The Secretary of the U.S. Treasury Department ("Treasury"), as Chair of the Financial Stability Oversight Council and in consultation with the FDIC, adopted a final rule extending the compliance dates for regulations implementing qualified financial contract ("QFC") recordkeeping requirements for certain non-bank financial companies.
As previously covered, the Treasury established QFC recordkeeping rules for certain non-bank financial companies in order to facilitate the possible FDIC resolution of such companies under the Orderly Liquidation Authority. The rules require non-bank financial companies that meet specified systemic risk criteria ("records entities") to maintain records on "[QFC] positions, counterparties, legal documentation, and collateral." The rules were adopted with a staggered compliance schedule ranging from 18 months to 4 years based on the size of the records entity. Records entities are also permitted to make requests for exemption from certain of the regulation's requirements.
In December 2017, the Treasury requested public comment on a proposal to extend the compliance dates in light of uncertainty created by exemption requests that have not been resolved. The new rulemaking adopted the proposal by extending the compliance dates by (i) nine months for records entities in the first compliance tier, and (ii) six months for all other records entities.
The new compliance dates are (i) March 31, 2019, for entities in the first compliance tier ($1 trillion or more in total consolidated assets), (ii) June 30, 2019, for entities in the second compliance tier ($500 billion or more), (iii) June 30, 2020, for entities in the third compliance tier ($250 billion or more), and (iv) June 30, 2021, for entities in the fourth and final compliance tier.
Commentary / Jeff Robins
Compliance with the QFC recordkeeping requirements is a significant undertaking for corporate groups within its scope. Given that the requirements are parallel to FDIC requirements for certain insured depositary institutions and the costs to corporate groups subject to both sets of rules, the FDIC should also consider amending its implementation schedule.
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