US Treasury on Exemption from QFC Recordkeeping Requirements
The US Treasury, after a consultation with FDIC, is issuing a determination regarding a request for an exemption from certain requirements of the rule implementing the qualified financial contracts, or QFCs, recordkeeping requirements related to the Orderly Liquidation Authority under the Dodd-Frank Act. The exemption extends only to Wells Fargo Clearing Services, LLC (WFCS) and Wells Fargo Advisors Financial Network, LLC (FiNet) and to no other entities. The granted exemption becomes effective January 02, 2020.
On October 31, 2016, a final rule was published under the Dodd-Frank Act, requiring certain financial companies to maintain records with respect to their qualified financial contract positions and the associated counterparties, including legal documentation and collateral. On August 14, 2018, Wells Fargo & Company submitted, to the US Treasury, FDIC, SEC, and CFTC, a request for an exemption from sections 148.3 and 148.4 of the rule, on behalf of its subsidiaries WFCS and FiNet. The requested exemption related to the compliance with regarding the current and future qualified financial contract portfolio consisting of qualified financial contracts entered into by WFCS or FiNet, with or on behalf of clients (client activity qualified financial contracts) and QFCs entered into by WFCS or FiNet in connection with or in support of client activity qualified financial contracts. Wells Fargo also asked for an exemption from certain guarantees WFCS enters into for the benefit of a futures commission merchant in connection with WFCS' introduction of customer trades to such futures commission merchant.
The US Treasury has determined to exempt WFCS and FiNet from the recordkeeping requirements of the rule with respect to any qualified financial contract with clients that are their respective customers under the Securities Investor Protection Act, with respect to any transactions or accounts such customers have with WFCS and FiNet, respectively, subject to certain conditions. The US Treasury does not expect that granting this exemption will unduly interfere with the FDIC's ability to avoid or mitigate serious adverse effects on financial stability or economic conditions in the United States. Treasury has determined to exempt any guarantees of such qualified financial contracts by a third party if the guarantor is an affiliate of the customer, is itself a customer of WFCS or FiNet, as applicable, or does not have any other qualified financial contract with WFCS or FiNet, as applicable. In addition, Treasury has determined to exempt WFCS from recordkeeping requirements of the rule with respect to any qualified financial contract entered into by WFCS with a clearing organization for the purpose of facilitating the clearance or settlement of any qualified financial contract subject to the exemption.
Related Link: Federal Register Notice
Keywords: Americas, US, Banking, Securities, QFC, Recordkeeping, Dodd Frank Act, FDIC, US Treasury
Previous Article
FED Updates Draft Form and Guidance for Reporting Under Volcker RuleRelated Articles
EC Rule on Contractual Recognition of Write Down and Conversion Powers
The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.
ECB to Consider Climate Risks When Reviewing Collateral Framework
In a response to the questions posed by a member of the European Parliament, the President Christine Lagarde highlighted the commitment of the European Central Bank (ECB) to an ambitious climate-related action plan along with a roadmap, which was published in July 2021.
APRA Issues Further Guidance on Application of Securitization Standard
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.
SRB Provides Update on Approach to Prior Permissions Regime
The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.
APRA Publishes FAQs on Capital Treatment of Overseas Subsidiaries
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.
EBA Finalizes Guidance to Assess Breaches of Large Exposure Limits
The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.
PRA Finalizes Changes to Consolidated Prudential Rules Under CRD5/CRR2
The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.
EBA Revises Guidelines on Stress Tests of Deposit Guarantee Schemes
The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).
Nordea Bank and EIB Sign Agreement to Fund Green Projects in Nordics
The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.
ACPR Publishes Corrective Version of RUBA Taxonomy
The French Prudential Control and Resolution Authority (ACPR) published the corrective version of the RUBA taxonomy Version 1.0.1, which will come into force from the decree of January 31, 2022.
