[Federal Register Volume 83, Number 245 (Friday, December 21, 2018)]
[Rules and Regulations]
[Pages 65509-65521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27758]


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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.

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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 Dodd-Frank 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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    \1\ 31 CFR part 148; 81 FR 75624 (Oct. 31, 2016).

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[[Page 65510]]

    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\
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    \2\ 31 CFR 148.3(c)(3).
    \3\ 12 U.S.C. 5390(c)(8), (9), and (10).
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    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\
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    \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).
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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.
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    \7\ TCH has since been succeeded by the Bank Policy Institute.
    \8\ The 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.
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    As discussed more fully in the preamble to the final rule,\9\ the 
FDIC has the authority under Title II of the Dodd-Frank 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.''
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    \9\ See 81 FR at 75624-25.
    \10\ See, 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).
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    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.
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    \13\ The 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'').
    \14\ All 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.
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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\
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    \15\ Such 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).
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    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

[[Page 65511]]

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\
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    \16\ See 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.
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    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.
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    \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.
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    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.
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    \19\ See 12 U.S.C. 5390(a)(9)(E).
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    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.
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    \20\ As 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.
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    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 broker-dealers, 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.
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    \21\ See, e.g., 17 CFR 240.17a-3, 17a-4.
    \22\ See 81 FR at 75648.
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    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

[[Page 65512]]

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.
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    \23\ Overnight 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).
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    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.
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    \24\ See 12 U.S.C. 5390(c)(10)(B)(i).
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    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

[[Page 65513]]

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.
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    \25\ 12 U.S.C. 1851.
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    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\
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    \26\ See Letter from TIAA-CREF (Apr. 7, 2015), p. 6; Letter from 
the Investment Company Institute (Apr. 7, 2015), p. 10.
    \27\ See 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.
    \28\ See 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 Sec.  
148.4 of the rule, other than the records described in Sec.  
148.4(i). See 31 CFR 148.3(c)(1).
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    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.
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    \29\ 81 FR at 75644.
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    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,

[[Page 65514]]

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.
---------------------------------------------------------------------------

    \30\ See 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.
    \31\ See 12 U.S.C. 1851(d)(4)(B)(ii)(II); 12 CFR 
248.12(a)(1)(ii).
    \32\ See 12 U.S.C. 1851(d)(4)(B), (C), 12 CFR 248.12(a)(2).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \33\ As 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).
    \34\ See 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.
    \36\ See 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).
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \37\ As 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).
    \38\ As 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).
---------------------------------------------------------------------------

    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.''
---------------------------------------------------------------------------

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

    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 readily-usable format. In this case, the 
information in the corporate organization master data lookup table is 
linked to information recorded in the

[[Page 65515]]

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.
---------------------------------------------------------------------------

    \40\ See 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.
    \41\ See 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).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \45\ See 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.
    \46\ See 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).
    \48\ See 81 FR at 75630; 12 U.S.C. 5390(a)(1)(E)(ii).
---------------------------------------------------------------------------

    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.

[[Page 65516]]

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
------------------------------------------------------------------------
                                Instructions and
            Field               data application         Definition
------------------------------------------------------------------------
A1.1 As of date.............  Provide data          YYYY-MM-DD.
                               extraction date.
A1.2 Records entity           Provide LEI for       Varchar(50).
 identifier.                   records entity.
                               Information needed
                               to review position-
                               level data by
                               records entity.
A1.3 Position identifier....  Provide a unique      Varchar(100).
                               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.

[[Page 65517]]

