rep. No. 106-834, section 9, at 35 (2000).
\16\ 12 U.S.C 1821(e)(8)(H).
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For purposes of this proposed rule, ``troubled condition'' means
any insured depository institution that (1) has a composite supervisory
rating, as determined by its appropriate Federal banking agency in its
most recent examination, of 3 (only if the insured depository
institution has total consolidated assets of ten billion dollars or
greater), 4 or 5 under the Uniform Financial Institution Rating System,
or in the case of an insured branch of a foreign bank, an equivalent
rating; (2) is subject to a proceeding initiated by the FDIC for
termination or suspension of deposit insurance; (3) is subject to a
cease-and-desist order or written agreement issued by the appropriate
Federal banking agency, as defined in 12 U.S.C. 1813(q), that requires
action to improve the financial condition of the insured depository
institution or is subject to a proceeding initiated by the appropriate
Federal banking agency which contemplates the issuance of an order that
requires action to improve the financial condition of the insured
depository institution, unless otherwise informed in writing by the
appropriate Federal banking agency; (4) is informed in writing by the
insured depository institution's appropriate Federal banking agency
that it is in troubled condition for purposes of 12 U.S.C. 1831i on the
basis of the institution's most recent report of condition or report of
examination, or other information available to the institution's
appropriate Federal banking agency; or (5) is determined by the
appropriate Federal banking agency or the FDIC in consultation with the
appropriate Federal banking agency to be experiencing a significant
deterioration of capital or significant funding difficulties or
liquidity stress, notwithstanding the composite rating of the
institution by its appropriate Federal banking agency in its most
recent report of examination.
The third and fourth criteria of the term ``troubled condition'' as
defined in this proposed rule are similar to criteria for the
definition of that term in other FDIC rules and the rules of the other
Federal banking agencies (which generally implement 12 U.S.C. 1831i,
regarding the Federal banking agencies' approval of appointment of
directors and senior executive officers of institutions).\17\ However,
the first, second, and fifth criteria for the definition of ``troubled
condition'' in the proposed rule differ from the other agencies' rules
that implement 12 U.S.C. 1831i.
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\17\ See 12 CFR 303.101(c) (FDIC), 12 CFR. 5.51(c)(6) (OCC), 12
CFR 225.71(d) (FRB); and 12 CFR 563.555 (OTS).
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Consistent with the FDIC's and the other Federal banking agencies'
definition of ``troubled condition'' for purposes of 12 U.S.C. 1831i,
the first criterion of the definition of ``troubled condition'' in this
proposed rule includes institutions with a composite rating, as
determined by its appropriate Federal banking agency in its most recent
examination, of 4 or 5 under the Uniform Financial Institution Rating
System, or in the case of an insured branch of a foreign bank, an
equivalent rating. However, for purposes of this first criterion for
``troubled condition'' in this proposed rule, the FDIC has included any
insured depository institution with total consolidated assets of ten
billion dollars or greater and a composite rating, as determined by its
appropriate Federal banking agency in its most recent examination, of 3
under the Uniform Financial Institution Rating System. The inclusion of
institutions of such asset size with a composite rating of 3 reflects
the risks to the deposit insurance fund arising from large institutions
with QFC portfolios for which the appropriate Federal banking agency
has assigned a composite rating of 3.
The second criterion of the definition of ``troubled condition'' in
this proposed rule reflects the FDIC's responsibility to terminate the
deposit insurance of institutions that pose unreasonable risk to the
deposit insurance fund. Similarly, the fifth criterion of this
definition is based on circumstances that create a significant risk
that an institution may require the appointment of the FDIC as
receiver.
In accordance with section 11(e)(8)(H) of the FDI Act, we have
consulted with the other Federal banking agencies regarding the
proposed part 370 and Appendix A. This Notice of Proposed Rulemaking
(NPR) reflects various comments from the other Federal banking
agencies.
III. Appendix A: QFC Recordkeeping Requirements
Appendix A to proposed Part 370 sets forth the specific QFC
recordkeeping requirements proposed in this NPR. These QFC
recordkeeping requirements are organized under three categories as
provided in Appendix A: (1) Position level data (Table A1), (2)
counterparty level data (Table A2), 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 (Section B). An institution in a troubled condition would be
required to maintain the position level data and counterparty data
listed under Tables A1 and A2 in electronic files in a format
acceptable to the FDIC, and such institutions would be required to
demonstrate the ability to produce this information immediately at the
close of processing of the institution's business day, for a period
provided in a written notification by the FDIC. The files required
under Section B are less quantitative and could be maintained in
electronic format, in written format, or in a combination of those two
formats. Nonetheless, the nature of this information would require that
it be updated and available upon request on a daily basis.
