Federal Register / Vol. 83, No. 245 / Friday, December 21, 2018 / Rules and Regulations 65509 

1 31 CFR part 148; 81 FR 75624 (Oct. 31, 2016). 

unique identifier of the agent accessing 

or returning the key(s). 

(i) For Tier A and B operations, at 

least two (2) drop team agents are 

required to be present to access and 

return keys. For Tier C operations, at 

least three (3) drop team agents are 

required to be present to access and 

return keys. 

(ii) For Tier A and B operations, at 

least two (2) count team agents are 

required to be present at the time count 

room and other count keys are issued 

for the count. For Tier C operations, at 

least three (two for card game drop box 

keys in operations with three tables or 

fewer) count team agents are required to 

be present at the time count room and 

other count keys are issued for the 

count. 

(3) Documentation of all keys, 

including duplicates, must be 

maintained, including: 

(i) Unique identifier for each 

individual key; 

(ii) Key storage location; 

(iii) Number of keys made, 

duplicated, and destroyed; and 

(iv) Authorization and access. 

(4) Custody of all keys involved in the 

drop and count must be maintained by 

a department independent of the count 

and the drop agents as well as those 

departments being dropped and 

counted. 

(5) Other than the count team, no 

agent may have access to the drop box 

content keys while in possession of 

storage rack keys and/or release keys. 

(6) Other than the count team, only 

agents authorized to remove drop boxes 

are allowed access to drop box release 

keys. 

(7) Any use of keys at times other than 

the scheduled drop and count must be 

properly authorized and documented. 

(8) Emergency manual keys, such as 

an override key, for computerized, 

electronic, and alternative key systems 

must be maintained in accordance with 

the following: 

(i) Access to the emergency manual 

key(s) used to access the box containing 

the player interface drop and count keys 

requires the physical involvement of at 

least three agents from separate 

departments, including management. 

The date, time, and reason for access, 

must be documented with the signatures 

of all participating persons signing out/ 

in the emergency manual key(s); 

(ii) The custody of the emergency 

manual keys requires the presence of 

two agents from separate departments 

from the time of their issuance until the 

time of their return; and 

(iii) Routine physical maintenance 

that requires access to the emergency 

manual key(s), and does not involve 

accessing the player interface drop and 

count keys, only requires the presence 

of two agents from separate 

departments. The date, time, and reason 

for access must be documented with the 

signatures of all participating agents 

signing out/in the emergency manual 

key(s). 

(9) Controls must be established and 

procedures implemented to safeguard 

the use, access, and security of keys for 

kiosks. 

* * * * * 

■ 4. Amend § 543.18 by revising 

paragraph (d)(6)(v) to read as follows: 

§ 543.18 What are the minimum internal 

control standards for the cage, vault, kiosk, 

cash and cash equivalents? 

* * * * * 

(d) * * * 

(6) * * * 

(v) Dollar amount per financial 

instrument redeemed; 

* * * * * 

■ 5. Amend § 543.23 by revising 

paragraph (c)(1)(viii) to read as follows: 

§ 543.23 What are the minimum internal 

control standards for audit and accounting? 

* * * * * 

(c) * * * 

(1) * * * 

(viii) Drop and count standards, 

including supervision, count room 

access, count team, card game drop 

standards, player interface and financial 

instrument drop standards, card game 

count standards, player interface 

financial instrument count standards, 

collecting currency cassettes and 

financial instrument storage 

components from kiosks, kiosk count 

standards, and controlled keys; 

* * * * * 

■ 6. Amend § 543.24 by revising 

paragraphs (a) and (d)(5) to read as 

follows: 

§ 543.24 What are the minimum internal 

control standards for auditing revenue? 

(a) Supervision. Supervision must be 

provided as needed for revenue audit by 

an agent(s) with authority equal to or 

greater than those being supervised. 

* * * * * 

(d) * * * 

(5) Complimentary services or items. 

At least monthly, review the reports 

required in § 543.13(c). These reports 

must be made available to those entities 

authorized by the TGRA or by tribal law 

or ordinance. 

* * * * * 

Washington, DC. 

Dated: December 12, 2018. 

Jonodev O. Chaudhuri, 

Chairman. 

Dated: December 12, 2018. 

Kathryn Isom-Clause, 

Vice Chair. 

Dated: December 17, 2018. 

E. Sequoyah Simermeyer, 

Associate Commissioner. 

[FR Doc. 2018–27651 Filed 12–20–18; 8:45 am] 

BILLING CODE 7565–01–P 

DEPARTMENT OF THE TREASURY 

31 CFR Part 148 

Qualified Financial Contracts 

Recordkeeping Related to Orderly 

Liquidation Authority 

AGENCY: Department of the Treasury. 

ACTION: Notification of exemptions. 

SUMMARY: The Secretary of the Treasury 

(the ‘‘Secretary’’), as Chairperson of the 

Financial Stability Oversight Council 

(‘‘FSOC’’), after consultation with the 

Federal Deposit Insurance Corporation 

(the ‘‘FDIC’’), is issuing a determination 

regarding requests for exemption from 

certain requirements of the rule 

implementing the qualified financial 

contracts (‘‘QFC’’) recordkeeping 

requirements of Title II of the DoddFrank Wall Street Reform and Consumer 

Protection Act (the ‘‘Dodd-Frank Act’’ or 

the ‘‘Act’’). 

DATES: The exemptions granted are 

effective December 21, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Peter Phelan, Deputy Assistant 

Secretary for Capital Markets, (202) 

622–1746; Peter Nickoloff, Financial 

Economist, Office of Capital Markets, 

(202) 622–1692; Steven D. Laughton, 

Assistant General Counsel (Banking & 

Finance), (202) 622–8413; or Stephen T. 

Milligan, Acting Deputy Assistant 

General Counsel (Banking & Finance), 

(202) 622–4051. 

SUPPLEMENTARY INFORMATION: 

Background 

On October 31, 2016, the Secretary 

published a final rule pursuant to 

section 210(c)(8)(H) of the Dodd-Frank 

Act requiring certain financial 

companies to maintain records with 

respect to their QFC positions, 

counterparties, legal documentation, 

and collateral that would assist the FDIC 

as receiver in exercising its rights and 

fulfilling its obligations under Title II of 

the Act (the ‘‘final rule’’ or ‘‘rule’’).1


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65510 Federal Register / Vol. 83, No. 245 / Friday, December 21, 2018 / Rules and Regulations 

2 31 CFR 148.3(c)(3). 

3 12 U.S.C. 5390(c)(8), (9), and (10). 

4 12 U.S.C. 5390(c)(8)(H)(iv). 

5 31 CFR 148.3(c)(4)(i). 

6 12 U.S.C. 148.3(c)(4)(ii). 

7TCH has since been succeeded by the Bank 

Policy Institute. 

8The participants in the TCH–SIFMA working 

group are Bank of America Corporation; BancWest 

Corporation; The Bank of New York Mellon 

Corporation; Barclays US LLC; BB&T Corporation; 

BMO Financial Corp.; Capital One Financial 

Corporation; Citigroup Inc.; Citizens Financial 

Group, Inc.; Comerica Incorporated; Credit Suisse 

Holdings (USA), Inc.; Deutsche Bank Trust 

Corporation; Fifth Third Bancorp; The Goldman 

Sachs Group, Inc.; HSBC North America Holdings 

Inc.; JPMorgan Chase & Co.; KeyCorp; M&T Bank 

Corporation; Morgan Stanley; MUFG Americas 

Holding Corporation; Nomura Holding America 

Inc.; Nuveen, LLC; The PNC Financial Services 

Group, Inc.; RBC USA Holdco Corporation; Regions 

Financial Corporation; Santander Holdings USA, 

Inc.; State Street Corporation; SunTrust Banks, Inc.; 

Teachers Insurance and Annuity Association of 

America; Toronto Dominion Holdings (U.S.A.), Inc.; 

US Bancorp; UBS Americas, Inc.; and Wells Fargo 

& Company. 

9See 81 FR at 75624–25. 

10See, e.g., 12 U.S.C. 5390(a)(1)(G)(i). 

11 12 U.S.C. 5390(c)(9)(A). 

12 12 U.S.C. 5390(c)(11). 

13The FDIC consulted with staff of the Board of 

Governors of the Federal Reserve System (‘‘Board of 

Governors’’), the Commodity Futures Trading 

Commission (‘‘CFTC’’), and the Securities and 

Exchange Commission (‘‘SEC’’). 

14All exemptions to the recordkeeping 

requirements of the rule are made at the discretion 

of the Secretary, and the Secretary’s discretion is 

not limited by any recommendations received from 

other agencies. Exemptions to the FDIC’s 

recordkeeping rules under 12 CFR part 371 

(Recordkeeping Requirements for Qualified 

Financial Contracts) are at the discretion of the 

board of directors of the FDIC and entail a separate 

request and process and separate policy 

considerations. References to the FDIC in this 

notice should not be taken to imply that the FDIC 

has determined that similar exemptions under Part 

371 would be available. 

15Such transactions are qualified financial 

contracts as defined in Title II of the Dodd-Frank 

Act and the rule. See 12 U.S.C. 5390(c)(8)(D)(ii)(I), 

(vi)(I); 31 CFR 148.2(m). 