 
A1.4 Counterparty identifier  Provide a             Varchar(50).
                               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.
A1.5 Internal booking         Information not       Varchar(50).
 location identifier.          required to be
                               provided. Enter
                               ``exempt ''.
A1.6 Unique booking unit or   Information not       Varchar(50).
 desk identifier.              required to be
                               provided. Enter
                               ``exempt ''.
A1.7 Type of QFC............  Provide type of QFC.  Varchar(100).
                               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.
A1.7.1 Type of QFC covered    Information not       Varchar(500).
 by guarantee or other third   required to be
 party credit enhancement.     provided Enter
                               ``NA''.
A1.7.2 Underlying QFC         Information not       Varchar(50).
 obligor identifier.           required to be
                               provided Enter
                               ``NA''.
A1.8 Agreement identifier...  Information not       Varchar(50).
                               required to be
                               provided. Enter
                               ``exempt ''.
A1.9 Netting agreement        Information not       Varchar(50).
 identifier.                   required to be
                               provided. Enter
                               ``exempt ''.
A1.10 Netting agreement       Provide a netting     Varchar(50).
 counterparty identifier.      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.
A1.11 Trade date............  Information not       YYYY-MM-DD.
                               required to be
                               provided. Enter
                               ``2099-12-31''.
A1.12 Termination date......  Information not       YYYY-MM-DD.
                               required to be
                               provided. Enter
                               ``2099-12-31''.
A1.13 Next call, put, or      Information not       YYYY-MM-DD.
 cancellation date.            required to be
                               provided. Enter
                               ``2099-12-31''.
A1.14 Next payment date.....  Information not       YYYY-MM-DD.
                               required to be
                               provided. Enter
                               ``2099-12-31''.
A1.15 Local currency of       Information not       Char(3).
 position.                     required to be
                               provided. Enter
                               ``USD ''.
A1.16 Current market value    Information not       Num (25,5).
 of the position in local      required to be
 currency.                     provided. Enter ``0
                               ''.
A1.17 Current market value    Information not       Num (25,5).
 of the position in U.S.       required to be
 dollars.                      provided. Enter ``0
                               ''.
A1.18 Asset classification..  Information not       Char(1).
                               required to be
                               provided. Enter ``0
                               ''.
A1.19 Notional or principal   Information not       Num (25,5).
 amount of the position in     required to be
 local currency.               provided. Enter ``0
                               ''.
A1.20 Notional or principal   Information not       Num (25,5).
 amount of the position In     required to be
 U.S. dollars.                 provided. Enter ``0
                               ''.
A1.21 Covered by third-party  Information not       Char(1).
 credit enhancement            required to be
 agreement (for the benefit    provided. Enter ``N
 of the records entity)?       ''.
A1.21.1 Third-party credit    Information not       Varchar(50).
 enhancement provider          required to be
 identifier (for the benefit   provided. Enter
 of the records entity).       ``NA''.
A1.21.2 Third-party credit    Information not       Varchar(50).
 enhancement agreement         required to be
 identifier (for the benefit   provided. Enter
 of the records entity).       ``NA''.
A1.21.3 Covered by third-     Information not       Char(1).
 party credit enhancement      required to be
 agreement (for the benefit    provided. Enter ``N
 of the counterparty)?         ''.
A1.21.4 Third-party credit    Information not       Varchar(50).
 enhancement provider          required to be
 identifier (for the benefit   provided. Enter
 of the counterparty).         ``NA''.
A1.21.5 Third-party credit    Information not       Varchar(50).
 enhancement agreement         required to be
 identifier (for the benefit   provided. Enter
 of the counterparty).         ``NA''.
A1.22 Related position of     Information not       Varchar(100).
 records entity.               required to be
                               provided. Enter
                               ``NA''.
A1.23 Reference number for    Information not       Varchar(500).
 any related loan.             required to be
                               provided. Enter
                               ``NA''.
A1.24 Identifier of the       Information not       Varchar(500).
 lender of the related loan.   required to be
                               provided. Enter
                               ``NA''.
------------------------------------------------------------------------


                Table A-2--Counterparty Netting Set Data
------------------------------------------------------------------------
                                Instructions and
            Field               data application         Definition
------------------------------------------------------------------------
A2.1 As of date.............  Data extraction date  YYYY-MM-DD.
A2.2 Records entity           Provide the LEI for   Varchar(50).
 identifier.                   the records entity.
A2.3 Netting agreement        Provide an            Varchar(50).
 counterparty identifier.      identifier for the
                               netting agreement
                               counterparty. Use
                               LEI if counterparty
                               has one.
A2.4 Netting agreement        Information not       Varchar(50).
 identifier.                   required to be
                               provided. Enter
                               ``exempt ''.

