Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / Notices 64641 

actions in a non-U.S. jurisdiction were not 

taken, delayed, or forgone, as relevant. 

IX. Public Section 

SPOE & MPOE 

The purpose of the public section is to 

inform the public’s understanding of the 

firm’s resolution strategy and how it works. 

The public section should discuss the steps 

that the firm is taking to improve 

resolvability under the U.S. Bankruptcy 

Code. The public section should provide 

background information on each material 

entity and should be enhanced by including 

the firm’s rationale for designating material 

entities. The public section should also 

discuss, at a high level, the firm’s intra-group 

financial and operational interconnectedness 

(including the types of guarantees or support 

obligations in place that could impact the 

execution of the firm’s strategy). 

The discussion of strategy in the public 

section should broadly explain how the firm 

has addressed any deficiencies, 

shortcomings, and other key vulnerabilities 

that the agencies have identified in prior plan 

submissions. For each material entity, it 

should be clear how the strategy provides for 

continuity, transfer, or orderly wind-down of 

the entity and its operations. There should 

also be a description of the resulting 

organization upon completion of the 

resolution process. 

The public section may note that the Plan 

is not binding on a bankruptcy court or other 

resolution authority and that the proposed 

failure scenario and associated assumptions 

are hypothetical and do not necessarily 

reflect an event or events to which the firm 

is or may become subject. 

By order of the Board of Governors of the 

Federal Reserve System. 

Ann E. Misback, 

Secretary of the Board. 

Federal Deposit Insurance Corporation. 

By order of the Board of Directors. 

Dated at Washington, DC, on August 29, 

2023. 

James P. Sheesley, 

Assistant Executive Secretary. 

[FR Doc. 2023–19267 Filed 9–18–23; 8:45 am] 

BILLING CODE 6210–01–6714–01–P 

FEDERAL RESERVE SYSTEM 

[Docket No. OP–1817] 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

RIN 3064–ZA38 

Guidance for Resolution Plan 

Submissions of Foreign Triennial Full 

Filers 

AGENCY: Board of Governors of the 

Federal Reserve System (Board) and 

Federal Deposit Insurance Corporation 

(FDIC). 

ACTION: Proposed guidance; request for 

comments. 

SUMMARY: The Board and the FDIC 

(together, the agencies) are inviting 

comments on proposed guidance for the 

2024 and subsequent resolution plan 

submissions by certain foreign banking 

organizations. The proposed guidance is 

meant to assist these firms in 

developing their resolution plans, 

which are required to be submitted 

pursuant to the Dodd-Frank Wall Street 

Reform and Consumer Protection Act, as 

amended (the Dodd-Frank Act), and the 

jointly issued implementing regulation 

(the Rule). The scope of application of 

the proposed guidance would be 

foreign-based triennial full filers 

(specified firms or firms), which are 

foreign-based Category II and III banking 

organizations, and the guidance, if 

finalized, would supersede the joint 

Guidance for Resolution Plan 

Submissions of Certain Foreign-Based 

Covered Companies (85 FR 83557 (Dec. 

22, 2020) (2020 FBO Guidance)). The 

proposed guidance is based on the 

agencies’ review of the specified firms’ 

2021 and prior resolution plan 

submissions, as well as the agencies’ 

experiences dealing with stress events 

in the international and domestic 

banking systems, and would describe 

the agencies’ expectations regarding 

several aspects of the specified firms’ 

plans for an orderly resolution under 

the U.S. Bankruptcy Code. The agencies 

invite public comment on all aspects of 

the proposed guidance. 

DATES: Comments must be received by 

November 30, 2023. 

ADDRESSES: Interested parties are 

encouraged to submit written comments 

jointly to both agencies. Comments 

should be directed to: 

Board: You may submit comments, 

identified by Docket No. OP–1817, by 

any of the following methods: 

• Agency Website: http://

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Email: regs.comments@

federalreserve.gov. Include docket 

number in the subject line of the 

message. 

• Fax: (202) 452–3819 or (202) 452– 

3102. 