The proposed rule and Appendix A are intended to facilitate the
ability of the receiver to gather relevant information on QFCs in order
to make business decisions within the short time frame between when a
failure occurs and when the FDIC as receiver must act under 12 U.S.C.
1821(e)(9) and (10). Also, the data fields and related information
required in Appendix A are important for the due diligence by
institutions of their QFC agreements in conjunction with their risk
management policies and procedures.
For purposes of the proposed rule and Appendix A, ``position'' is
defined in the proposed rule to mean the rights and obligations of a
person or entity as party to an individual transaction. For example,
``position'' would include the rights and obligations of an institution
under a ``Transaction'' (as such term is defined in the 2002 Master
Agreement of the International Swaps and Derivatives Association
(ISDA)), such as an interest rate swap.
Table A1. Table A1 requires data that must be maintained regarding
open QFC positions entered into by that institution.\18\ For such data,
the institution must demonstrate the ability to produce immediately at
the close of processing of the institution's business day, for a period
provided in a written notification by the FDIC, a report that
aggregates the current market value and
[[Page 43638]]
the amount of QFCs by each of the delineated fields. In addition, the
FDIC also may require a certain combination of recordkeeping fields
from Table A1 where significant for purposes of its evaluation of risks
associated with the institution's positions.
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\18\ These positions include QFCs entered into by affiliates of
the insured institution that are covered by the master agreements to
which the institution is a party.
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The following data fields are required in Table A1:
1. Unique position identifier. This information would include CUSIP
identifiers or unique trade confirmation numbers, if available. This
information is needed in order to readily track and distinguish
positions.
2. Portfolio location identifier. This information would be used to
provide the location in which the position is booked by the institution
(e.g., the New York or London branch of the institution).
3. Type of position. This information describes the products used,
sold or traded by an institution. It would include position types such
as interest rate swaps, credit default swaps, equity swaps, and foreign
exchange forwards, and securities or loan repurchase agreements.
4. Purpose of the position. This information identifies the role of
the QFC in the institution's business strategy. For example, it would
identify whether the purpose of a position is for trading, or for
hedging other exposures such as mortgage loan servicing or certificates
of deposit.
5. Termination date. This date indicates when the institution's
rights and obligations regarding the position are expected to end.
6. Next call, put, or cancellation date. This information indicates
the next date when a call, put, or cancellation may occur with respect
to the position.
7. Next payment date. This information would include payment dates
for potential upcoming obligations.
8. Current market value of the position. This information would
cover position values as of the date of the file. It would be used to
determine if the institution is in-or out-of-the-money with the
counterparty.
9. Unique counterparty identifier. This information would be used
to aggregate positions by counterparty.
10. Notional or principal amount of the position. This information
is needed to assist in the FDIC's evaluation of the position. It would
include the notional amount where applicable.
11. Documentation status of the position. This information would
document whether the position was affirmed, confirmed, or neither
affirmed nor confirmed. It is needed to determine the reliability of
booked positions and their legal status.
Table A2. Table A2 requires data that must be maintained at the
counterparty \19\ level for all QFCs entered into by an institution.
For such data, the institution must demonstrate the ability to produce
immediately at the close of processing of the institution's business
day, for a period provided in a written notification by the FDIC, a
report that (i) itemizes, by each counterparty and its affiliates with
QFCs with the institution, the data required in each field delineated
in Table A2; and (ii) aggregates by field, for each counterparty and
its affiliates, the data required in each field. The following data
fields are required in Table A2:
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\19\ The use of the term ``Counterparty'' in Appendix A
generally includes all entities (including all affiliates) that are
effectively treated as a single counterparty under a master
agreement.
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1. Unique counterparty identifier. This information would be used
by the FDIC to aggregate positions by counterparty.
2. Current market value of all positions. This data must be
aggregated and to the extent permitted under all applicable agreements,
netted as of the date of the file. If one or more positions cannot be
netted against others, they would be maintained as separate entries.
3. Current market value of all collateral posted by the
institution. This information would include the current market value of
all collateral and the types of collateral, if any, that the
institution has posted against all positions with each counterparty.
4. Current market value of all collateral posted by counterparties.
This information would include the current market value of all
collateral and the types of collateral, if any, that the counterparty
has posted against all positions.
5. Institution's collateral excess or deficiency. This information
would be provided with respect to all the positions as determined under
each applicable agreement, such as master netting agreements and
security agreements. If all positions are not secured by the same
collateral, then separate entries should be maintained for each
collateral excess and/or deficiency. This information would include
thresholds and haircuts where applicable.
6. Counterparty's collateral excess or deficiency. This information
would be provided with respect to all the positions as determined under
each applicable agreement. If all positions are not secured by the same
collateral, then separate entries should be maintained for each
collateral excess and/or deficiency. This information would include
thresholds and haircuts where applicable.