[[Page 65518]]

 
A2.4.1 Underlying QFC         Information not       Varchar(50).
 obligor identifier.           required to be
                               provided. Enter
                               ``NA''.
A2.5 Covered by third-party   Information not       Char(1).
 credit enhancement            required to be
 agreement (for the benefit    provided. Enter ``N
 of the records entity)?       ''.
A2.5.1 Third-party credit     Information not       Varchar(50).
 enhancement provider          required to be
 identifier (for the benefit   provided. Enter
 of the records entity).       ``NA''.
A2.5.2 Third-party credit     Information not       Varchar(50).
 enhancement agreement         required to be
 identifier (for the benefit   provided. Enter
 of the records entity).       ``NA''.
A2.5.3 Covered by third-      Information not       Char(1).
 party credit enhancement      required to be
 agreement (for the benefit    provided. Enter ``N
 of the counterparty)?         ''.
A2.5.4 Third-party credit     Information not       Varchar(50).
 enhancement provider          required to be
 identifier (for the benefit   provided. Enter
 of the counterparty).         ``NA''.
A2.5.5 Third-party credit     Information not       Varchar(50).
 enhancement agreement         required to be
 identifier (for the benefit   provided. Enter
 of the counterparty).         ``NA''.
A2.6 Aggregate current        Information not       Num (25,5).
 market value in U.S.          required to be
 dollars of all positions      provided. Enter ``0
 under this netting            ''.
 agreement.
A2.7 Current market value in  Information not       Num (25,5).
 U.S. dollars of all           required to be
 positive positions, as        provided. Enter ``0
 aggregated under this         ''.
 netting agreement.
A2.8 Current market value in  Information not       Num (25,5).
 U.S. dollars of all           required to be
 negative positions, as        provided. Enter ``0
 aggregated under this         ''.
 netting agreement.
A2.9 Current market value in  Information not       Num (25,5).
 U.S. dollars of all           required to be
 collateral posted by          provided. Enter ``0
 records entity, as            ''.
 aggregated under this
 netting agreement.
A2.10 Current market value    Information not       Num (25,5).
 in U.S. dollars of all        required to be
 collateral posted by          provided. Enter ``0
 counterparty, as aggregated   ''.
 under this netting
 agreement.
A2.11 Current market value    Information not       Num (25,5).
 in U.S. dollar of all         required to be
 collateral posted by          provided. Enter ``0
 records entity that is        ''.
 subject to re-
 hypothecation, as
 aggregated under this
 netting agreement.
A2.12 Current market value    Information not       Num (25,5).
 in U.S. dollars of all        required to be
 collateral posted by          provided. Enter ``0
 counterparty that is          ''.
 subject to re-
 hypothecation, as
 aggregated under this
 netting agreement.
A2.13 Records entity          Information not       Num (25,5).
 collateral--net.              required to be
                               provided. Enter ``0
                               ''.
A2.14 Counterparty            Information not       Num (25,5).
 collateral--net.              required to be
                               provided. Enter ``0
                               ''.
A2.15 Next margin payment     Information not       YYYY-MM-DD.
 date.                         required to be
                               provided. Enter
                               ``2099-12-31''.
A2.16 Next margin payment     Information not       Num (25,5).
 amount in U.S. dollars.       required to be
                               provided. Enter ``0
                               ''.
A2.17 Safekeeping agent       Information not       Varchar(50).
 identifier for records        required to be
 entity.                       provided. Enter
                               ``NA''.
A2.18 Safekeeping agent       Information not       Varchar(50).
 identifier for counterparty.  required to be
                               provided. Enter
                               ``NA''.
------------------------------------------------------------------------