• Mail: Ann E. Misback, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue NW, Washington, 

DC 20551. 

In general, all public comments will 

be made available on the Board’s 

website at www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm as 

submitted, and will not be modified to 

remove confidential, contact or any 

identifiable information. Public 

comments may also be viewed 

electronically or in paper in Room M– 

4365A, 2001 C St. NW, Washington, DC 

20551, between 9:00 a.m. and 5:00 p.m. 

during federal business weekdays. 

FDIC: You may submit comments, 

identified by RIN 3064–ZA38, by any of 

the following methods: 

• FDIC Website: https://

www.fdic.gov/resources/regulations/ 

federal-register-publications/. Follow 

the instructions for submitting 

comments on the FDIC’s website. 

• Email: comments@fdic.gov. Include 

‘‘RIN 3064–ZA38’’ on the subject line of 

the message. 

• Mail: James P. Sheesley, Assistant 

Executive Secretary, Attention: 

Comments—RIN 3064–ZA38, Federal 

Deposit Insurance Corporation, 550 17th 

Street NW, Washington, DC 20429. 

• Hand Delivery/Courier: Comments 

may be hand delivered to the guard 

station at the rear of the 550 17th Street 

NW building (located on F Street NW) 

on business days between 7 a.m. and 5 

p.m. 

Public Inspection: Comments 

received, including any personal 

information provided, may be posted 

without change to https://www.fdic.gov/ 

resources/regulations/federal-registerpublications/. Commenters should 

submit only information that the 

commenter wishes to make available 

publicly. The FDIC may review, redact, 

or refrain from posting all or any portion 

of any comment that it may deem to be 

inappropriate for publication, such as 

irrelevant or obscene material. The FDIC 

may post only a single representative 

example of identical or substantially 

identical comments, and in such cases 

will generally identify the number of 

identical or substantially identical 

comments represented by the posted 

example. All comments that have been 

redacted, as well as those that have not 

been posted, that contain comments on 

the merits of this document will be 

retained in the public comment file and 

will be considered as required under all 

applicable laws. All comments may be 

accessible under the Freedom of 

Information Act. 

FOR FURTHER INFORMATION CONTACT: 

Board: Catherine Tilford, Deputy 

Associate Director, (202) 452–5240, 

Elizabeth MacDonald, Assistant 

Director, (202) 475–6316, Tudor Rus, 

Lead Financial Institution Analyst, (202) 

475–6359, Division of Supervision and 

Regulation; or Jay Schwarz, Assistant 

General Counsel, (202) 452–2970; 

Andrew Hartlage, Special Counsel, (202) 

452–6483; Sarah Podrygula, Senior 

Attorney, (202) 912–4658; or Brian 


ddrumheller on DSK120RN23PROD with NOTICES2
64642 Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / Notices 

1 12 U.S.C. 5365(d). 

2 12 CFR parts 243 and 381. 

3 12 CFR 243.4 and 12 CFR 381.4. The terms 

‘‘covered company’’ and ‘‘triennial full filer’’ have 

the meanings given in the Rule, as do other, similar 

terms used throughout this proposal. 

4 12 CFR 243.4(b) and 12 CFR 381.4(b). 

5 12 CFR 243.5 and 12 CFR 381.5. 

6 12 CFR 243.6(b) and 12 CFR 381.6(b). 

7 12 CFR 243.11(c) and 12 CFR 381.11(c). 

8The public sections of resolution plans 

submitted to the agencies are available at 

www.federalreserve.gov/supervisionreg/resolutionplans.htm and www.fdic.gov/regulations/reform/ 

resplans/. 

9 Guidance for § 165(d) Resolution Plan 

Submissions by Domestic Covered Companies 

applicable to the Eight Largest, Complex U.S. 

Banking Organizations, 84 FR 1438 (Feb. 4, 2019) 

(2019 GSIB Guidance). 

10 Guidance for Resolution Plan Submissions of 

Certain Foreign-Based Covered Companies, 85 FR 

83557 (Dec. 22, 2020) (2020 FBO Guidance). 