7. Institution's collateral excess or deficiency for all positions.
This information would be based on the aggregate market value of the
positions (after netting to the extent permitted under all applicable
agreements) and the aggregate market value of all collateral posted by
the institution against the positions, in whole or in part.
B. Data files and contract information required under Section B:
Section B of Appendix A requires that other data files be maintained in
either written or electronic format for QFCs and upon a written request
by the FDIC, be produced immediately at the close of processing of the
institution's business day, for the period provided in that written
request. Each institution must maintain lists of: counterparty
identifiers with the associated counterparty and contact information;
affiliates of the counterparties that are also counterparties to QFC
transactions; affiliates of the institution that are counterparties to
QFC transactions, specifically indicating which affiliates are direct
or indirect subsidiaries of the institution; and portfolio location
identifiers with the associated booking locations.
For each QFC, the institution must maintain copies in a central
location or data base in the United States of certain agreements,
including active master netting agreements, and other QFC agreements
between the institution and its counterparties that govern the QFC;
active or ``open'' confirmations, if the position has been confirmed;
credit support documents; and assignment documents, if applicable. The
institution also must maintain a legal entity organizational chart; an
organizational chart of all personnel involved in QFC-related
activities at the institution, parent and affiliates; and a list of
vendors supporting the QFC-related activities.
IV. Requests for Comment
The FDIC recognizes that the proposed QFC recordkeeping
requirements for institutions could not be implemented without some
regulatory and financial burden on the industry. The FDIC is seeking to
minimize the burden while at the same time ensuring it can quickly and
cost effectively resolve an institution in a troubled condition upon
its failure. The FDIC seeks comment on the potential industry costs and
feasibility of
[[Page 43639]]
implementing the requirements of the proposed rule. The FDIC is also
interested in comments on whether there are other ways to accomplish
its goal of meeting the QFC recordkeeping-related requirements which
might be more effective or less costly or burdensome.
For purposes of the final rule, the FDIC seeks comments on all
aspects of the proposed rule. In particular, the FDIC seeks comments on
these specific issues:
1. Whether the definition of ``troubled condition'' in the proposed
rule should be modified in the final rule to include any insured
depository institution that has received a composite rating as
determined by its appropriate Federal banking agency in its most recent
examination, of a 3 under the Uniform Financial Institution Rating
System?
2. Whether the QFC recordkeeping requirements in this proposed rule
should be applied in the final rule to cover all institutions,
regardless of whether they are in a troubled condition? Alternatively,
should the proposed rule be applied to cover all institutions,
regardless of whether they are in a troubled condition, if they meet
certain quantitative thresholds? Possible thresholds are outlined in
the following question. Such an expansion of the scope of the proposed
rule would be consistent with the important role that the availability
of this information will have in the case of the appointment of a
receiver or conservator in facilitating an orderly resolution of a
failed institution and the reduction of the losses of the deposit
insurance fund. Delaying the obligation for such recordkeeping until an
institution is in a troubled condition increases the risks of
disruption and the potential for losses to the deposit insurance fund.
In addition, the requirements imposed by this proposed rule are
consistent with the data and records necessary for the safe and sound
management of the risks arising from QFC activities. The absence of
such prudent management practices increases the risks to the deposit
insurance fund. The FDIC's general authority to promulgate rules to
protect the deposit insurance fund would provide additional support for
this expanded coverage.\20\
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\20\ See 12 U.S.C. 1819(a) (Tenth); 12 U.S.C. 1821(a)(4)(A).
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3. Whether the QFC recordkeeping requirements in this proposed rule
should be applied in the final rule only to institutions that meet
certain quantitative thresholds, for example, including (i) the total
consolidated assets of the institution exceed a certain threshold (e.g.
, a minimum total asset size of the institution of $2 billion or more);
(ii) the institution's holding of QFCs exceeds a certain total notional
or principal amount; (iii) the institution is a party to no fewer than
10 open positions, or (iv) the total notional or principal amount of
QFCs held by the institution constitute more than a certain percentage
of tier 1 and tier 2 capital under the risk-based capital guidelines of
the appropriate Federal banking agency, based on the institution's most
recent consolidated Report of Condition and Income (e.g., greater than
20 percent of the institution's tier 1 and tier 2 risk-based capital)?
In addition, should the FDIC consider other relevant factors such as
the total number of QFC transactions by the institution, the types of
QFCs executed by the institution, and the complexity of the QFC
positions executed by the institution? Alternatively, should
institutions below thresholds of the types described in this question
be required to comply with the substantive requirements in proposed
part 370 and section B of proposed Appendix A, but be excused from the
requirements in Tables A1 and A2 of proposed Appendix A that records be
maintained in electronic form?