Section 148.3(c)(3) of the rule 

provides that one or more records 

entities may request an exemption from 

one or more of the requirements of the 

rule by writing to the Department of the 

Treasury (‘‘Treasury’’), the FDIC, and 

the applicable primary financial 

regulatory agency or agencies, if any.2

The written request for an exemption 

must: (i) Identify the records entity or 

records entities or the types of records 

entities to which the exemption would 

apply; (ii) specify the requirements from 

which the records entities would be 

exempt; (iii) provide details as to the 

size, risk, complexity, leverage, 

frequency and dollar amount of QFCs, 

and interconnectedness to the financial 

system of each records entity, to the 

extent appropriate, and any other 

relevant factors; and (iv) specify the 

reasons why granting the exemption 

will not impair or impede the FDIC’s 

ability to exercise its rights or fulfill its 

statutory obligations under sections 

210(c)(8), (9), and (10) of the Act.3

The rule provides that, upon receipt 

of a written recommendation from the 

FDIC, prepared in consultation with the 

primary financial regulatory agency or 

agencies for the applicable records 

entity or entities, that takes into 

consideration each of the factors 

referenced in section 210(c)(8)(H)(iv) of 

the Act 4 and any other factors the FDIC 

considers appropriate, the Secretary 

may grant, in whole or in part, a 

conditional or unconditional exemption 

from compliance with one or more of 

the requirements of the rule to one or 

more records entities.5 The rule further 

provides that, in determining whether to 

grant an exemption, the Secretary will 

consider any factors deemed 

appropriate by the Secretary, including 

whether application of one or more 

requirements of the rule is not necessary 

to achieve the purpose of the rule.6

Requests for Exemptions 

Overview 

On August 23, 2017, The Clearing 

House Association L.L.C. (‘‘TCH’’) and 

the Securities Industry and Financial 

Markets Association (‘‘SIFMA’’ and, 

together with TCH, ‘‘TCH–SIFMA’’ or 

the ‘‘associations’’), jointly submitted a 

written request for seven separate 

exemptions from certain recordkeeping 

requirements of the rule.7 The 

associations’ request was submitted on 

behalf of 33 corporate groups that are 

members of a working group organized 

by TCH–SIFMA.8 As discussed in 

greater detail below, TCH–SIFMA 

requested an exemption (1) for cash 

market transactions, (2) for transactions 

that mature overnight, (3) for seeded 

funds, (4) for subsidiaries of excluded 

entities, (5) for corporate groups for 

which the preponderance of assets and 

derivatives exposures in the group are 

in an insured depository institution, (6) 

for entities that are not identified as 

material entities in a corporate group’s 

resolution plan, and (7) from the 

requirement to report, in the corporate 

organization master table, excluded 

entities and non-financial companies of 

a corporate group. 

As discussed more fully in the 

preamble to the final rule,9 the FDIC has 

the authority under Title II of the DoddFrank Act to transfer the assets and 

liabilities of any financial company for 

which it has been appointed receiver 

under Title II (a ‘‘covered financial 

company’’) to either a bridge financial 

company established by the FDIC or to 

another financial institution.10 The 

FDIC generally has broad discretion 

under Title II as to which QFCs it 

transfers to the bridge financial 

company or to another financial 

institution, subject to certain 

limitations, including the requirement 

that, if the FDIC is to transfer a QFC 

with a particular counterparty, it must 

transfer to a single financial institution 

(i) all QFCs between the covered 

financial company and such 

counterparty and (ii) all QFCs between 

the covered financial company and any 

affiliate of such counterparty.11

Similarly, if the FDIC determines to 

disaffirm or repudiate any QFC with a 

particular counterparty, it must 

disaffirm or repudiate (i) all QFCs 

between the covered financial company 

and such counterparty and (ii) all QFCs 

between the covered financial company 

and any affiliate of such counterparty.12

This requirement is referred to as the 

‘‘all or none rule.’’ 

Treasury received a recommendation 

from the FDIC, prepared in consultation 

with the relevant primary financial 

regulatory agencies,13 regarding the 

TCH–SIFMA exemption requests. After 

consultation with the FDIC, Treasury is 

making the determinations discussed 

below.14 The remaining exemption 

requests by TCH–SIFMA will be 

addressed separately. 

Cash Market Transactions 

TCH–SIFMA requested an exemption 

from all of the recordkeeping 

requirements of the rule for any cash 

market QFC that typically settles in 

accordance with a market standard 

settlement cycle. For purposes of this 

discussion, ‘‘cash market QFC’’ refers to 

an agreement to purchase or sell an 

equity or fixed income security or, in 

the case of a foreign exchange spot 

transaction, an agreement to purchase or 

sell one currency in exchange for 

another currency.15

The associations stated that requiring 

recordkeeping for these transactions is 

unnecessary because (1) cash market 

QFCs are standardized and do not have 

unique terms and, accordingly, the 

relevant data for FDIC decision making 

as to whether to transfer such QFCs 

would be limited to identifying 

counterparties to such QFCs and the net 

exposure with such counterparties; (2) 

records entities execute a high volume 

of cash market QFCs on a daily basis, 

making compliance with the daily 

recordkeeping requirements with 

respect to such transactions 

burdensome; (3) records entities already 

have systems in place for evaluating 

counterparty exposure on a net basis 


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Federal Register / Vol. 83, No. 245 / Friday, December 21, 2018 / Rules and Regulations 65511 

16See Letter from TCH, SIFMA, the American 

Bankers Association, the Financial Services 

Roundtable, and the International Swaps and 

Derivatives Association, Inc. (April 7, 2015), pp. 

21–22. 

17 81 FR at 75637. 

18 ‘‘T plus 3’’ means the trade date plus three 

business days. The vast majority of cash market 

QFCs settle on a T plus 3 or shorter basis. 19See 12 U.S.C. 5390(a)(9)(E). 

20As discussed in the preamble to the final rule, 

the FDIC is required to confirm that the aggregate 

amount of liabilities, including QFCs, of the 

covered financial company that are transferred to, 

or assumed by, the bridge financial company from 

the covered financial company do not exceed the 

aggregate amount of the assets of the covered 

financial company that are transferred to the bridge 

financial company from the covered financial 

company. See 12 U.S.C. 5390(h)(5)(F); 81 FR at 

75626, 75649. 

21See, e.g., 17 CFR 240.17a–3, 17a–4. 

22See 81 FR at 75648. 

and the FDIC should use these existing 

systems for cash market QFCs, rather 

than imposing the burden of new 

recordkeeping requirements for cash 

market QFCs, particularly since they are 

short-dated and thus most will not be in 

existence on any particular date when 

the FDIC is appointed receiver of a 

records entity; (4) these transactions 

pose little risk to records entities due to 

their limited leverage and complexity 

and short settlement period; and (5) the 

FDIC would likely focus on ensuring the 

settlement of cash market QFCs rather 

than repudiating or disaffirming them 

which, TCH–SIFMA argued, would 

undermine financial stability in the 

event of adverse market conditions. 

The associations raised points similar 

to the foregoing in their comment letter 

submitted in response to Treasury’s 

proposal of the rule.16 In adopting the 

final rule, Treasury noted, with respect 

to this comment, that all QFCs, 

including cash market QFCs, are subject 

to the all or none rule. Treasury also 

stated that the large volume of these 

short-term transactions supports the 

determination that to be useful to the 

FDIC, any QFC records must be 

maintained in the standard format 

specified in the final rule to ensure 

rapid aggregation and evaluation of the 

information by the receiver. For these 

reasons, Treasury determined not to 

exclude or otherwise provide an 

exemption for cash market QFCs in the 

rule but noted the rule’s provision for 

requests for further exemptive relief. 

Treasury further stated that any request 

for such an exemption would need to be 

defined in such a way as to ensure 

consistency of treatment by any records 

entity.17

In response to the present exemption 

request, Treasury believes that an 

exemption can be granted for cash 

market QFCs that would be consistent 

across records entities and that would 

permit the FDIC to comply with its 

obligations and fulfill its responsibilities 

under Title II of the Act, including the 

all or none rule. Specifically, Treasury 

is granting an exemption applicable to 

all records entities for cash market QFCs 

that have standardized terms and that 

have a ‘‘T plus 3’’ 18 or shorter 

settlement cycle, conditioned on records 

entities maintaining certain limited 

records. 

As noted by the associations, cash 

market QFCs present settlement risk— 

the risk that the counterparty to the QFC 

defaults on its obligation to perform on 

the settlement date. In the case of a 

securities transaction, settlement 

involves the payment of a fixed price 

against the delivery of a security; in the 

case of a foreign exchange spot 

transaction, settlement involves the 

payment of a fixed amount of one 

currency against the delivery of an 

amount of a second currency equal to 

the fixed amount adjusted by the foreign 

exchange spot rate as of the time the 

transaction is executed. Although 

settlement risk may increase during a 

period of general financial distress that 

could prevail during the resolution of a 

covered financial company under Title 

II, the risk that a settlement failure 

could occur and the risk of any loss to 

the covered financial company, or the 

bridge financial company (or other 

financial institution) if the QFC is 

transferred, are largely mitigated by, 

depending on the nature of the cash 

market QFC, collateral posted by the 

counterparty and central clearing and 

settlement. In addition, a cash market 

QFC could present market risk in that 

the market value of a security or foreign 

currency that the covered financial 

company has agreed to purchase could 

fall during the settlement period to a 

value below the purchase price, a risk 

that could also increase during a period 

of general financial distress. This risk is 

partially mitigated by the limited length 

of the settlement period. 

The FDIC is required, to the extent 

practicable, to conduct its operations as 

receiver for a covered financial 

company, including making QFC 

transfer decisions, in a way that 

mitigates the potential for serious 

adverse effects to the financial system.19

Given that cash market QFCs that meet 

the exemption criteria generally impose 

relatively limited risk, the FDIC’s 

primary objectives in deciding whether 

to transfer cash market QFCs likely 

would be to maintain the continuity of 

the former operations of the covered 

financial company, to maintain the 

operations of the clearing agencies for 

cash market QFCs, and to otherwise 

avoid disruption to the financial 

markets. In such a case, the position 

level data provided by the 

recordkeeping requirements of the rule, 

as applied to cash market QFCs, would 

be less critical for the FDIC’s transfer 

decisions. 

