Starting in 2019, U.S. globally systemically important banking organizations ("GSIBs") and their subsidiaries worldwide, as well as the U.S. subsidiaries, branches and agencies of foreign GSIBs ("Covered Entities"), must include new language in their underwriting and similar agreements to recognize U.S. special resolution regimes. The "QFC Stay Rules" require Covered Entities to include contractual stay language in certain of their qualified financial contracts ("QFCs") to mitigate the risk of destabilizing closeouts of Covered Entities' QFCs, which is a perceived impediment to the orderly resolution of a GSIB.

Recently, the Securities Industry and Financial Markets Association ("SIFMA") published a revised version of their standard master selected dealer agreement, which includes the new QFC language. They also published an explanatory memorandum addressing the application of the QFC Stay Rules to underwriting and similar agreements. The revised master selected dealer agreement is available at and the memorandum is available at

Covered Entities have begun to include the new QFC language in terms agreements to their distribution agreements. There are exclusions to the new requirement, which are covered in the SIFMA memorandum and may be available to a Covered Entity.

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