11https://www.federalreserve.gov/newsevents/ 

pressreleases/bcreg20220930a.htm. 

12For example, the FDIC—upon the 

recommendation of two-thirds of each of the board 

of directors of the FDIC and the Board, as well as 

a determination by the Secretary of the Treasury, in 

consultation with the President—resolved SVB and 

SB using the systemic risk exception to the 

statutory requirement to employ the least-costly 

method to resolve a failed IDI. https://

www.federalreserve.gov/newsevents/pressreleases/ 

monetary20230312b.htm; https://www.fdic.gov/ 

news/press-releases/2023/pr23017.html. 

Kesten, Senior Attorney, (202) 843– 

4079, Legal Division, Board of 

Governors of the Federal Reserve 

System, 20th Street and Constitution 

Avenue NW, Washington, DC 20551. 

For users of TTY–TRS, please call 711 

from any telephone, anywhere in the 

United States. 

FDIC: Robert C. Connors, Senior 

Advisor, (202) 898–3834, Division of 

Complex Financial Institution 

Supervision and Resolution; Celia Van 

Gorder, Senior Counsel, (202) 898–6749; 

Esther Rabin, Counsel, (202) 898–6860, 

erabin@fdic.gov, Legal Division. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

II. Overview of the Proposed Guidance 

III. Paperwork Reduction Act 

Appendix: Text of the Proposed Guidance 

I. Background 

A. The Dodd-Frank Act and the Rule 

Section 165(d) of the Dodd-Frank 

Act 1 and the Rule 2 require certain 

financial institutions to report 

periodically to the Board and the FDIC 

their plans for rapid and orderly 

resolution under the U.S. Bankruptcy 

Code (the Bankruptcy Code) in the event 

of material financial distress or failure. 

The Rule divides covered companies 

into three groups of filers: (a) biennial 

filers; (b) triennial full filers; and (c) 

triennial reduced filers.3

Triennial full filers under the Rule are 

required to file a resolution plan every 

three years, alternating between full and 

targeted resolution plans.4 The Rule 

requires each covered company’s full 

resolution plan to include, among other 

things, a strategic analysis of the plan’s 

components, a description of the range 

of specific actions the covered company 

proposes to take in resolution, and a 

description of the covered company’s 

organizational structure, material 

entities, and interconnections and 

interdependencies.5 Targeted resolution 

plans are required to include a subset of 

information contained in a full plan.6 In 

addition, the Rule requires that all 

resolution plans consist of two parts: a 

confidential section that contains any 

confidential supervisory and proprietary 

information submitted to the agencies 

and a section that the agencies make 

available to the public.7 Public sections 

of resolution plans can be found on the 

agencies’ websites.8

B. Recent Developments 

Implementation of the Rule has been 

an iterative process aimed at 

strengthening the resolution planning 

capabilities of financial institutions 

subject to the Rule. To assist the 

development of covered companies’ 

resolution planning capabilities and 

plan submissions, the agencies have 

provided feedback on individual plan 

submissions, promulgated guidance to 

certain groups of covered companies, 

and issued answers to frequently asked 

questions. The agencies believe that 

guidance can help focus the efforts of 

similarly situated covered companies to 

improve their resolution capabilities 

and clarify the agencies’ expectations 

for those filers’ future progress. The 

agencies have issued guidance to (a) 

U.S. global systemically important 

banks (GSIBs),9 which constitute the 

biennial filer group, and (b) certain large 

foreign banking organizations (FBOs) 

that are triennial full filers.10 The 

agencies have not, however, issued 

guidance to the domestic firms and 

additional FBOs that make up the 

remainder of the triennial full filers. 