With respect to QFCs other than cash 

market QFCs, other considerations 

would more likely bear on the FDIC’s 

transfer decisions. In addition to 

considering financial stability 

implications, the FDIC would have to 

weigh whether the transfer of QFCs 

would be detrimental to the financial 

position of the bridge financial 

company. At a minimum, the FDIC 

would need to ensure that the bridge 

financial company would be solvent 

after the transfer of any assets and 

liabilities to it.20 But given the all or 

none rule, for a covered financial 

company that has both cash market 

QFCs and non-cash market QFCs with a 

counterparty or with that counterparty’s 

affiliates, the FDIC would need certain 

information about the cash market QFCs 

to inform its transfer decisions. 

As noted above, TCH–SIFMA argued 

that with respect to any cash market 

QFCs, the records that records entities 

already maintain for their own business 

purposes and, in the case of brokerdealers, that are required by the SEC 

would be sufficient for the FDIC.21

Given the time constraints imposed on 

the FDIC’s decisionmaking by Title II, as 

discussed in the preamble to the final 

rule, the FDIC generally needs 

information about QFCs to be 

maintained in the standardized format 

provided by the rule.22 As discussed 

below, the FDIC may be able to refer to 

existing records in certain cases to 

evaluate a covered financial company’s 

exposure as a result of its cash market 

QFCs, but the FDIC nevertheless would 

need certain limited information to be 

maintained in the standardized format 

provided by the rule. 

Under the terms of the exemption 

provided below, with respect to a 

counterparty that is a natural person, if 

a records entity only has cash market 

QFCs with that counterparty, the 

records entity would not be required to 

maintain any record of those QFCs 

because the all or none rule would 

apply only to those cash market QFCs. 

With respect to a counterparty that is a 

non-natural person, if the records 

entity’s QFCs with the counterparty and 

the counterparty’s affiliates, if any, are 

limited to cash market QFCs and other 


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65512 Federal Register / Vol. 83, No. 245 / Friday, December 21, 2018 / Rules and Regulations 

23Overnight repurchase agreements and reverse 

repurchase agreements and overnight securities 

borrowing and lending agreements are qualified 

financial contracts as defined in Title II of the 

Dodd-Frank Act and the rule. See 12 U.S.C. 

5390(c)(8)(D)(ii)(I), (v); 31 CFR 148.2(m). 

24See 12 U.S.C. 5390(c)(10)(B)(i). 

exempt QFCs (i.e., unless another 

exemption has been provided to a 

specific records entity, the overnight 

QFCs discussed separately below), the 

records entity would need to identify 

the date of the record (fields A1.1, A2.1, 

A3.1, and BL.1 of Tables A–1 through 

A–3 and the Booking Location Master 

Table, respectively, of Appendix A to 

the rule), the records entity identifier 

(fields A1.2, A2.2, A3.2, and BL.2), the 

position identifier (field A1.3), the 

counterparty identifier (fields A1.4, 

A1.10, A2.3, and A3.6), and the QFC 

type (field A1.7) and maintain the 

information required by the corporate 

organization master table and the 

counterparty master table. With respect 

to the QFC type field (field A1.7), the 

records entity would be permitted 

simply to record ‘‘cash market QFC’’ as 

the QFC type. This would permit the 

FDIC to verify that no additional QFCs 

would be subject to the all or none rule 

as a result of the transfer or retention of 

the cash market QFCs with that 

counterparty. 

If a records entity, in addition to its 

cash market QFCs with the 

counterparty, also has non-exempt QFCs 

with either the counterparty (whether 

the counterparty is a natural person or 

not) or with its affiliates, if any, the 

same information with respect to cash 

market QFCs would be required to be 

maintained by the records entity as 

described in the paragraph above except 

that the QFC type (field A1.7) would be 

required to be recorded at the same level 

of specificity as the records entity 

classifies the QFC in its internal systems 

(e.g., as a foreign exchange spot 

transaction or more specifically as a 

U.S. dollar/Japanese yen spot 

transaction, depending on how the 

records entity classifies the QFC in its 

internal systems), as is currently the 

case for QFCs not subject to any 

exemption. For such cases, a separate 

record would be required to be 

maintained for each such QFC type for 

each particular counterparty. Different 

cash market QFC types may present 

different considerations for the FDIC’s 

transfer determination, and including 

the QFC type in the standardized 

records of the records entity would 

permit the FDIC to identify quickly the 

QFC positions about which it may need 

more information. The FDIC may 

determine, for instance, that, given 

prevailing market conditions or the 

business of the covered financial 

company, it would need more 

information about the exposure of a 

covered financial company with respect 

to its spot transactions in a particular 

currency. The QFC product type is also 

expected to be helpful to the FDIC in 

obtaining from the covered financial 

company the relevant internal records 

relating to such QFCs because corporate 

groups may use different internal 

systems to maintain records regarding 

different QFC types. 

For the reasons discussed above, in 

order to be useful to the FDIC, the 

information specified above would have 

to be maintained in the same 

standardized format as applies to the 

recordkeeping requirements of the rule 

generally, but for fields other than those 

specified above, records entities may 

provide specified default entries. No 

entries relating to such exempted QFCs 

would need to be provided with respect 

to Table A–4 (collateral detail data) or 

the safekeeping agent master table. 

Tables specifying the data that would be 

required to be provided for exempted 

cash market QFCs and, as discussed 

below, overnight QFCs are set forth in 

Appendix A to this notice. 

Overnight QFCs 

TCH–SIFMA requested an exemption 

from all of the recordkeeping 

requirements of the rule for QFCs that 

are overnight repurchase agreements 

and reverse repurchase agreements or 

overnight securities borrowing and 

lending agreements (‘‘overnight 

QFCs’’).23 Such overnight QFCs provide 

that the transaction will terminate on 

the business day following the day the 

transaction is entered into. The 

associations asserted that, for this 

reason, transaction-specific information 

regarding overnight QFCs is not relevant 

to any decision by the FDIC regarding 

which QFCs to transfer to the bridge 

financial company. The associations 

also asserted that, because the rule 

requires records to be maintained based 

on values and information that are no 

less current than previous end of day 

values, the records required by the rule 

would not include information 

regarding overnight QFCs that are 

outstanding on the day the receiver is 

appointed. 

The one business day stay relating to 

QFCs of the covered financial company 

discussed in the preamble to the final 

rule lasts until the earlier of 5:00 p.m. 

Eastern Time on the business day 

following the date of the appointment of 

the FDIC as receiver or the FDIC’s notice 

to the counterparty of the transfer of the 

QFC.24 During such stay, the FDIC may 

decide to structure asset transfers of a 

covered financial company such that 

QFCs would be transferred as of a time 

prior to the termination of the overnight 

QFCs, and the all or none rule would 

apply in connection with such a 

transfer. As with cash market QFCs, the 

FDIC could transfer overnight QFCs to 

the bridge financial company to help 

maintain the continuity of the former 

operations of the covered financial 

company and to otherwise avoid 

disruption to the financial markets. The 

settlement risk and market risk of 

overnight securities lending and 

repurchase and reverse repurchase 

agreements are partially mitigated by 

their short duration, collateralization 

requirements, and, with respect to much 

of the repurchase and reverse 

repurchase agreement market, central 

clearing. However, if the receiver 

decided to retain any non-overnight 

QFCs with a counterparty, it would also 

need to retain any overnight QFCs with 

that counterparty and that 

counterparty’s affiliates. TCH–SIFMA’s 

contention that the records would not 

provide information regarding any 

overnight QFCs entered into on the day 

the FDIC is appointed as receiver does 

not take into consideration the FDIC’s 

ability to obtain records on the day 

following its appointment as receiver of 

QFCs entered into on the day of its 

appointment as receiver. 

Absent a transfer of the contract by 

the FDIC, an overnight QFC would 

remain with the covered financial 

company and simply terminate in 

accordance with its terms, and the 

counterparty to the overnight 

transaction would be able to exercise its 

rights under the terms of the QFC. If the 

FDIC were to contemplate retaining an 

overnight transaction in the 

receivership, the FDIC would need more 

information about the transaction in 

order to assess the effect of doing so. As 

with cash market QFCs, the limited 

recordkeeping requirements set forth 

below are expected to facilitate the 

FDIC’s ability to consult the records 

entity’s internal records to obtain the 

information needed to make this 

assessment. 

Under the terms of the exemption, the 

same set of records would need to be 

maintained with regard to overnight 

QFCs as would be required to be 

maintained with respect to cash market 

QFCs as set forth above. Specifically, if 

the records entity’s QFCs with the 

counterparty and the counterparty’s 

affiliates, if any, are limited to overnight 

QFCs and other exempt QFCs (i.e., 

unless another exemption has been 

provided to a specific records entity, the 

cash market QFCs discussed separately 


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25 12 U.S.C. 1851. 

26See Letter from TIAA–CREF (Apr. 7, 2015), p. 

6; Letter from the Investment Company Institute 

(Apr. 7, 2015), p. 10. 

27See 81 FR at 75633. In particular, Treasury 

adopted in the final rule the suggestion of 

commenters to revise the definition of ‘‘records 

entity’’ to identify which members of a corporate 

group are records entities by reference to whether 

they are consolidated under accounting standards 

rather than by reference to whether they are 

controlled for purposes of the Bank Holding 

Company Act. See id. 

28See id. The final rule provides a de minimis 

exemption whereby a records entity that is a party 

to 50 or fewer open QFC positions is not required 

to maintain the records described in § 148.4 of the 

rule, other than the records described in § 148.4(i). 

See 31 CFR 148.3(c)(1). 

29 81 FR at 75644. 