                       Table A-3--Legal Agreements
------------------------------------------------------------------------
                                Instructions and
            Field               data application         Definition
------------------------------------------------------------------------
A3.1 As of date.............  Data extraction date  *YYYY-MM-DD.
A3.2 Records entity           Provide LEI for       Varchar(50).
 identifier.                   records entity.
A3.3 Agreement identifier...  Information not       Varchar(50).
                               required to be
                               provided. Enter
                               ``exempt ''.
A3.4 Name of agreement or     Information not       Varchar(50).
 governing document.           required to be
                               provided. Enter
                               ``NA''.
A3.5 Agreement date.........  Information not       YYYY-MM-DD.
                               required to be
                               provided. Enter
                               ``2099-12-31''.
A3.6 Agreement counterparty   Use LEI if            Varchar(50).
 identifier.                   counterparty has
                               one. Information
                               needed to identify
                               counterparty.
A3.6.1 Underlying QFC         Information not       Varchar(50).
 obligor identifier.           required to be
                               provided. Enter
                               ``NA''.
A3.7 Agreement governing law  Information not       Varchar(50).
                               required to be
                               provided. Enter
                               ``NA''.
A3.8 Cross-default            Information not       Char(1).
 provision?.                   required to be
                               provided. Enter
                               ``N''.
A3.9 Identity of cross-       Information not       Varchar(500).
 default entities.             required to be
                               provided. Enter
                               ``NA''.

[[Page 65519]]

 
A3.10 Covered by third-party  Information not       Char(1).
 credit enhancement            required to be
 agreement (for the benefit    provided. Enter ``N
 of the records entity)?.      ''.
A3.11 Third-party credit      Information not       Varchar(50).
 enhancement provider          required to be
 identifier (for the benefit   provided. Enter
 of the records entity).       ``NA''.
A3.12 Associated third-party  Information not       Varchar(50).
 credit enhancement            required to be
 agreement document            provided. Enter
 identifier (for the benefit   ``NA''.
 of the records entity).
A3.12.1 Covered by third-     Information not       Char(1).
 party credit enhancement      required to be
 agreement (for the benefit    provided. Enter ``N
 of the counterparty)?.        ''.
A3.12.2 Third-party credit    Information not       Varchar(50).
 enhancement provider          required to be
 identifier (for the benefit   provided. Enter
 of the counterparty).         ``NA''.
A3.12.3 Associated third-     Information not       Varchar(50).
 party credit enhancement      required to be
 agreement document            provided. Enter
 identifier (for the benefit   ``NA''.
 of the counterparty).
A3.13 Counterparty contact    Information not       Varchar(200).
 information: name.            required to be
                               provided. Enter
                               ``NA''.
A3.14 Counterparty contact    Information not       Varchar(100).
 information: address.         required to be
                               provided. Enter
                               ``NA''.
A3.15 Counterparty contact    Information not       Varchar(50).
 information: phone.           required to be
                               provided. Enter
                               ``NA''.
A3.16 Counterparty's contact  Information not       Varchar(100).
 information: email address.   required to be
                               provided. Enter
                               ``NA''.
------------------------------------------------------------------------


                                        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   No entry required.
 flag.
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      No entry required.
 item in local currency.
A4.8 Local currency of collateral item.....  No entry required.
A4.9 Market value amount of collateral item  No entry required.
 in U.S. dollars.
A4.10 Description of collateral item.......  No entry required.
A4.11 Asset classification.................  No entry required.
A4.12 Collateral or portfolio segregation    No entry required.
 status.
A4.13 Collateral location..................  No entry required.
A4.14 Collateral jurisdiction..............  No entry required.
A4.15 Is collateral re-hypothecation         No entry required.
 allowed?.
----------------------------------------------------------------------------------------------------------------


                                     Corporate Organization Master Table \1\
----------------------------------------------------------------------------------------------------------------
                                                              Instructions and data
               Field                       Example                 application                 Definition
----------------------------------------------------------------------------------------------------------------
CO.1 As of date...................  2015-01-05...........  Data extraction date......  YYYY-MM-DD.
CO.2 Entity identifier............  888888888............  Provide unique identifier.  Varchar(50).
                                                            Use LEI if available.
                                                            Information needed to
                                                            identify entity.
CO.3 Has LEI been used for entity   Y/N..................  Specify whether the entity  Char(1).
 identifier?.                                               identifier provided is an
                                                            LEI.
CO.4 Legal name of entity.........  John Doe & Co........  Provide legal name of       Varchar(200).
                                                            entity.
CO.5 Immediate parent entity        77777777.............  Use LEI if available.       Varchar(50).
 identifier.                                                Information needed to
                                                            complete org structure.
CO.6 Has LEI been used for          Y/N..................  Specify whether the         Char(1).
 immediate parent entity                                    immediate parent entity
 identifier?.                                               identifier provided is an
                                                            LEI.
CO.7 Legal name of immediate        John Doe & Co........  Information needed to       Varchar(200).
 parent entity.                                             complete org structure.
CO.8 Percentage ownership of        100.00...............  Information needed to       Num (5,2).
 immediate parent entity in the                             complete org structure.
 entity.