As the agencies previously 

indicated,11 they believe that it is now 

appropriate to issue guidance to the 

specified firms. The agencies’ review of 

the 2021 targeted resolution plans 

submitted by foreign-based triennial full 

filers not already subject to resolution 

planning guidance revealed significant 

inconsistencies in the amount and 

nature of information they provided on 

critical informational elements required 

by the Rule. In addition, some 

resolution plans included optimistic 

assumptions regarding the availability 

of financial resources at the firm at the 

time of a bankruptcy filing as well as the 

ability of a firm to access financial 

assistance prior to and during 

resolution. The agencies believe that 

future resolution plans from these firms 

would benefit from guidance regarding 

critical informational elements required 

by the Rule as well as appropriate 

assumptions. In addition, the agencies’ 

review of 2021 targeted resolution plans 

submitted by foreign-based triennial full 

filers subject to the 2020 FBO Guidance 

revealed opportunities for 

improvements to the reliability and 

timeliness of the generation and 

provision of financial information as 

well as liquidity- and capital-related 

resolution capabilities necessary to 

successfully executing these firms’ U.S. 

resolution strategies. Resolution plans 

from the specified firms also generally 

lacked detail and clarity on how the 

firm’s strategy and capabilities for a 

resolution under the Rule would be 

complementary to its home country 

global resolution strategy. 

The proposed guidance also reflects 

the agencies’ recent experience with 

UBS Group AG’s acquisition of Credit 

Suisse Group AG (CS) and, with respect 

to specified firms with large subsidiary 

insured depository institutions (IDIs), 

the resolutions of Silicon Valley Bank 

(SVB), Signature Bank (SB), and First 

Republic Bank (First Republic). The 

agencies’ experience with CS illustrates 

the complexities that can arise in the 

case of acute stress involving large 

cross-border firms and the importance 

of resolution planning and coordination 

with home country authorities. Like CS, 

many of the specified firms are foreign 

GSIBs with a large presence in the 

United States, and the agencies 

recognize the importance of maintaining 

a comprehensive understanding of the 

U.S. operations of large FBOs. While 

SVB, SB, and First Republic were not 

required to file resolution plans under 

section 165(d) of the Dodd-Frank Act 

and the Rule, the effects of their failures 

illustrate that the failure of a large IDI 

may have serious adverse effects on 

financial stability in the United States.12

The agencies’ experience with these 

three banking organizations is 

particularly instructive in developing 

guidance to foreign-based triennial full 

filers that present a U.S. multiple point 

of entry (U.S. MPOE) resolution strategy 

and that have large subsidiary IDIs, to 

assist their progress in developing their 

resolution plans that comply with the 


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Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / Notices 64643 

13 12 CFR 243.5(a)(2) and 12 CFR 381.5(a)(2). 

14 12 CFR 252.153. 

15This proposed rulemaking is published 

elsewhere in this Federal Register (LTD proposal). 

16The public also may provide comments on the 

proposed guidance that assume that no long-term 

debt rule is finalized and that specified firms 

remain subject to current capital rules. 

17 Guidance for Resolution Plan Submissions of 

Certain Foreign-Based Covered Companies, 85 FR 

15449 (March 18, 2020) (2020 Proposed FBO 

Guidance). 

statutory and regulatory requirements 

governing IDI resolution. 

C. Resolution Plan Strategy 

The specified firms have adopted one 

of two U.S. resolution strategies: a U.S. 

single point of entry (U.S. SPOE) or U.S. 

MPOE strategy. Under a U.S. SPOE 

approach, only the top-tier U.S. material 

entity holding company enters 

bankruptcy and all U.S. material entity 

subsidiaries remain operating as a going 

concern. The U.S. MPOE approach 

entails multiple U.S. material entities 

entering separate resolution 

proceedings: any top-tier U.S. material 

entity holding company enters 

bankruptcy; any U.S. material entity IDI 

subsidiary is resolved separately under 

the Federal Deposit Insurance Act of 

1950, as amended (the FDI Act); and 

other individual U.S. material entity 

subsidiaries separately enter bankruptcy 

(or another applicable resolution 

regime) or are wound down. The U.S. 

SPOE and U.S. MPOE resolution plan 

strategies require firms to consider 

different risks and require different 

types of planning and development of 

capabilities for the execution of the 

respective strategies. For their 2021 

resolution plan submissions, some of 

the specified firms presented a U.S. 

SPOE strategy, but most of the specified 

firms presented a U.S. MPOE strategy. 