4. Should the QFC position level data fields in Table A1 of
proposed Appendix A be required of affiliates of institutions subject
to the proposed rule? Alternatively, should the QFC position level data
fields in Table A1 of proposed Appendix A be required for affiliates of
the institution that are counterparties to QFC transactions where such
transactions are subject to a master agreement that also governs QFC
transactions entered into by the institution?
5. Are there additional recordkeeping requirements or modifications
to the proposed QFC recordkeeping requirements that would better
reflect current internal risk management concerns of institutions?
6. Should the data requirements in proposed Appendix A be tailored
to fit specific QFC categories (e.g., repurchase agreements and swap
contracts)?
7. Should the FDIC revise its current definition of ``troubled
condition'' in 12 CFR 303.102(c) to include the definition of
``troubled condition'' in this proposed rule?
8. The FDIC requests comment concerning (i) the extent to which
contracts of institutions and their affiliates are subject to master
netting agreements, cross-collateralization agreements, or other master
agreements that affect the institutions' net positions or collateral
sufficiency with respect to a counterparty; \21\ (ii) the extent to
which contracts of counterparties and their affiliates are subject to
master netting agreements, cross-collateralization agreements, or other
master agreements that affect the counterparties' net positions or
collateral sufficiency; and (iii) the processes by which such impacts
are monitored by institutions, counterparties, and their affiliates,
respectively. Please note that such cross-affiliate netting across the
insured institution in receivership and its affiliates may be contrary
to the provisions of the FDI Act governing the liabilities of the
receivership and the distribution of the proceeds of the sale or
liquidation of the insured institution's assets if such netting would
disadvantage the insured institution and impose losses on the
institution in receivership otherwise attributable to contracts by the
institution's affiliates.
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\21\ This situatiions might occur, for example, if an
institution and its affiliates were treated as a single party under
a master netting agreement, whereby their respective positions would
be netted against one another and that net position, in turn, would
be netted against the counterparty's positions.
---------------------------------------------------------------------------
9. Do any of the data fields required in Tables A1 and A2 of
proposed Appendix A call for information that is not relevant to the
institutions' and counterparties' legal and economic positions
regarding their QFC portfolios? Also, please provide any modifications
of the data fields in Tables A1 and A2, in addition to the information
required in section B of proposed Appendix A that would be appropriate
for the appropriate Federal banking agency and the FDIC to better
monitor QFCs entered into by institutions, counterparties, and
affiliates of institutions and counterparties that are covered by
section B.1 of proposed Appendix A.
10. Under section 370.1(c) of the proposed rule, an insured
institution must comply with this rule and Appendix A within 30 days
after written notification by the institution's appropriate Federal
banking agency or the FDIC that it is in a ``troubled condition'' as
defined in the proposed rule. Should the FDIC include in the final rule
an approval procedure for requests for an extension of the 30 day
deadline from institutions with an aggregate amount of QFCs beyond a
certain threshold and based on specific dates for compliance?
11. Should Appendix A be amended to include requirements for a
listing of the institution's QFC-related portfolios, those portfolios'
risk information, and the specific counterparties associated with those
portfolios?
[[Page 43640]]
V. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) \22\ requires an agency
publishing a notice of proposed rulemaking to prepare and make
available for public comment an initial regulatory flexibility analysis
that describes the impact of the final rule on small entities. Under
regulations issued by the Small Business Administration,\23\ a ``small
entity'' includes a bank holding company, commercial bank, or savings
association with assets of $165 million or less (collectively, small
banking organizations). The RFA provides that an agency is not required
to prepare and publish a regulatory flexibility analysis if the agency
certifies that the proposed rule would not have a significant economic
impact on a substantial number of small entities.
---------------------------------------------------------------------------
\22\ 5 U.S.C. 603(a).
\23\ 13 CFR 121.201.
---------------------------------------------------------------------------
Under section 605(b) of the RFA,\24\ the FDIC certifies that this
proposed rule would not have a significant economic impact on a
substantial number of small entities. The proposed rule consists of
requirements for institutions that have been determined to be in a
troubled condition, as defined in the proposed rule. These requirements
include the maintenance of certain information regarding the
institution's QFCs that it would be able to produce on short notice by
the appropriate Federal banking agency or the FDIC. This proposed rule
would not have a significant economic impact on a substantial number of
small entities for three reasons. First, QFCs are generally
sophisticated financial instruments that are usually used by larger
financial institutions to hedge assets, provide funding, or increase
income. Because of the nature of the capital markets in which QFCs are
used, smaller entities generally do not participate in such markets.
