Certain Companies that May be Subject to FDIC Orderly Liquidation Authority under Dodd-Frank are Now Subject to Qualified Financial Contract Recordkeeping Requirements

March 07, 2017

Companies that the Financial Stability Oversight Council (FSOC) believes may be subject to FDIC receivership under the Orderly Liquidation Authority contained in Title II of the Dodd-Frank Act, and certain of their affiliates, are now subject to recordkeeping requirements related to their “qualified financial contracts” (QFCs). Under Title II, in extraordinary circumstances, certain nonbank financial companies may be designated by the Secretary of the Treasury for resolution by the FDIC, under the same type of provisions that apply to the receivership of an insured depository institution, rather than the otherwise applicable insolvency regime (such as the Bankruptcy Code). A wide range of nonbank financial companies – including investment companies and investment advisers – that meet certain criteria are now subject to these new recordkeeping requirements (Rule). The first step in this new recordkeeping regime for an entity subject to the Rule is to identify, by March 30, 2017, a point of contact who will be responsible for QFC recordkeeping in compliance with the Rule.

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