The agencies do not prescribe a 

specific resolution strategy for any 

covered company, nor do the agencies 

identify a preferred strategy. The 

proposed guidance is not intended to 

favor one strategy or another. Specified 

filers may continue to submit resolution 

plans using the resolution strategies 

they believe would be most effective in 

achieving an orderly resolution of their 

firms, but a resolution plan must 

address the key vulnerabilities and 

support the underlying assumptions 

required to successfully execute the 

chosen resolution strategy. 

With respect to the specified firms, 

the Rule requires the firm’s U.S. 

resolution plan to address subsidiaries, 

branches, and agencies, and identified 

critical operations and core business 

lines, as applicable, that are domiciled 

in the United States or conducted in 

whole or material part in the United 

States.13 To date, the resolution plans of 

specified filers that have presented a 

U.S. SPOE strategy have presumed entry 

of the top tier U.S. intermediate holding 

company (IHC) into bankruptcy, while 

its material entity subsidiaries remain 

open and operating. Each of the 

specified firms that has presented such 

an approach is required by the Board’s 

Regulation YY to have a U.S. IHC under 

which all non-branch U.S. entities are 

organized.14 The agencies note that 

some of the specified firms are not 

subject to the Regulation YY 

requirement to establish a U.S. IHC. The 

agencies are considering whether such a 

specified firm not subject to a U.S. IHC 

requirement could provide for the 

orderly resolution of its U.S. entities 

and operations utilizing a U.S. SPOE 

resolution without having a top-tier 

holding company which would be the 

only entity to enter resolution. 

Question 1: The agencies invite 

comment on all aspects of the 

utilization of a U.S. SPOE strategy 

under section 165(d) of the Dodd-Frank 

Act by a specified filer whether or not 

it is subject to the Regulation YY 

requirement to establish a U.S. IHC, 

including the feasibility of the U.S. 

SPOE strategy and the characteristics of 

the firm’s U.S. entities and operations 

that would facilitate successful U.S. 

SPOE strategy execution. 

D. Long-Term Debt Rulemaking 

The agencies, as well as the Office of 

the Comptroller of the Currency, are 

issuing a proposed rule for comment 

that would require certain large IDI 

holding companies, U.S. intermediate 

holding companies of FBOs, and certain 

IDIs, to issue and maintain outstanding 

a minimum amount of long-term debt 

(LTD), among other proposed 

requirements.15 This proposed rule 

would improve the resolvability of these 

firms, and, in particular, their IDI 

subsidiaries, in case of failure, reducing 

costs to the Deposit Insurance Fund 

(DIF) and mitigating financial stability 

and contagion risks by reducing the risk 

of loss to uninsured depositors. LTD 

issued by the IDI could help support 

resolution strategies by, among other 

things, recapitalizing a bridge 

depository institution and facilitating its 

exit from resolution as a newly 

chartered IDI that would have new 

ownership. The agencies expect that a 

final long-term debt rule could interact 

with how the specified firms plan for 

resolution under the Rule, and the 

agencies anticipate ensuring that the 

final resolution plan guidance for 

foreign triennial full filers is consistent 

with any final long-term debt rule. 

Accordingly, the agencies welcome 

comments that take the proposed longterm debt rulemaking into 

consideration.16

II. Overview of the Proposed Guidance 

The proposed guidance begins with 

the proposed scope and then is 

organized into several substantive 

topical areas. Each substantive topic is 

bifurcated, with separate guidance for a 

U.S. SPOE resolution strategy and a U.S. 

MPOE resolution strategy. As discussed, 

each resolution strategy poses distinct 

risks and requires its own type of 

planning and capabilities development 

for executing the strategy. Accordingly, 

the proposed guidance would account 

for the different challenges posed by 

each approach. 

The proposed guidance for firms that 

adopt a U.S. SPOE resolution strategy is 

generally based on the 2020 FBO 

Guidance or the associated proposal.17

Successful execution of a U.S. SPOE 

strategy relies on the ability to provide 

sufficient capital and liquidity to 

material entities, a governance structure 

that can identify the onset of financial 

stress events, and the ability to ensure 

the timely execution of the strategy and 

to maintain continuity of operations 

throughout resolution. 