Second, the number of small entities affected is further limited due to
the proposed rule only being applicable to institutions that are
determined to be in a troubled condition under the definition in the
rule. Third, the impact on small entities that do use QFCs and are in a
troubled condition further is limited by the fact that the information
requested by the FDIC involves information that the institution already
should have accessible if it is operated in a safe and sound manner.
---------------------------------------------------------------------------
\24\ 5 U.S.C. 605(b).
---------------------------------------------------------------------------
VI. Paperwork Reduction Act
A. Request for Comment on Proposed Information Collection
In accordance with the requirements of the Paperwork Reduction Act
of 1995 (PRA), 44 U.S.C. 3501-3521, the FDIC may not conduct or
sponsor, and the respondent is not required to respond to, an
information collection unless it displays a currently valid Office of
Management and Budget (OMB) control number. The FDIC is requesting
comment on the proposed information collection requirements contained
in this rule. The FDIC also is giving notice that the proposed
collection of information has been submitted to OMB for review and
approval under section 3506 of the PRA and section 1320.11 of OMB's
implementing regulations (5 CFR part 1320).
Comments: In addition to the questions raised elsewhere in this
preamble, comment is solicited on: (1) Whether the proposed collection
of information is necessary for the proper performance of the functions
of the agency, including whether the information will have practical
utility; (2) the accuracy of the agency's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (3) the quality, utility, and clarity
of the information to be collected; (4) ways to minimize the burden of
the collection of information on those who are to respond, including
through the use of appropriate automated, electronic, mechanical, or
other technological collection techniques or other forms of information
technology; e.g., permitting electronic submission of responses; and
(5) estimates of capital or start-up costs and costs of operation,
maintenance, and purchases of services to provide information.
Commenters may submit comments on aspects of the proposed rule that
may affect recordkeeping requirements at the addresses listed in the
ADDRESSES section of this NPR. In addition, you should send a copy of
your comments to the OMB Desk Officer for the FDIC, by mail to the
Office of Information and Regulatory Affairs, U.S. Office of
Management, New Executive Office Building, Room 10235, 725 17th Street,
NW., Washington, DC 20503, or by fax to (202) 395-6974.
B. Proposed Information Collection
Title of Information Collection: Recordkeeping Requirements for
Qualified Financial Contracts: Proposed Rule and Notice.
OMB Number: 3064--[NEW].
Frequency of Response: Where applicable under this proposed rule,
upon written request of the institution's appropriate Federal banking
agency or the FDIC immediately at the close of processing of the
institution's business day for a period provided in a written
notification by the FDIC.
Affected Public: Insured depository institutions determined to be
in a ``troubled condition'' as defined in the rule.
Abstract: The combined annual burden of complying with this
proposed rule is estimated to be 9,600 hours. This estimate assumes
that 150 institutions will be subject to the requirements of the
proposed rule and that such institution will spend, on average, 24
hours annually complying with the proposed reporting requirements and
40 hours annually complying with the proposed records maintenance
requirements. Factors considered in developing the burden estimate
include the existing and historical average number of insured
institutions with supervisory ratings of 3 (for institutions with total
consolidated assets of ten billion dollars or greater), 4, or 5; the
volume of QFC activity in institutions that presently have supervisory
ratings of 3 (where the asset threshold for an institution is met or
exceeded), 4, or 5; the time necessary to complete other types of
regulatory reports; the frequency with which the FDIC may require
institutions to produce QFC information under this proposed rule; and
the time necessary to update and maintain QFC and related information
as required in the proposed rule.
Estimated Burden: The combined annual burden is estimated to be
9,600 hours. This estimate is derived from the product of the estimated
number of institutions that would be subject to the proposed rule and
the estimated hours per respondent necessary to meet the proposed
rule's reporting and records maintenance requirements. There are an
estimated 150 institutions that currently would be subject to the
requirements of the proposed rule. Approximately 110 institutions would
have been subject to the proposed rule on average over the past 10
years.
The combined reporting and record maintenance burdens related to
the proposed rule are estimated at 64 hours per respondent annually.
This estimate consists of two components: A reporting component and a
records maintenance component. It is estimated that reports as
described in Tables A and B of proposed Appendix A will require 2 hours
on average to complete. This estimate is based on a number of
considerations including the relatively
[[Page 43641]]
small number of items requested, the time necessary to complete other
regulatory reports, and the reported volume of QFC activity evident
within the existing population of institutions that would be subject to
the proposed rule. The time necessary to produce such reports could be
substantially more than 2 hours for larger institutions with greater
QFC volumes.