[[Page 65520]]

 
CO.9 Entity type..................  Subsidiary, foreign    Information needed to       Varchar(50).
                                     branch, foreign        complete org structure.
                                     division.
CO.10 Domicile....................  New York, New York...  Enter as city, state or     Varchar(50).
                                                            city, foreign country.
CO.11 Jurisdiction under which      New York.............  Enter as state or foreign   Varchar(50).
 incorporated or organized.                                 jurisdiction.
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     Char(3).
                                                               (reporting).
                                                              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).
----------------------------------------------------------------------------------------------------------------
\1\ Foreign branches and divisions shall be separately identified to the extent they are identified in an
  entity's reports to its PFRAs.


                                            Counterparty Master Table
----------------------------------------------------------------------------------------------------------------
                                                              Instructions and data
               Field                       Example                 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     Varchar(50).
                                                            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.
CP.3 Has LEI been used for          Y/N..................  Indicate whether the        Char(1).
 counterparty identifier?                                   counterparty identifier
                                                            is an LEI.
CP.4 Legal name of counterparty...  John Doe & Co........  Information needed to       Varchar(200).
                                                            identify and, if
                                                            necessary, communicate
                                                            with counterparty.
CP.5 Domicile.....................  New York, New York...  Enter as city, state or     Varchar(50).
                                                            city, foreign country.
CP.6 Jurisdiction under which       New York.............  Enter as state or foreign   Varchar(50).
 incorporated or organized.                                 jurisdiction.
CP.7 Immediate parent entity        77777777.............  Provide an identifier for   Varchar(50).
 identifier.                                                the parent entity that
                                                            directly controls the
                                                            counterparty. Use LEI if
                                                            immediate parent entity
                                                            has one.
CP.8 Has LEI been used for          Y/N..................  Indicate whether the        Char(1).
 immediate parent entity                                    immediate parent entity
 identifier?                                                identifier is an LEI.
CP.9 Legal name of immediate        John Doe & Co........  Information needed to       Varchar(200).
 parent entity.                                             identify and, if
                                                            necessary, communicate
                                                            with counterparty.
CP.10 Ultimate parent entity        666666666............  Provide an identifier for   Varchar(50).
 identifier.                                                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.
CP.11 Has LEI been used for         Y/N..................  Indicate whether the        Char(1).
 ultimate parent entity                                     ultimate parent entity
 identifier?                                                identifier is an LEI.
CP.12 Legal name of ultimate        John Doe & Co........  Information needed to       Varchar(100).
 parent entity.                                             identify and, if
                                                            necessary, communicate
                                                            with counterparty.
----------------------------------------------------------------------------------------------------------------


                      Booking Location Master Table
------------------------------------------------------------------------
                                Instructions and
            Field               data application         Definition
------------------------------------------------------------------------
BL.1 As of date.............  Data extraction date  YYYY-MM-DD.
BL.2 Records entity           Provide LEI.........  Varchar(50).
 identifier.
BL.3 Internal booking         Information not       Varchar(50).
 location identifier.          required to be
                               provided. Enter
                               ``exempt ''.
BL.4 Unique booking unit or   Information not       Varchar(50).
 desk identifier.              required to be
                               provided. Enter
                               ``exempt ''.
BL.5 Unique booking unit or   Information not       Varchar(50).
 desk description.             required to be
                               provided. Enter
                               ``NA''.
BL.6 Booking unit or desk     Information not       Varchar(50).
 contact--phone.               required to be
                               provided. Enter
                               ``NA''.
BL.7 Booking unit or desk     Information not       Varchar(100).
 contact--email.               required to be
                               provided. Enter
                               ``NA''.
------------------------------------------------------------------------


[[Page 65521]]


                     Safekeeping Agent Master Table
------------------------------------------------------------------------
                                                Instructions and data
                   Field                             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