Some aspects of this proposal reflect 

expectations that were included in the 

2020 Proposed FBO Guidance. For 

example, the proposal contains capital 

and liquidity pre-positioning 

expectations similar to the 2020 

Proposed FBO Guidance, to better 

support U.S. SPOE strategies and in 

light of the LTD proposal. Although IDI 

subsidiaries of certain specified firms 

may be required under an LTD rule to 

have outstanding a minimum amount of 

prepositioned LTD, firms with a U.S. 

SPOE strategy should have a framework 

for determining the amount and 

allocation of resources among the firm’s 

material entities. Similarly, for specified 

firms that adopt a U.S. SPOE strategy, 

the agencies are proposing governance 

mechanisms and separability 

expectations similar to those contained 

in the 2020 Proposed FBO Guidance. 

Governance mechanisms increase the 

likelihood that the U.S. SPOE strategy 

would be implemented at a point in the 

stress continuum prior to the firm 

having exhausted all financial 

resources, increasing the likelihood that 

the bankruptcy reorganization would be 

successful. Separability provides 

additional optionality to firms’ U.S. 

SPOE strategies. 

The proposed guidance for firms that 

utilize a U.S. MPOE resolution strategy 


ddrumheller on DSK120RN23PROD with NOTICES2
64644 Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / Notices 

is based upon the 2020 FBO Guidance 

but tailored for a U.S. MPOE strategy. 

The agencies are, however, proposing to 

clarify their expectations for specified 

firms that utilize a U.S. MPOE strategy 

that includes the resolution of a material 

entity that is a U.S. IDI. As discussed 

elsewhere in this proposal, the 

resolution of a large U.S. IDI under the 

FDI Act likely would pose substantial 

operational and legal challenges and 

complexities. Accordingly, the agencies 

believe that the resolution plans of firms 

whose resolution plans contemplate the 

separate resolution of a material entity 

that is a U.S. IDI would benefit from 

developing capabilities specific to and 

considering legal requirements 

regarding U.S. IDI resolution. 

The agencies believe that each 

substantive area of the proposed 

guidance would play a part in helping 

to ensure that the specified firms can be 

resolved in an orderly manner. The 

proposed guidance would describe the 

agencies’ expectations for each of these 

areas. In addition, the proposed 

guidance would consolidate items of 

feedback provided to a number of the 

specified firms in the past, thereby 

providing the public with one source of 

applicable guidance for the specified 

firms. The proposed guidance is not, 

however, intended to override the 

obligation of an individual specified 

firm to respond, in its next resolution 

plan submission, to pending items of 

individual feedback or any 

shortcomings or deficiencies identified 

or determined by the agencies in that 

specified firm’s prior resolution plan 

submission. The proposed guidance also 

is not meant to limit specified firms’ 

consideration of additional 

vulnerabilities or obstacles that might 

arise based on a firm’s particular 

structure, operations, or resolution 

strategy, and that should be factored 

into the specified firm’s resolution plan 

submission. 

The proposed guidance concludes 

with information about the format and 

structure of a plan that applies equally 

to plans contemplating either a U.S. 

SPOE strategy or a U.S. MPOE strategy. 

A. Scope of Application 

The agencies propose to apply the 

guidance to all foreign-based triennial 

full filers. The Board’s tailoring 

framework provides clear, predictable 

scoping based on publicly reported 

quantitative data. As discussed above, 

the agencies believe that it is 

appropriate to provide resolution 

planning guidance to all foreign 

triennial full filers given issues 

identified in these firms’ 2021 targeted 

resolution plans and considering 

lessons learned from recent events, 

including the agencies’ experiences in 

connection with the events leading to 

UBS AG’s acquisition of Credit Suisse, 

following the intervention of the Swiss 

authorities. 