The FDIC may request the information required in Tables A1 and A2,
and section B of Appendix A of the proposed rule relatively frequently
or infrequently depending on such factors as the reported volume of an
institution's QFC exposures, the number of QFC positions held by an
institution (if known), and the near term failure prospects of an
institution. For example, the FDIC would be more likely to request the
information required to be maintained under this proposed rule and
Appendix if the institution has a sizeable volume of reported QFC
exposures (measured in carrying values or notational amounts as
applicable) relative to that institution's assets or regulatory capital
than from an institution with a nominal volume of reported QFC
exposures. Similarly, the FDIC likely would require more frequent
reporting for institutions with low supervisory ratings. Based on the
assumption that 12 reports would be required within a given year for
such institutions, the total reporting component of the estimate would
be 24 hours per respondent.
It is further estimated that institutions subject to these
requirements will spend, on average, an estimated 10 hours per quarter,
or 40 hours annually updating and maintaining the records and
information required by section B of proposed Appendix A. Again, larger
institutions with greater QFC volumes would likely spend considerably
more time updating and maintaining records pertaining to QFC
activities. Combining the records maintenance and reporting component
estimates results in an estimated annual burden of 64 hours per
respondent.
Estimated Number of Respondents: 150.
Estimated Time per Response: 64 hours annually per respondent (24
hours--reporting; 40 hours--recordkeeping).
Estimated Total Annual Burden: 9,600 hours.
VII. Solicitation of Comments on the Use of Plain Language
Section 722 of the Gramm-Leach-Bliley Act required the Federal
banking agencies to use plain language in all proposed and final rules
published after January 1, 2000. The Federal banking agencies invite
comment on how to make this proposed rule easier to understand. For
example:
Have we organized the material to suit your needs? If not,
how could the rule be more clearly stated?
Are the requirements in the rule clearly stated? If not,
how could the rule be more clearly stated?
Do the regulations contain technical language or jargon
that is not clear? If so, which language requires clarification?
Would a different format (grouping and order of sections,
use of headings, paragraphing) make the regulation easier to
understand? If so, what changes would make the regulation easier to
understand?
Would more, but shorter sections be better? If so, which
sections should be changed?
What else could we do to make the regulation easier to
understand?
List of Subjects in 12 CFR Part 370
Administrative practice and procedure, Bank deposit insurance,
Banking, Banks, Reporting and recordkeeping requirements, Savings
associations, Securities, State non-member banks.
The Board of Directors of the Federal Deposit Insurance Corporation
proposes to amend title 12 of the Code of Federal Regulations by adding
a new part 370 to read as follows:
PART 370--RECORDKEEPING REQUIREMENTS FOR QUALIFIED FINANCIAL
CONTRACTS
2. Add new part 370 to read as follows:
Sec.
370.1 Scope and purpose, and applicability.
370.2 Definitions.
370.3 Form, availability and maintenance of records.
370.4 Content of records.
Appendix A to Part 370--File Structure for Qualified Financial
Contract (QFC) Records
Authority: 12 U.S.C. 1819(a)(Tenth); 1820(g); 1821(e)(8)(D) and
(H); 1831g; 1831i, and 1831s.
Sec. 370.1 Scope, purpose, and applicability.
(a) Scope. This part applies to insured depository institutions
that are in a troubled condition as defined in Sec. 370.2(f).
(b) Purpose. This part establishes recordkeeping requirements with
respect to qualified financial contracts for insured depository
institutions that are in a troubled condition.
(c) Applicability. An insured depository institution shall comply
with this part within 30 days after written notification by the
institution's appropriate Federal banking agency or the FDIC that it is
in a troubled condition under Sec. 370.2(f).
Sec. 370.2 Definitions.
For purposes of this part:
(a) Affiliate means any company that controls, is controlled by, or
is under common control with another company.
(b) Appropriate Federal banking agency means the agency or agencies
designated under 12 U.S.C. 1813(q).
(c) Insured depository institution means any bank or savings
association, as defined in 12 U.S.C. 1813, the deposits of which are
insured by the FDIC.
(d) Position means the rights and obligations of a person or entity
as a party to an individual transaction under a QFC.
(e) Qualified financial contracts (QFCs) mean 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.