30See 12 U.S.C. 1851(d)(4)(A); 12 CFR 248.12(a) 

(the rule adopted by the Board of Governors). The 

other agencies charged with implementing the 

Volcker Rule—the CFTC, the FDIC, the Office of the 

Comptroller of the Currency, and the SEC—have 

adopted substantively identical rules. 

above), the records entity would need to 

identify the date of the record (fields 

A1.1, A2.1, A3.1, BL.1), the records 

entity identifier (fields A1.2, A2.2, A3.2, 

and BL.2), the position identifier (field 

A1.3), the counterparty identifier (fields 

A1.4, A1.10, A2.3, and A3.6), and the 

QFC type (field A1.7) and would need 

to maintain the information required by 

the counterparty master table. With 

respect to the QFC type field (field 

A1.7), in this case, the records entity 

would be permitted simply to record 

‘‘overnight QFC’’ as the QFC type. If a 

records entity, in addition to its 

overnight QFCs with the counterparty, 

also has non-exempt QFCs with either 

the counterparty or with its affiliates, if 

any, the same information with respect 

to overnight QFCs would be required to 

be maintained by the records entity as 

provided above except that the QFC 

type in field A1.7 would be recorded at 

the same level of specificity as the 

records entity classifies the QFC in its 

internal systems (e.g., as a repurchase 

agreement). For such cases, a separate 

record would be required to be 

maintained for each such QFC type for 

each particular counterparty. 

Seeded Funds 

TCH–SIFMA requested an exemption 

from the rule for certain ‘‘covered 

funds’’ and registered investment 

companies and business development 

companies during their ‘‘seeding 

period’’ subject to restrictions imposed 

by section 13 of the Bank Holding 

Company Act of 1956, as amended,25

(known as the ‘‘Volcker Rule’’) and 

implementing rules. The requested 

exemption would apply only to a 

seeded fund that does not on its own 

meet the assets and derivatives 

thresholds for qualifying as a records 

entity. 

Seeded funds are funds in which the 

sponsor has made an initial investment 

of seed capital, amounting to up to 

100% of the equity of the fund, during 

a limited period in which the fund 

establishes an investment record and 

attracts third party investment. Because 

a member of a corporate group that 

includes records entities could, during 

the seeding period, own a sufficient 

amount of the capital of such a seeded 

fund that the seeded fund would 

become an affiliate of the sponsor under 

the rule, the seeded fund, no matter its 

size or level of derivatives activity, 

would be subject to the rule as well, 

provided it otherwise meets the records 

entity definition. 

Treasury considered a similar issue in 

addressing two comments received in 

response to the proposed rule that 

requested an exemption for seeded 

funds.26 Treasury noted in response to 

these comments that changes made to 

the definition of ‘‘records entity’’ in the 

final rule should limit the 

circumstances in which a seeded fund 

would become a records entity by virtue 

of its sponsor’s investment.27 Further, 

Treasury noted that, in the event that 

such a seeded fund were to be deemed 

a records entity under the rule, the fund 

would be able to request an exemption 

from the recordkeeping requirements of 

the final rule for the duration of the 

seeding period; otherwise, the seeded 

fund would be treated as any other 

financial company member of the 

corporate group of a records entity and 

required to maintain records of its QFCs 

if they exceed the de minimis 

threshold.28

In their request for an exemption, 

TCH–SIFMA stated that the final rule 

presents a significant burden with 

regard to corporate groups’ investments 

in seeded funds, sponsored by their 

members, that are records entities even 

with the revised definition adopted in 

the final rule. The associations argued 

that the pursuit of individual 

exemptions by each seeded fund would 

be impractical and burdensome given 

the limited duration of each such fund. 

Further, TCH–SIFMA raised a point not 

previously identified by the commenters 

to the proposed rule as to why an 

exemption would be appropriate for 

seeded funds. Specifically, TCH–SIFMA 

stated that the information barriers, 

such as corporate firewalls intended to 

protect trading positions and the 

confidentiality of asset management 

customers, that companies are required 

to establish between their seeded funds 

and the rest of the corporate group 

would significantly increase the cost of 

these funds’ compliance with the 

recordkeeping requirements of the rule. 

The final rule had presumed that 

companies would likely comply with 

the rules by utilizing a centralized 

recordkeeping system that would 

obviate the need for each member of the 

corporate group to maintain its own 

recordkeeping system in order to 

comply with the rules.29 While the 

additional costs imposed by information 

barriers established within corporate 

groups for regulatory and other reasons 

cannot be avoided in all cases, in this 

case, the additional cost may not be 

justified given that the fund would only 

be required to comply with the rules for 

the relatively short duration of its 

seeding period. 

Given the additional burden faced by 

such funds and the reduced probability 

that the FDIC would need to have QFC 

information from one of these funds 

during the relatively short duration of 

its seeding period, Treasury has 

determined to grant an exemption for 

certain types of seeded funds that do not 

on their own meet the asset or 

derivative thresholds of the records 

entity definition. As proposed by TCH– 

SIFMA, the exemption is formulated to 

be consistent with the exemptions 

provided by the Volcker Rule and its 

implementing regulations with respect 

to such seeded funds. Although the 

Volcker Rule and this recordkeeping 

rule have different purposes, the 

limitations imposed on the 

exemptions—particularly the limitation 

on the seeding period discussed 

below—reduce the likelihood that the 

FDIC would need the QFC records of 

such a fund. Further, using the existing 

framework of the Volcker Rule permits 

records entities that are already subject 

to the Volcker Rule to rely on their 

compliance with the Volcker Rule in 

order to meet the conditions of this 

exemption. 

The Volcker Rule imposes various 

prohibitions on proprietary trading by 

‘‘banking entities’’ and on banking 

entities’ investments in and 

relationships with certain funds, 

including, generally, private equity and 

hedge funds, referred to as ‘‘covered 

funds.’’ The Volcker Rule and its 

implementing regulations provide an 

exemption from the general prohibition 

on banking entity investments in 

covered funds if the investment is for 

the purpose of establishing the fund and 

providing it with sufficient initial equity 

to permit it to attract unaffiliated 

investors.30 Such a seed investment 

must not exceed, together with other 

permissible investments by the banking 

entity and its affiliates in covered funds, 


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31See 12 U.S.C. 1851(d)(4)(B)(ii)(II); 12 CFR 

248.12(a)(1)(ii). 

32See 12 U.S.C. 1851(d)(4)(B), (C), 12 CFR 

248.12(a)(2). 

33As relates to the funds discussed herein, this 

exemption extends to an entity (i) that is registered 

as an investment company under section 8 of the 

Investment Company Act of 1940 (15 U.S.C. 80a– 

8), or that is formed and operated pursuant to a 

written plan to become a registered investment 

company as described in 12 CFR 248.20(e)(3) and 

that complies with the requirements of section 18 

of the Investment Company Act of 1940 (15 U.S.C. 

80a–18); or (ii) that has elected to be regulated as 

a business development company pursuant to 

section 54(a) of that Act (15 U.S.C. 80a–53) and has 

not withdrawn its election, or that is formed and 

operated pursuant to a written plan to become a 

business development company as described in 12 

CFR 248.20(e)(3) and that complies with the 

requirements of section 61 of the Investment 

Company Act of 1940 (15 U.S.C. 80a–60). See 12 

CFR 248.10(c)(12)(i), (iii). 

34See Board of Governors, Frequently Asked 

Questions, No. 16, https://www.federalreserve.gov/ 

bankinforeg/volcker-rule/faq.htm. (Substantively 

identical frequently asked questions have been 

issued by the other implementing agencies.) 

35 Id. The guidance provides that the seeding 

period generally would be measured from the date 

on which the investment adviser or similar entity 

begins making investments pursuant to the written 

investment strategy of the fund. 

36See Proposed Revisions to Prohibitions and 

Restrictions on Proprietary Trading and Certain 

Interests in, and Relationships With, Hedge Funds 

and Private Equity Funds, 83 FR 33432, 33444–45 

(July 17, 2018). 

37As defined in the final rule, ‘‘excluded entity’’ 

means an insured depository institution, certain 

subsidiaries of an insured depository institution, or 

an insurance company. 31 CFR 148.2(f). 

38As defined in the final rule (by cross-reference 

to 12 U.S.C. 5381(a)(11)), the term ‘‘financial 

company’’ includes only companies that are 

‘‘incorporated or organized under any provision of 

Federal law or the laws of any State.’’ 31 CFR 

148.2(g). 39See 12 U.S.C. 5390(c)(16); 81 FR at 75642. 

3% of the tier 1 capital of the banking 

entity.31 Further, during the seeding 

period, the banking entity and its 

affiliates must actively seek unaffiliated 

investors in order to reduce the banking 

entity’s investment in the fund to 3% or 

less of the total number or value of 

shares or other ownership interests of 

the fund, and the seeding period may 

not last for more than one year, unless 

extended by the Board of Governors for 

up to a maximum of two additional 

years.32 The exemption granted by 

Treasury for covered funds is subject to 

the condition that the investments by a 

corporate group in the covered fund that 

cause the covered fund to become a 

member of the corporate group must be 

permitted pursuant to the Volcker 

Rule’s seeded funds exemption 

described above. 

Separately, the Volcker Rule 

implementing regulations provide that 

registered investment companies, 

business development companies, and 

companies formed for the purpose of 

becoming registered investment 

companies and business development 

companies are excluded from the 

definition of ‘‘covered fund.’’ 33 Further, 

the agencies implementing the Volcker 

Rule have provided staff guidance that 

such funds should not be considered to 

be banking entities under the 

implementing rules if the fund is 

established with a limited seeding 

period.34 Without this relief, such funds 

(referenced as ‘‘registered investment 

companies and business development 

companies’’ in the exemption below) 

would themselves be subject to the 

prohibitions on proprietary trading and 

covered funds investments by banking 

entities. As to the length of the limited 

seeding period, the guidance cites, as an 

example, the maximum three year 

limitation on the permissible 

investments in seeded funds by covered 

funds discussed above.35 The agencies 

in their recent proposal to amend the 

implementing regulations raised 

questions as to whether the length of the 

permitted seeding period should be 

made more definite, perhaps with 

provision for extensions.36 The 

exemption granted by Treasury provides 

relief for registered investment 

companies and business development 

companies that are not deemed to be 

banking entities as a result of being in 

their seeding periods pursuant to the 

above described guidance or the 

implementing regulations, should they 

be amended to provide for similar relief. 