The agencies would like the specified 

firms to submit resolution plans that 

take into consideration the final version 

of the proposed guidance as soon as 

practicable. However, the agencies 

understand that the specified firms may 

need time to take into consideration the 

guidance when developing their 

resolution plans. In light of the timing 

of this proposal, the agencies are 

considering providing a short extension 

of the next resolution plan submission 

date for the specified firms, with the 

expectation that these plan submissions 

would be due sooner than one year after 

the proposed guidance is published in 

final form. 

The agencies seek comment on all 

aspects of the proposed scope of 

application. 

Question 2: Should the agencies 

provide more than 6 months for the 

specified firms to take into 

consideration the expectations in the 

proposed guidance, once finalized? If 

so, what time period should the 

agencies provide? 

B. Group Resolution Plan 

The agencies recognize that the 

preferred resolution outcome for many 

specified firms is a successful home 

country resolution using a global SPOE 

resolution strategy that does not involve 

the placement of any U.S. material 

entities into resolution. However, by 

law, U.S. resolution planning 

requirements require relevant FBOs to 

contemplate their resolution under the 

Bankruptcy Code. 

U.S. operations of an FBO are often 

highly interconnected with the broader, 

global operations of the financial 

institution. To clarify the interaction 

between U.S. and global resolution 

strategies, the proposal outlines 

expectations for specified firms to 

describe the impact of executing the 

firm’s global, group-wide resolution 

plan on the firm’s U.S. operations and 

detail the extent to which resolution 

planning under the Rule relies on 

different assumptions, strategies, and 

capabilities from the global plan. A 

specified firm’s broader resolvability 

framework is expected to consider the 

objectives of both the group-wide 

resolution strategy and the U.S. 

resolution strategy pursuant to the Rule, 

with complementary efforts to enhance 

resolvability across plans. 

C. Capital 

For specified firms with a U.S. SPOE 

resolution strategy, the agencies propose 

guidance substantially similar to the 

2020 Proposed FBO Guidance regarding 

capital. The ability to provide sufficient 

capital to material entities without 

disruption from creditors is important 

in order to ensure that material entities 

can continue to maintain operations as 

the firm is resolved. The proposal 

describes expectations concerning the 

appropriate positioning of capital and 

other loss-absorbing instruments (e.g., 

debt that a parent holding company may 

choose to forgive or convert to equity) 

among the material entities within the 

firm (resolution capital adequacy and 

positioning, or RCAP). The positioning 

of capital resources within the firm 

should be consistent with any 

applicable rules requiring prepositioned 

resources in IDIs in the form of longterm debt. The proposal also describes 

expectations regarding a methodology 

for periodically estimating the amount 

of capital that may be needed to support 

each material entity after the bankruptcy 

filing (resolution capital execution need, 

or RCEN). 

The agencies are not proposing 

further expectations concerning capital 

to firms whose plans contemplate a U.S. 

MPOE resolution strategy, as a U.S. 

MPOE strategy assumes most material 

entities do not continue as going 

concerns upon entry into resolution. 

Question 3: In addition to the capitalrelated resolution plan requirements 

under the Rule, are there other capitalrelated expectations that would 

reasonably enhance the resolvability of 

a specified firm that utilizes a U.S. 

MPOE strategy in its resolution plan? 

Question 4: Do the capital-related 

resolution expectations in the proposed 

guidance align with the provisions of 

the interagency long-term debt 

rulemaking proposal? Are there any 

aspects of the proposed guidance that 

should be revised, or additional 

expectations added, in light of the 

interagency long-term debt rulemaking 

proposal? 

D. Liquidity 

For firms that adopt a U.S. SPOE 

resolution strategy, the agencies propose 

guidance substantially similar to the 

2020 Proposed FBO Guidance regarding 

liquidity. A firm’s ability to reliably 

estimate and meet its liquidity needs 

prior to, and in, resolution is important 

to the execution of a firm’s resolution 

strategy because it enables the firm to 

respond quickly to demands from 

stakeholders and counterparties, 

including regulatory authorities in other 


ddrumheller on DSK120RN23PROD with NOTICES2
Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / Notices 64645 

18SR letter 14–1, ‘‘Principles and Practices for 

Recovery and Resolution Preparedness’’ (Jan. 24, 

2014), available at https://www.federalreserve.gov/ 

supervisionreg/srletters/sr1401.htm. 

jurisdictions and financial market 

utilities. Maintaining sufficient and 

appropriately positioned liquidity also 

allows the subsidiaries to continue to 

operate while the firm is being resolved 

in accordance with the firm’s resolution 

strategy. 

