FSOC Proposes Reporting Requirements for Qualified Financial Contracts

On January 7th, the Secretary of the Treasury, as Chair of the Financial Stability Oversight Council, proposed rules that would implement the qualified financial contract (“QFC”) recordkeeping requirements of the Dodd– Frank Act. The proposed rules would require financial companies to maintain records with respect to QFCs to assist the FDIC as receiver for a covered financial company. A QFC is a securities contract, commodities contract, forward contract, repurchase agreement, swap agreement, or any similar agreement that the FDIC determines by regulation, resolution, or order to be a qualified financial contract; and a “covered financial company” is a financial company, other than an insured depository institution, for which the Secretary has made a determination to seek the appointment of the FDIC as receiver under the Dodd­Frank Act. The proposed rules would require recordkeeping with respect to positions, counterparties, legal documentation and collateral to assist the FDIC as receiver in deciding whether to transfer QFCs; assess the consequences of decisions to transfer, disaffirm or repudiate, or allow the termination of, QFCs with one or more counterparties; determine if any financial systemic risks are posed by the transfer, disaffirmance or repudiation, or termination of such QFCs; and otherwise exercise its rights under the Act. Comments should be submitted on or before by April 7, 2015. 80 FR 965.

FinCEN Seeks BSA Advisory Group Nominees

On December 24th, the Financial Crimes Enforcement Network invited the public to nominate financial institutions and trade groups for membership on the Bank Secrecy Act Advisory Group. New members will be selected for three­year membership terms. Nominations should be submitted on or before January 23, 2015. 79 FR 77599.

FSOC Seeks Comment on Risks Posed by Asset Management Industry

On December 18th, the Financial Stability Oversight Council (“FSOC”) voted to request comment on the potential risks to U.S. financial stability posed by asset management products and activities. The Council is seeking comment on risks related to liquidity and redemptions, leverage, operational functions, and resolution in the asset management industry. Comments should be submitted on or before February 23, 2015. FSOC Press Release. In his remarks opening the FSOC meeting, Treasury Secretary Jack Lew emphasized that the “Council’s focus on the asset management industry is directed at assessing whether the structure or mechanics of certain asset management products or activities could create, amplify, or transmit risk more broadly in the financial system in ways that could affect U.S. financial stability.” Lew Remarks.