Corporate Organization Table 

The rule requires that information 

regarding a records entity’s affiliates be 

maintained in a corporate organization 

master data lookup table, set forth in 

appendix A to the rule. The rule 

requires this information to be 

maintained on a daily basis by a records 

entity with respect to itself and all of the 

members of its corporate group, which 

includes all of the records entity’s 

affiliates whether or not those entities 

meet the definitions of ‘‘records entity’’ 

or ‘‘financial company’’ under the rule. 

TCH–SIFMA requested an exemption 

from this requirement such that a 

records entity may exclude from the 

corporate organization master table any 

affiliate that is an excluded entity 37 or 

that is not a financial company because 

it is not organized under the provisions 

of Federal law or the laws of any U.S. 

state; i.e., because it is a non-U.S. 

affiliate.38 TCH–SIFMA stated that these 

requirements are burdensome; that the 

reasons cited in the preamble to the 

final rule for including affiliates in this 

table do not support the inclusion of 

such entities; and that information that 

would be included in the table about 

these affiliates would not be useful to 

the FDIC as receiver. 

Treasury determined in the final rule, 

and reaffirms in this notice, that it is 

important for the FDIC to have access to 

this information in the event it is 

appointed receiver of a covered 

financial company. As discussed in the 

preamble to the final rule, under section 

210(c)(16) of the Dodd-Frank Act, the 

QFCs of subsidiaries or affiliates of a 

covered financial company that are 

guaranteed or otherwise supported by or 

linked to such covered financial 

company can be enforced by the FDIC 

as receiver of the covered financial 

company notwithstanding the 

insolvency, financial condition, or 

receivership of the covered financial 

company if the FDIC transfers the 

guarantee or other support to a bridge 

financial company or other third 

party.39 The FDIC’s decision as to 

whether to transfer such a guarantee or 

credit support pursuant to sections 

210(c)(9) and (10) of the Act may be 

influenced by the information required 

to be maintained as to a records entity’s 

affiliates. In particular, the FDIC as 

receiver may need to know whether the 

affiliate is a wholly-owned subsidiary or 

a partially-owned subsidiary since the 

extent of such control over the 

subsidiary would likely be a factor the 

FDIC considers in making any such 

transfer decision. Information about 

affiliates of the records entity will also 

provide the FDIC, in the event of a 

resolution of a covered financial 

company, with greater certainty that the 

required QFC records from each records 

entity have been maintained by 

allowing the FDIC to quickly ascertain, 

by reference to field CO.12 (regarding 

the entity’s reporting status), whether 

the entity has not maintained records 

because it is not a party to any QFCs, 

has availed itself of the de minimis 

exemption (in which case the FDIC 

would need to manually review the 

available QFC records) or another 

exemption, or is excluded from the 

definition of ‘‘records entity.’’ 

Furthermore, although the 

associations asserted the FDIC could 

obtain this information from other 

sources, particularly, in the case of bank 

holding companies, from the Report of 

Changes in Organizational Structure on 

Form FR Y–10, as with other elements 

of the recordkeeping requirements of the 

rule, it is important for the FDIC to have 

access to this information in a readilyusable format. In this case, the 

information in the corporate 

organization master data lookup table is 

linked to information recorded in the 


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40See 12 U.S.C. 5365(d). Pursuant to section 165 

of the Dodd-Frank Act, as amended by the 

Economic Growth, Regulatory Relief, and Consumer 

Protection Act, Public Law 115–174 (May 24, 2018), 

enhanced prudential standards, including the 

resolution plan requirements provided by section 

165(d) of the Act, are applied to bank holding 

companies with $250 billion or more in total 

consolidated assets and nonbank financial 

companies supervised by the Board of Governors. 

In addition, the Board of Governors has the 

authority to apply any such standard, including the 

resolution plan requirements provided by section 

165(d) of the Act, to bank holding companies with 

$100 billion or more in total consolidated assets if 

it determines that application of the standard is 

appropriate to prevent or mitigate risks to U.S. 

financial stability or to promote safety and 

soundness. 

41See 12 CFR 243.4 (Board of Governors rule); 12 

CFR 381.4 (FDIC rule). 

42 12 CFR 243.2(l), 381.2(l). 

43 12 U.S.C. 243.2(d), 381.2(d). 

44 12 U.S.C. 243.2(g), 381.2(g). 

45See Letter from TCH, SIFMA, the American 

Bankers Association, the Financial Services 

Roundtable, and the International Swaps and 

Derivatives Association, Inc. (April 7, 2015), pp. 

14–15. 

46See 81 FR at 75630. 

47 12 U.S.C. 5390(a)(1)(E)(i). ‘‘Covered subsidiary’’ 

is defined as any subsidiary of a covered financial 

company, other than an insured depository 

institution, an insurance company, or a covered 

broker or dealer. 12 U.S.C. 5381(a)(9). 48See 81 FR at 75630; 12 U.S.C. 5390(a)(1)(E)(ii). 

other tables required under the final 

rule. 

Nevertheless, Treasury accepts that 

the requirement to provide daily 

updating of information pertaining to 

excluded entity and non-U.S. affiliates 

imposes a significant burden on records 

entities. Treasury has determined to 

grant an exemption such that this 

information need only be updated 

within 30 days of a change. This 30-day 

period aligns with the existing 

requirement imposed by Form FR Y–10, 

and this accommodation should not 

significantly impair the FDIC’s ability to 

make the determinations discussed 

above. 

Entities That Are Not Material Entities 

Under a Group’s Resolution Plan 

TCH–SIFMA requested an exemption 

from the recordkeeping requirements of 

the rule for any records entity that is not 

identified as a ‘‘material entity’’ in its 

corporate group’s resolution plan filed 

under section 165(d) of the Dodd-Frank 

Act. Certain financial companies— 

including bank holding companies with 

at least $250 billion in total 

consolidated assets and nonbank 

financial companies for which the FSOC 

has made a determination under section 

113 of the Act—are required to file 

plans with the FDIC, the Board of 

Governors, and FSOC for their 

resolution under the Bankruptcy 

Code.40 Under the implementing rules 

jointly adopted by the FDIC and Board 

of Governors, such financial companies 

are required to identify and provide 

certain information regarding their 

material entities.41 ‘‘Material entities’’ is 

defined by the implementing rules as 

including subsidiaries that are 

significant to the activities of a critical 

operation or core business line.42 The 

term ‘‘core business lines’’ is defined as 

those business lines, including 

associated operations, services, 

functions and support that, in the view 

of the financial company, upon failure 

of the financial company would result 

in a material loss of revenue, profit, or 

franchise value.43 ‘‘Critical operations’’ 

is defined as the operations of a 

financial company, including associated 

operations, services, functions and 

support, the failure or discontinuance of 

which, in the company’s view or as 

jointly directed by the Board of 

Governors and the FDIC, would pose a 

threat to the financial stability of the 

United States.44 TCH–SIFMA stated that 

these material entities are the entities in 

a group that either would be the most 

likely to be subject to a Title II 

proceeding themselves or that would 

otherwise be material to such a 

proceeding. 

TCH–SIFMA raised the same point in 

a comment letter submitted in response 

to the proposed rule and has not 

presented any additional information in 

support of this request.45 As discussed 

in the preamble to the final rule,46

Treasury noted that an entity that is part 

of a larger corporate group could be 

resolved under Title II without the 

Secretary making the systemic risk 

determination required under section 

203(b) of the Act with respect to that 

particular entity. Section 210(a)(1)(E) of 

the Act provides that the FDIC may 

appoint itself as receiver of an entity if 

it is a ‘‘covered subsidiary’’ of a covered 

financial company of which the FDIC 

has been appointed as receiver and it is 

jointly determined by the FDIC and the 

Secretary that (i) the covered subsidiary 

is in default or in danger of default, (ii) 

the FDIC’s appointment as receiver 

would avoid or mitigate serious adverse 

effects on the financial stability or 

economic conditions of the United 

States, and (iii) the FDIC’s appointment 

as receiver would facilitate the orderly 

liquidation of the covered financial 

company.47 As Treasury noted in the 

preamble to the final rule, if the FDIC 

appoints itself receiver of a covered 

subsidiary, that subsidiary is treated as 

a covered financial company for 

purposes of Title II, and the FDIC as 

receiver would have the same rights 

under the Act and the same obligations 

under sections 210(c)(8), (9), and (10) of 

the Act as it does for other covered 

financial companies.48

Furthermore, the definition of 

‘‘material entity’’ for purposes of the 

resolution plan is not well aligned with 

the likelihood of a company being 

resolved under Title II. In particular, the 

question of whether an entity is material 

to the financial company’s core business 

lines is based on the materiality of its 

revenue, profit, or franchise value to the 

financial company. In contrast, 

Treasury, in making a systemic risk 

determination regarding a covered 

financial company under section 203(b) 

of the Act, and Treasury and the FDIC, 

in making a joint determination as to the 

FDIC’s appointment as receiver of a 

covered subsidiary under section 

210(a)(1)(E) of the Act, would be making 

a determination as to, among other 

things, the effects of the company’s 

failure on U.S. financial stability. It is 

possible, for example, that an entity is 

not material to the core business lines 

of a financial company or to its critical 

operations and yet, because of the 

nature and extent of particular 

exposures the market has to that entity 

or because of the amount and nature of 

the assets it would liquidate if it were 

to be resolved in a disorderly manner 

outside of Title II, the entity could be 

resolved under Title II in order to 

preserve U.S. financial stability. It is not 

the case, therefore, that an entity that 

has not been identified as a material 

entity is, by virtue of not having been 

so identified, less likely to be resolved 

under Title II than an entity that has 

been identified as a material entity. 