(f) Troubled condition means for purposes of this part, any insured
depository institution that:
(1) Has a composite rating, as determined by its appropriate
Federal banking agency in its most recent report of examination, of 3
(only for insured depository institutions with total consolidated
assets of ten billion dollars or greater), 4, or 5 under the Uniform
Financial Institution Rating System, or in the case of an insured
branch of a foreign bank, an equivalent rating;
(2) Is subject to a proceeding initiated by the FDIC for
termination or suspension of deposit insurance;
(3) Is subject to a cease-and-desist order or written agreement
issued by the appropriate Federal banking agency, as defined in 12
U.S.C. 1813(q), that requires action to improve the financial condition
of the insured depository institution or is subject to a proceeding
initiated by the appropriate Federal banking agency which contemplates
the issuance of an order that requires action to improve the financial
condition of the insured depository institution, unless otherwise
informed in writing by the appropriate Federal banking agency;
(4) Is informed in writing by the insured depository institution's
appropriate Federal banking agency that it is in troubled condition for
purposes of 12 U.S.C. 1831i on the basis of the institution's most
recent report of condition or report of examination, or
[[Page 43642]]
other information available to the institution's appropriate Federal
banking agency; or
(5) Is determined by the appropriate Federal banking agency or the
FDIC in consultation with the appropriate Federal banking agency to be
experiencing a significant deterioration of capital or significant
funding difficulties or liquidity stress, notwithstanding the composite
rating of the institution by its appropriate Federal banking agency in
its most recent report of examination.
Sec. 370.3 Form, availability and maintenance of records.
(a) Form and availability. The records required to be maintained by
an insured depository institution for QFCs under this part--
(1) Except for records that must be maintained through electronic
files under Appendix A of this part, may be maintained in any form,
including in an electronic file, provided that the records are updated
at least daily;
(2) If the records are not maintained in written form, will be
capable of being reproduced or printed in written form; and
(3) Will be made available upon written request by the
institution's appropriate Federal banking agency or the FDIC
immediately at the close of processing of the institution's business
day, for a period provided in that written request.
(b) Maintenance of records after the institution is no longer in a
troubled condition. Insured depository institutions that are in a
troubled condition as defined in Sec. 370.2(f) shall continue to
maintain records required under this part for a period of one year
after the date that the appropriate Federal banking agency notifies the
institution that it is no longer in a troubled condition as defined in
Sec. 370.2(f).
(c) Maintenance of records after an acquisition of an institution
that is in a troubled condition. If an insured depository institution
that has been determined by the appropriate Federal banking agency to
be in a troubled condition ceases to exist as an insured depository
institution as a result of a merger or a similar transaction into an
insured depository institution that is not in a troubled condition
immediately following the acquisition, the obligation to maintain
records under this part will terminate when the institution in a
troubled condition ceases to exist as a separately insured depository
institution.
Sec. 370.4 Content of records.
For each QFC for which an insured depository institution is a party
or is subject to a master netting agreement involving the QFC, that
institution must maintain records as listed under Appendix A of this
part.
Appendix A to Part 370--File Structure for Qualified Financial Contract
(QFC) Records
QFC Recordkeeping Requirements
A. Electronic Files To Be Maintained for QFCs
1. Any insured depository institution that is subject to this
part (``institution'') must maintain, in an electronic file in a
format acceptable to the FDIC, the position level data found in
Table A1 for all open positions in QFCs entered into by that
institution or to which the institution is subject. In addition, for
such data, the institution must, at the FDIC's written request,
produce immediately at the close of processing of the institution's
business day, for a period provided in that written request, a
report in a format acceptable to the FDIC that aggregates the
current market value and the amount of QFCs by each of the fields in
Table A1. The FDIC also may require in its written requests a
certain combination of recordkeeping fields from Table A1 where
significant for purposes of its evaluation of risks associated with
the institution's positions.
Table A1.--Position Level Data
------------------------------------------------------------------------
Field Example Data application
------------------------------------------------------------------------
Unique position identifier 999999999AU......... Information needed
and CUSIP, if available. to readily track
and distinguish
positions; unique
trade confirmation
number if
available.
Portfolio location XY12Z............... Information needed
identifier (to identify the to determine the
headquarters or branch headquarters or
where the position is branch where the
booked). position is booked
(see section B.1 of
this Appendix).
Type of position (including Interest rate swap, Information needed
the general nature of the credit default to determine the
reference asset or interest swap, equity swap, extent to which the
rate). foreign exchange institution is
forward, securities involved in any
repurchase particular QFC
agreement, loan market.
repurchase
agreement.
Purpose of the position (if Trading, hedging Information needed
the purpose consists of mortgage servicing, to determine the
hedging strategies, include hedging role of the QFC in
the general category of the certificates of the institution's
item(s) hedged). deposit. business strategy.
Termination date (date the 3/31/2010........... Information needed
position terminates or is to determine when
expected to terminate, the institution's
expire, mature, or when rights and
final performance is obligations
required). regarding the
position are
expected to end.
Next call, put, or 9/30/08............. Information needed
cancellation date. to determine when a
call, put, or
cancellation may
occur with respect
to a position.
Next payment date........... 9/30/08............. Information needed
to anticipate
potential upcoming
obligations.
Current market value of the $995,000............ Information needed
position (as of the date of to determine if the
the file). institution is in-
or out-of-the money
with the
counterparty.