Furthermore, because, as discussed 

above, the identification of an entity as 

a material entity is made based on the 

entity’s materiality to its own corporate 

group, the proposed standard cannot be 

applied in a uniform way across 

corporate groups that are required to file 

resolution plans. For these reasons, 

Treasury has determined not to provide 

the requested exemption. 

Conditions of the Exemptions 

Any records entity subject to the rule 

may avail itself of the exemptions 

granted herein. With respect to each of 

the exemptions granted herein, Treasury 

reserves the right to rescind or modify 

the exemption at any time. Treasury 

intends to reassess the exemptions in 

five years. At that time, Treasury, in 

consultation with the FDIC and the 

primary financial regulatory agencies, 

would evaluate any relevant changes to 

market structure or applicable law or 

other relevant factors that might affect 

the reasons for granting the exemptions. 


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Treasury expects that it would provide 

notice to records entities prior to any 

modification or rescission of any of the 

exemptions and that, in the event of a 

rescission or modification, Treasury 

would grant records entities a limited 

period of time in which to come into 

compliance with the applicable 

recordkeeping requirements of the rule. 

Terms and Conditions of the 

Exemptions 

The following exemptions from the 

requirements of 31 CFR 148.3 and 148.4 

are hereby granted to any records entity 

subject to the rule. All terms undefined 

below but defined in 31 CFR 148.2 have 

the meanings set forth therein. Each of 

these exemptions is subject to 

modification or revocation at any time 

the Secretary determines that such 

action is necessary or appropriate in 

order to assist the FDIC as receiver for 

a covered financial company in being 

able to exercise its rights and fulfill its 

obligations under sections 210(c)(8), (9), 

or (10). 

Cash Market Transactions 

An exemption from the recordkeeping 

requirements of the rule for any QFC 

that is an agreement to purchase or sell 

an equity or fixed income security or a 

foreign exchange spot transaction (a 

‘‘cash market QFC’’), provided that (i) 

such cash market QFC is executed on 

standardized terms and settles within 

three business days of the trade date and 

(ii) the records entity maintains, with 

respect to such cash market QFC, the 

records as set forth in Appendix A to 

this notice in the format required under 

the rule, provided further that no such 

records are required to be maintained 

for cash market QFCs a records entity 

has with a counterparty that is a natural 

person if the only QFCs the records 

entity has with such counterparty are 

cash market QFCs. With respect to a 

counterparty that is a non-natural 

person, if the records entity’s QFCs with 

the counterparty and the counterparty’s 

affiliates, if any, are limited to cash 

market QFCs or other exempt QFCs, the 

records entity may simply record ‘‘cash 

market QFC’’ as the QFC type (field 

A1.7); otherwise, the records entity 

must record the QFC type (field A1.7) 

for the cash market QFC at the same 

level of specificity as the records entity 

classifies the QFC in its internal 

systems. 

Overnight QFCs 

An exemption from the recordkeeping 

requirements of the rule for any QFC 

that is a repurchase agreement, reverse 

repurchase agreement, securities 

borrowing agreement, or securities 

lending agreement that terminates in 

accordance with its terms on the 

business day following the day it is 

entered into (each an ‘‘overnight QFC’’), 

provided that the records entity 

maintains, with respect to such an 

overnight QFC, the records as set forth 

in Appendix A to this notice in the 

format required under the rule. If the 

records entity’s QFCs with the 

counterparty and the counterparty’s 

affiliates, if any, are limited to overnight 

QFCs or other exempt QFCs, the records 

entity may simply record ‘‘overnight 

QFC’’ as the QFC type (field A1.7); 

otherwise, the records entity must 

record the QFC type (field A1.7) for the 

overnight QFC at the same level of 

specificity as the records entity 

classifies the QFC in its internal 

systems. 

Seeded Funds 

An exemption for an entity that is (i) 

a member of a corporate group with one 

or more banking entities; (ii) a records 

entity solely as a result of the 

application of section 148.2(n)(1)(iii)(E) 

of the rule; and (iii) a covered fund, 

provided that the investments in the 

entity that cause the entity to be a 

member of the corporate group are 

permitted pursuant to the section 13 

rules for the purposes of establishing the 

fund and providing it with sufficient 

initial equity for investment to permit it 

to attract unaffiliated investors. 

An exemption for an entity that is (i) 

a member of a corporate group with one 

or more banking entities; (ii) a records 

entity solely as a result of the 

application of section 148.2(n)(1)(iii)(E) 

of the rule; and (iii) excluded from the 

definition of ‘‘covered fund’’ under the 

section 13 rules as a registered 

investment company or business 

development company, provided that 

the entity is deemed not to be a 

‘‘banking entity’’ as a result of it being 

in its seeding period as provided by the 

section 13 rules or relevant agency 

guidance. 

For purposes of these exemptions, the 

‘‘section 13 rules’’ refers to the rules of 

the Board of Governors of the Federal 

Reserve System, the Commodity Futures 

Trading Commission, the Federal 

Deposit Insurance Corporation, the 

Office of the Comptroller of the 

Currency, or the Securities and 

Exchange Commission, as applicable, 

implementing section 13 of the Bank 

Holding Company Act of 1956, as 

amended (12 U.S.C. 1851); ‘‘covered 

fund’’ and ‘‘banking entity’’ have the 

meanings provided under the section 13 

rules; ‘‘registered investment company’’ 

means a company registered as an 

investment company under section 8 of 

the Investment Company Act of 1940 

(15 U.S.C. 80a–8) or a company formed 

and operated pursuant to a written plan 

to become such a company; and 

‘‘business development company’’ 

means a company that has elected to be 

registered as a business development 

company pursuant to section 54(a) of 

the Investment Company Act of 1940 

(15 U.S.C. 53–a) and has not withdrawn 

its election or a company formed and 

operated pursuant to a plan to become 

such a company. 

Corporate Organization Master Table 

An exemption from the requirement 

of section 148.3(b)(1) of the rule to 

update all records on a daily basis with 

respect to the information, referenced in 

the corporate organization master table 

set forth in appendix A to the rule, 

regarding any affiliate of a records entity 

that is an excluded entity or a non-U.S. 

affiliate, provided that such information 

is updated at least 30 days after a 

change in such information. For 

purposes of this exemption, ‘‘non-U.S. 

affiliate’’ means an affiliate that is not 

organized under any provision of 

Federal law or the laws of any State and 

‘‘State’’ has the meaning provided in 12 

U.S.C. 5301(16). 

Appendix A 

TABLE A–1—POSITION-LEVEL DATA

Field Instructions and data application Definition 

A1.1 As of date ...................................... Provide data extraction date ..................................................................................... YYYY–MM–DD. 

A1.2 Records entity identifier ................. Provide LEI for records entity. Information needed to review position-level data by 

records entity.

Varchar(50). 

A1.3 Position identifier ........................... Provide a unique identifier. Should be used consistently across all record entities 

within the corporate group. Use the unique transaction identifier if available. Information needed to readily track and distinguish positions.

Varchar(100). 


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TABLE A–1—POSITION-LEVEL DATA—Continued 

Field Instructions and data application Definition 

A1.4 Counterparty identifier ................... Provide a counterparty identifier. Use LEI if counterparty has one. Should be 

used consistently by all record entities within the corporate group. Information 

needed to identify counterparty by reference to Counterparty Master Table.

Varchar(50). 

A1.5 Internal booking location identifier Information not required to be provided. Enter ‘‘exempt ’’ ........................................ Varchar(50). 

A1.6 Unique booking unit or desk identifier.Information not required to be provided. Enter ‘‘exempt ’’ ........................................ Varchar(50). 

A1.7 Type of QFC .................................. Provide type of QFC. Use unique product identifier if available. If records entity 

has only QFCs that are cash market QFCs or overnight QFCs with a 

counterparty and its affiliates, may enter ‘‘cash market QFCs’’ or ‘‘overnight 

QFCs,’’ as applicable. If records entity has both cash market/overnight QFCs 

and non-exempt QFCs with a counterparty or with its affiliates, the QFC type 

must be recorded at the same level of specificity as the records entity classifies 

the QFC in its internal systems.

Varchar(100). 

A1.7.1 Type of QFC covered by guarantee or other third party credit enhancement.Information not required to be provided Enter ‘‘NA’’ ................................................. Varchar(500). 

A1.7.2 Underlying QFC obligor identifier Information not required to be provided Enter ‘‘NA’’ ................................................. Varchar(50). 

A1.8 Agreement identifier ...................... Information not required to be provided. Enter ‘‘exempt ’’ ........................................ Varchar(50). 

A1.9 Netting agreement identifier .......... Information not required to be provided. Enter ‘‘exempt ’’ ........................................ Varchar(50). 

A1.10 Netting agreement counterparty 

identifier.

Provide a netting agreement counterparty identifier. Use same identifier as provided in A1.4 if counterparty and netting agreement counterparty are the same. 

Use LEI if netting agreement counterparty has one. Information needed to identify unique netting sets.

Varchar(50). 

A1.11 Trade date ................................... Information not required to be provided. Enter ‘‘2099–12–31’’ ................................. YYYY–MM–DD. 

A1.12 Termination date .......................... Information not required to be provided. Enter ‘‘2099–12–31’’ ................................. YYYY–MM–DD. 

A1.13 Next call, put, or cancellation 

date.

Information not required to be provided. Enter ‘‘2099–12–31’’ ................................. YYYY–MM–DD. 

A1.14 Next payment date ...................... Information not required to be provided. Enter ‘‘2099–12–31’’ ................................. YYYY–MM–DD. 

A1.15 Local currency of position ........... Information not required to be provided. Enter ‘‘USD ’’ ............................................ Char(3). 

A1.16 Current market value of the position in local currency.Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A1.17 Current market value of the position in U.S. dollars.Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A1.18 Asset classification ...................... Information not required to be provided. Enter ‘‘0 ’’ .................................................. Char(1). 

A1.19 Notional or principal amount of 

the position in local currency.

Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A1.20 Notional or principal amount of 

the position In U.S. dollars.

Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A1.21 Covered by third-party credit enhancement agreement (for the benefit 

of the records entity)? 

Information not required to be provided. Enter ‘‘N ’’ ................................................. Char(1). 

A1.21.1 Third-party credit enhancement 

provider identifier (for the benefit of the 

records entity).

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A1.21.2 Third-party credit enhancement 

agreement identifier (for the benefit of 

the records entity).

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A1.21.3 Covered by third-party credit 

enhancement agreement (for the benefit of the counterparty)? 

Information not required to be provided. Enter ‘‘N ’’ ................................................. Char(1). 

A1.21.4 Third-party credit enhancement 

provider identifier (for the benefit of the 

counterparty).

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A1.21.5 Third-party credit enhancement 

agreement identifier (for the benefit of 

the counterparty).

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A1.22 Related position of records entity Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(100). 

A1.23 Reference number for any related loan.Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(500). 

A1.24 Identifier of the lender of the related loan.Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(500). 

TABLE A–2—COUNTERPARTY NETTING SET DATA

Field Instructions and data application Definition 

A2.1 As of date ...................................... Data extraction date .................................................................................................. YYYY–MM–DD. 

A2.2 Records entity identifier ................. Provide the LEI for the records entity ....................................................................... Varchar(50). 

A2.3 Netting agreement counterparty 

identifier.

Provide an identifier for the netting agreement counterparty. Use LEI if 

counterparty has one.

Varchar(50). 

A2.4 Netting agreement identifier .......... Information not required to be provided. Enter ‘‘exempt ’’ ........................................ Varchar(50). 


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65518 Federal Register / Vol. 83, No. 245 / Friday, December 21, 2018 / Rules and Regulations 

TABLE A–2—COUNTERPARTY NETTING SET DATA—Continued 

Field Instructions and data application Definition 

A2.4.1 Underlying QFC obligor identifier Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A2.5 Covered by third-party credit enhancement agreement (for the benefit 

of the records entity)? 

Information not required to be provided. Enter ‘‘N ’’ ................................................. Char(1). 

A2.5.1 Third-party credit enhancement 

provider identifier (for the benefit of the 

records entity).

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A2.5.2 Third-party credit enhancement 

agreement identifier (for the benefit of 

the records entity).

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A2.5.3 Covered by third-party credit enhancement agreement (for the benefit 

of the counterparty)? 

Information not required to be provided. Enter ‘‘N ’’ ................................................. Char(1). 

A2.5.4 Third-party credit enhancement 

provider identifier (for the benefit of the 

counterparty).

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A2.5.5 Third-party credit enhancement 

agreement identifier (for the benefit of 

the counterparty).

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A2.6 Aggregate current market value in 

U.S. dollars of all positions under this 

netting agreement.

Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A2.7 Current market value in U.S. dollars of all positive positions, as aggregated under this netting agreement.Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A2.8 Current market value in U.S. dollars of all negative positions, as aggregated under this netting agreement.Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A2.9 Current market value in U.S. dollars of all collateral posted by records 

entity, as aggregated under this netting 

agreement.

Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A2.10 Current market value in U.S. dollars of all collateral posted by 

counterparty, as aggregated under this 

netting agreement.

Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A2.11 Current market value in U.S. dollar of all collateral posted by records 

entity that is subject to rehypothecation, as aggregated under 

this netting agreement.

Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A2.12 Current market value in U.S. dollars of all collateral posted by 

counterparty that is subject to rehypothecation, as aggregated under 

this netting agreement.

Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A2.13 Records entity collateral—net ..... Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A2.14 Counterparty collateral—net ........ Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A2.15 Next margin payment date .......... Information not required to be provided. Enter ‘‘2099–12–31’’ ................................. YYYY–MM–DD. 

A2.16 Next margin payment amount in 

U.S. dollars.

Information not required to be provided. Enter ‘‘0 ’’ .................................................. Num (25,5). 

A2.17 Safekeeping agent identifier for 

records entity.

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A2.18 Safekeeping agent identifier for 

counterparty.

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

TABLE A–3—LEGAL AGREEMENTS

Field Instructions and data application Definition 

A3.1 As of date ...................................... Data extraction date .................................................................................................. *YYYY–MM–DD. 

A3.2 Records entity identifier ................. Provide LEI for records entity .................................................................................... Varchar(50). 

A3.3 Agreement identifier ...................... Information not required to be provided. Enter ‘‘exempt ’’ ........................................ Varchar(50). 

A3.4 Name of agreement or governing 

document.

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A3.5 Agreement date ............................. Information not required to be provided. Enter ‘‘2099–12–31’’ ................................. YYYY–MM–DD. 

A3.6 Agreement counterparty identifier Use LEI if counterparty has one. Information needed to identify counterparty ........ Varchar(50). 

A3.6.1 Underlying QFC obligor identifier Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A3.7 Agreement governing law .............. Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A3.8 Cross-default provision? ................ Information not required to be provided. Enter ‘‘N’’ .................................................. Char(1). 

A3.9 Identity of cross-default entities ..... Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(500). 


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TABLE A–3—LEGAL AGREEMENTS—Continued 

Field Instructions and data application Definition 

A3.10 Covered by third-party credit enhancement agreement (for the benefit 

of the records entity)?.

Information not required to be provided. Enter ‘‘N ’’ ................................................. Char(1). 

A3.11 Third-party credit enhancement 

provider identifier (for the benefit of the 

records entity).

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A3.12 Associated third-party credit enhancement agreement document identifier (for the benefit of the records entity).Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A3.12.1 Covered by third-party credit 

enhancement agreement (for the benefit of the counterparty)?.

Information not required to be provided. Enter ‘‘N ’’ ................................................. Char(1). 

A3.12.2 Third-party credit enhancement 

provider identifier (for the benefit of the 

counterparty).

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A3.12.3 Associated third-party credit enhancement agreement document identifier (for the benefit of the 

counterparty).

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A3.13 Counterparty contact information: 

name.

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(200). 

A3.14 Counterparty contact information: 

address.

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(100). 

A3.15 Counterparty contact information: 

phone.

Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(50). 

A3.16 Counterparty’s contact information: email address.Information not required to be provided. Enter ‘‘NA’’ ................................................ Varchar(100). 

TABLE A–4—COLLATERAL DETAIL DATA

Field Instructions and data application 

A4.1 As of date ................................................................................................................................. No entry required. 

A4.2 Records entity identifier ............................................................................................................ No entry required. 

A4.3 Collateral posted/collateral received flag .................................................................................. No entry required. 

A4.4 Counterparty identifier .............................................................................................................. No entry required. 

A4.5 Netting agreement identifier ..................................................................................................... No entry required. 

A4.6 Unique collateral item identifier ................................................................................................ No entry required. 

A4.7 Original face amount of collateral item in local currency ......................................................... No entry required. 

A4.8 Local currency of collateral item ............................................................................................... No entry required. 

A4.9 Market value amount of collateral item in U.S. dollars ............................................................ No entry required. 

A4.10 Description of collateral item .................................................................................................. No entry required. 

A4.11 Asset classification ................................................................................................................. No entry required. 

A4.12 Collateral or portfolio segregation status ................................................................................ No entry required. 

A4.13 Collateral location ................................................................................................................... No entry required. 

A4.14 Collateral jurisdiction ............................................................................................................... No entry required. 

A4.15 Is collateral re-hypothecation allowed? .................................................................................. No entry required. 

CORPORATE ORGANIZATION MASTER TABLE 1

Field Example Instructions and data application Definition 

CO.1 As of date .......................... 2015–01–05 ...... Data extraction date ............................................................................. YYYY–MM–DD. 

CO.2 Entity identifier ................... 888888888 ........ Provide unique identifier. Use LEI if available. Information needed to

identify entity.

Varchar(50). 

CO.3 Has LEI been used for entity identifier?.Y/N .................... Specify whether the entity identifier provided is an LEI ....................... Char(1). 

CO.4 Legal name of entity .......... John Doe & Co Provide legal name of entity ................................................................. Varchar(200). 

CO.5 Immediate parent entity 

identifier.

77777777 .......... Use LEI if available. Information needed to complete org structure .... Varchar(50). 

CO.6 Has LEI been used for immediate parent entity identifier?.Y/N .................... Specify whether the immediate parent entity identifier provided is an 

LEI.

Char(1). 

CO.7 Legal name of immediate 

parent entity.

John Doe & Co Information needed to complete org structure ..................................... Varchar(200). 

CO.8 Percentage ownership of 

immediate parent entity in the 

entity.

100.00 ............... Information needed to complete org structure ..................................... Num (5,2). 


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65520 Federal Register / Vol. 83, No. 245 / Friday, December 21, 2018 / Rules and Regulations 

CORPORATE ORGANIZATION MASTER TABLE 1—Continued 

Field Example Instructions and data application Definition 

CO.9 Entity type .......................... Subsidiary, foreign branch, 

foreign division.

Information needed to complete org structure ..................................... Varchar(50). 

CO.10 Domicile ........................... New York, New 

York.

Enter as city, state or city, foreign country ........................................... Varchar(50). 

CO.11 Jurisdiction under which 

incorporated or organized.

New York ........... Enter as state or foreign jurisdiction ..................................................... Varchar(50). 

CO.12 Reporting status .............. REN ................... Indicate one of the following, as appropriate, given status of entity 

under this part. Information needed to validate compliance with the 

requirements of this part: 

REN = Records entity (reporting) Char(3). 

NFC= Non-financial company (not reporting) 

EXC = Excluded entity (not reporting) 

ZER = Records entity with 0 QFCs (not reporting) 

DEM = Records entity de minimis exemption (not reporting) 

OTH = Records entity using another exemption (not reporting) 

1Foreign branches and divisions shall be separately identified to the extent they are identified in an entity’s reports to its PFRAs. 

COUNTERPARTY MASTER TABLE

Field Example Instructions and data application Definition 

CP.1 As of date .......................... 2015–01–05 ...... Data extraction date ............................................................................. YYYY–MM–DD. 