Unique counterparty AB999C.............. Information needed
identifier. to aggregate
positions by
counterparty.
Notional or principal amount $1,000,000.......... Information needed
of the position (this is to help evaluate
the notional amount, where the position.
applicable).
Documentation status of Affirmed, confirmed, Information needed
position. or neither affirmed to determine
nor confirmed. reliability of a
booked position and
its legal status.
------------------------------------------------------------------------
[[Page 43643]]
2. Also, the institution must maintain, in an electronic file in
a format acceptable to the FDIC, the counterparty-level data found
in Table A2 for all open positions in QFCs entered into by that
institution. In addition, the institution must, at the FDIC's
written request, produce immediately at the close of processing of
the institution's business day, for a period provided in that
written request, a report in a format acceptable to the FDIC that
(i) itemizes, by each counterparty and by each of its affiliates,
the data required in each field in Table A2, and (ii) aggregates by
field, for each counterparty and its affiliates, the data required
in each field in Table A2.
Table A2.--Counterparty-Level Data
------------------------------------------------------------------------
Field Example Data application
------------------------------------------------------------------------
Unique counterparty identifier AB999C........... Information needed to
aggregate positions
by counterparty.
Current market value of all ($1,000,000)..... Information needed to
positions, as aggregated and, help evaluate the
to the extent permitted under positions.
each applicable agreement,
netted \1\ (as of the date of
the file).
Current market value of all $950,000; U.S. Information needed to
collateral and the type of treasuries. determine the extent
collateral, if any, that the to which the
institution has posted institution has
against all positions with provided collateral.
each counterparty.
Current market value of all $50,000; U.S. Information needed to
collateral and the type of treasuries. determine the extent
collateral, if any, that the to which the
counterparty has posted counterparty has
against all positions. provided collateral.
Institution's collateral ($25,000)........ Information needed to
excess or deficiency with determine the extent
respect to all the positions, to which the
as determined under each institution has
applicable agreement satisfied collateral
including thresholds and requirements under
haircuts where applicable \2\. each applicable
agreement.
Counterparty's collateral $50,000.......... Information needed to
excess or deficiency with determine the extent
respect to all the positions to which the
with each counterparty, as counterparty has
determined under each satisfied collateral
applicable agreement requirements under
including thresholds and each applicable
haircuts where applicable. agreement.
The institution's collateral ($50,000)........ Information needed to
excess or deficiency with determine the extent
respect to all the positions, to which the
based on the aggregate market institution's
value of the positions (after obligations
netting to the extent regarding the
permitted under each positions may be
applicable agreement) and the unsecured.
aggregate market value of all
collateral posted by the
institution against the
positions, in whole or in
part.
------------------------------------------------------------------------
B. Other Files (in Written or Electronic Form) To Be Maintained for
QFCs
The institution must, at the FDIC's written request, produce the
following files immediately at the close of processing of the
institution's business day, for a period provided in that written
request.
1. Each institution must maintain the following files in written
or electronic form:
A list of counterparty identifiers, with the associated
counterparties and contact information;
A list of the affiliates of the counterparties that are
also counterparties to QFC transactions with the institution or its
affiliates, and the specific master netting agreements under which
they are counterparties;
A list of affiliates of the institution that are
counterparties to QFC transactions where such transactions are
subject to a master agreement that also governs QFC transactions
entered into by the institution. Such list must specify (i) which
affiliates are direct or indirect subsidiaries of the institution
and (ii) the specific master agreements under which those affiliates
are counterparties to QFC transactions; and
A list of portfolio identifiers (see Table A1), with
the associated booking locations.
2. For each QFC, the institution must maintain all of the
following documents:
Agreements (including master agreements and annexes,
supplements or other modifications with respect to the agreements)
between the institution and its counterparties that govern the QFC
transactions;
Documents related to and affirming the position;
Active or ``open'' confirmations, if the position has
been confirmed;
Credit support documents; and
Assignment documents, if applicable, including
documents that confirm that all required consents, approvals, or
other conditions precedent for such assignment(s) have been obtained
or satisfied.
3. The institution must maintain:
A legal-entity organizational chart, showing the
institution, its corporate parent and all other affiliates, if any;
and
An organizational chart, including names and position
titles, of all personnel significantly involved in QFC-related
activities at the institution, its parent and its affiliates.
Contact information for the primary contact person for
purposes of compliance with this part by the institution.
4. The institution must maintain a list of vendors supporting
the QFC-related activities and their contact information.
Dated at Washington, DC, this 15th day of July, 2008.
By order of the Board of Directors.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. E8-16951 Filed 7-25-08; 8:45 am]
BILLING CODE 6714-01-P