CP.2 Counterparty identifier ....... 888888888 ........ Use LEI if counterparty has one. Should be used consistently across 

all records entities within a corporate group. The counterparty 

identifier shall be the global legal entity identifier if one has been 

issued to the entity. If a counterparty transacts with the records 

entity through one or more separate foreign branches or divisions 

and any such branch or division does not have its own unique 

global legal entity identifier, the records entity must include additional identifiers, as appropriate to enable the FDIC to aggregate 

or disaggregate the data for each counterparty and for each entity 

with the same ultimate parent entity as the counterparty.

Varchar(50). 

CP.3 Has LEI been used for 

counterparty identifier? 

Y/N .................... Indicate whether the counterparty identifier is an LEI .......................... Char(1). 

CP.4 Legal name of counterparty John Doe & Co Information needed to identify and, if necessary, communicate with 

counterparty.

Varchar(200). 

CP.5 Domicile ............................. New York, New 

York.

Enter as city, state or city, foreign country ........................................... Varchar(50). 

CP.6 Jurisdiction under which incorporated or organized.New York ........... Enter as state or foreign jurisdiction ..................................................... Varchar(50). 

CP.7 Immediate parent entity 

identifier.

77777777 .......... Provide an identifier for the parent entity that directly controls the 

counterparty. Use LEI if immediate parent entity has one.

Varchar(50). 

CP.8 Has LEI been used for immediate parent entity identifier? Y/N .................... Indicate whether the immediate parent entity identifier is an LEI ........ Char(1). 

CP.9 Legal name of immediate 

parent entity.

John Doe & Co Information needed to identify and, if necessary, communicate with 

counterparty.

Varchar(200). 

CP.10 Ultimate parent entity 

identifier.

666666666 ........ Provide an identifier for the parent entity that is a member of the corporate group of the counterparty that is not controlled by another 

entity. Information needed to identify counterparty. Use LEI if ultimate parent entity has one.

Varchar(50). 

CP.11 Has LEI been used for ultimate parent entity identifier? Y/N .................... Indicate whether the ultimate parent entity identifier is an LEI ............ Char(1). 

CP.12 Legal name of ultimate 

parent entity.

John Doe & Co Information needed to identify and, if necessary, communicate with 

counterparty.

Varchar(100). 

BOOKING LOCATION MASTER TABLE

Field Instructions and data application Definition 

BL.1 As of date ....................................................................... Data extraction date ................................................................. YYYY–MM–DD. 

BL.2 Records entity identifier .................................................. Provide LEI ............................................................................... Varchar(50). 

BL.3 Internal booking location identifier .................................. Information not required to be provided. Enter ‘‘exempt ’’ ....... Varchar(50). 

BL.4 Unique booking unit or desk identifier ............................ Information not required to be provided. Enter ‘‘exempt ’’ ....... Varchar(50). 

BL.5 Unique booking unit or desk description ........................ Information not required to be provided. Enter ‘‘NA’’ .............. Varchar(50). 

BL.6 Booking unit or desk contact—phone ............................ Information not required to be provided. Enter ‘‘NA’’ .............. Varchar(50). 

BL.7 Booking unit or desk contact—email .............................. Information not required to be provided. Enter ‘‘NA’’ .............. Varchar(100). 


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Federal Register / Vol. 83, No. 245 / Friday, December 21, 2018 / Rules and Regulations 65521 

SAFEKEEPING AGENT MASTER TABLE

Field Instructions and data 

application 

SA.1 As of date ...... No entry required. 

SA.2 Safekeeping 

agent identifier.

No entry required. 

SA.3 Legal name of 

safekeeping agent.

No entry required. 

SA.4 Point of contact—name.No entry required. 

SA.5 Point of contact—address.No entry required. 

SA.6 Point of contact—phone.No entry required. 

SA.7 Point of contact—email.No entry required. 

Dated: December 14, 2018. 

Peter Phelan, 

Deputy Assistant Secretary for Capital 

Markets. 

[FR Doc. 2018–27758 Filed 12–20–18; 8:45 am] 

BILLING CODE 4810–25–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[Docket Number USCG–2013–0705] 

RIN 1625–AA00 

Regulated Navigation Area and Safety 

Zone: Tappan Zee Bridge Construction 

Project, Hudson River; South Nyack 

and Tarrytown, NY 

AGENCY: Coast Guard, DHS. 

ACTION: Temporary interim rule and 

request for comments. 

SUMMARY: The Coast Guard is extending 

the effective period of the temporary 

regulated navigation areas and safety 

zone for the navigable waters of the 

Hudson River, NY, surrounding the 

Tappan Zee Bridge. This rule will 

extend the effective period of the 

existing temporary interim rule for an 

additional year, now ending on 

December 31, 2019. This rule will 

continue to prohibit all persons and 

vessel traffic from the safety zone and 

enforce speed and wake restrictions for 

the Eastern and Western regulated 

navigation areas as cited in this rule 

unless exceptions are authorized by the 

First District Commander or a 

designated representative. These 

regulated navigation areas and safety 

zone continue to be necessary to protect 

personnel, vessels, and the marine 

environment from potential hazards 

during the removal of the existing 

Tappan Zee Bridge and construction of 

a new bridge. 

DATES: The effective period of 

§ 165.T01–0174 is extended to 

December 31, 2019. The amendments in 

this rule are effective from December 31, 

2018, through December 31, 2019. 

Comments and related material must 

be received by the Coast Guard on or 

before April 1, 2019. 

ADDRESSES: To view documents 

mentioned in this preamble as being 

available in the docket, go to http://

www.regulations.gov, type USCG–2013– 

0705 in the ‘‘SEARCH’’ box and click 

‘‘SEARCH.’’ Click on Open Docket 

Folder on the line associated with this 

rule. You may submit comments 

identified by docket number USCG– 

2013–0705 using the Federal 

eRulemaking Portal at http://

www.regulations.gov. See the ‘‘Public 

Participation and Request for 

Comments’’ portion for further 

instructions on submitting comments. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this rule, call or 

email Mr. Craig Lapiejko, Waterways 

Management at Coast Guard First 

District, telephone 617–223–8351, email 

craig.lapiejko@uscg.mil or, Mr. Jeff 

Yunker, Coast Guard Sector New York 

Waterways Management Division, U.S. 

Coast Guard; telephone 718–354–4195, 

email jeff.m.yunker@uscg.mil. 

SUPPLEMENTARY INFORMATION: 

I. Table of Abbreviations 

CFR Code of Federal Regulations 

COTP Captain of the Port 

DHS Department of Homeland Security 

FR Federal Register 

NYSTA New York State Thruway Authority 

RNA Regulated Navigation Area 

NPRM Notice of proposed rulemaking 

TIR Temporary Interim Rule 

§ Section 

U.S.C. United States Code 

II. Background Information and 

Regulatory History 

On September 26, 2013, the Coast 

Guard published a temporary interim 

rule (TIR) establishing a regulated 

navigation area (RNA) on the navigable 

waters of the Hudson River, NY, for the 

Tappan Zee Bridge replacement project 

(78 FR 59231). We received no 

comments on the September 26, 2013, 

TIR. No public meeting was requested, 

and none was held. Construction on the 

Tappan Zee Bridge replacement project 

began on October 1, 2013. 

On July 25, 2014, the Coast Guard 

published a change to the original TIR 

which established a new safety zone 

and expanded the RNA to create both an 

Eastern and Western RNA for the 

Tappan Zee Bridge replacement project 

on navigable waters of the Hudson 

River, NY (79 FR 43250). We received 

two comments on the July 25, 2014, TIR. 

The first comment referenced an 

unrelated rulemaking effort to establish 

anchorage locations along the Hudson 

River. The second comment merely 

provided the environmental checklist 

for the TIR. No public meeting was 

requested, and none was held. 

Today’s TIR extends the effective 

period of the rule for one year until 

December 31, 2019, due to delays of the 

Tappan Zee Bridge replacement project. 

On August 23, 2018, the NYSTA 

requested the RNAs and safety zone be 

extended until December 31, 2019, to 

complete all remaining contract 

operations in and over the Hudson 

River, including, but not limited to steel 

erection, concrete bridge deck 

placements, installation of navigation 

lighting, and removal of the original 

Tappan Zee Bridge. 

The Coast Guard is issuing this 

temporary interim rule without prior 

notice and opportunity to comment 

pursuant to authority under section 4(a) 

of the Administrative Procedure Act 

(APA) (5 U.S.C. 553(b)). This provision 

authorizes an agency to issue a rule 

without prior notice and opportunity to 

comment when the agency for good 

cause finds that those procedures are 

‘‘impracticable, unnecessary, or contrary 

to the public interest.’’ Under 5 U.S.C. 

553(b)(B), the Coast Guard finds that 

good cause exists for not publishing a 

NPRM with respect to this rule because 

doing so would be impracticable and 

contrary to the public interest. The 

notice allowing the construction project 

to proceed and providing updated 

timelines for the project was only 

recently finalized and provided to the 

Coast Guard, which did not give the 

Coast Guard enough time to publish a 

NPRM, take public comments, and issue 

a final rule before the existing regulation 

expires. Timely action is needed to 

respond to the potential safety hazards 

associated with removal of the original 

bridge and construction of a new 

replacement bridge. It would be 

impracticable and contrary to the public 

interest to publish a NPRM because we 

must extend the effective period of the 

safety zone and RNAs as soon as 

possible to protect the safety of the 

waterway users, construction crew, and 

other personnel associated with the 

bridge project. A delay of the project to 

accommodate a full notice and comment 

period would delay necessary 

operations, result in increased costs, 

and delay the completion date of the 

bridge project and subsequent reopening 

of the Hudson River for normal 

operations. 

Under 5 U.S.C. 553(d)(3), the Coast 

Guard finds that good cause exists for 


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