For firms that adopt a U.S. MPOE 

resolution strategy, the agencies propose 

that a firm should have the liquidity 

capabilities necessary to execute its 

resolution strategy, and its plan should 

include analysis and projections of a 

range of liquidity needs during 

resolution. 

Question 5: In addition to the 

liquidity-related resolution plan 

requirements under the Rule and the 

liquidity-related expectations in the 

proposed guidance, are there other 

liquidity related expectations that 

would reasonably enhance the 

resolvability of a specified firm that 

utilizes a U.S. MPOE resolution 

strategy? Are there circumstances under 

which it would be appropriate for a 

resolution plan that utilizes a U.S. 

MPOE strategy to include the movement 

of liquidity among U.S. material entities 

that are in resolution? 

E. Governance Mechanisms 

For firms using a U.S. SPOE 

resolution strategy, the agencies propose 

guidance that is substantially similar to 

the 2020 Proposed FBO Guidance 

regarding governance mechanisms. An 

adequate governance structure with 

triggers that identify the onset, 

continuation, and increase of financial 

stress is important to ensure that there 

is sufficient time to communicate and 

coordinate with the foreign parent 

regarding the provision of financial 

support and other key actions. The 

governance mechanisms section 

proposes expectations that firms have 

playbooks that describe the board and 

senior management actions of the U.S. 

non-branch material entities that would 

be necessary in order to execute the 

firm’s U.S. resolution strategy. In 

addition, the proposal describes 

expectations that these firms have 

triggers that are linked to specific 

actions outlined in these playbooks to 

ensure the timely escalation of 

information to both U.S. IHC and 

foreign parent governing bodies. The 

proposal also describes the expectations 

that firms identify and analyze potential 

legal challenges to planned U.S. IHC 

support mechanisms, and any defenses 

and mitigants to such challenges. To the 

extent the preferred global resolution 

strategy for the firm is a home country 

SPOE resolution, the governance 

mechanisms section proposes 

expectations that a firm design such 

mechanisms in a way that does not 

interfere with the execution of the 

global strategy. 

For firms that adopt a U.S. MPOE 

resolution strategy, the agencies propose 

adopting governance mechanisms 

expectations to ensure communication 

and coordination between the governing 

body of the U.S. operations and the 

foreign parent for the purpose of 

facilitating preparations for an orderly 

resolution. 

Question 6: Are the governance 

mechanisms expectations regarding 

communications and triggers for firms 

that utilize a U.S. MPOE strategy 

appropriate and clear? Are there other 

governance-related expectations that 

should be extended to resolution plans 

utilizing a U.S. MPOE resolution 

strategy? 

F. Operational 

The development and maintenance of 

operational capabilities is important to 

support and enable execution of a firm’s 

resolution strategy, including providing 

for the continuation of identified critical 

operations and preventing or mitigating 

adverse effects on U.S. financial 

stability. For firms that utilize a U.S. 

SPOE resolution strategy, the agencies 

propose adopting portions of the 

operational expectations of the 2020 

FBO Guidance and SR letter 14–1,18

with modifications that reflect the 

specific characteristics and complexities 

of the specified firms. Like the 2020 

FBO Guidance, the proposal contains 

expectations on payment, clearing and 

settlement activities, managing, 

identifying and valuing collateral, and 

shared and outsourced services. For 

firms that utilize a U.S. MPOE 

resolution strategy, the agencies propose 

adopting expectations based on SR letter 

14–1 and the 2020 FBO Guidance that 

are most relevant to an MPOE resolution 

strategy. For example, the proposed 

expectations regarding payment, 

clearing and settlement activities are 

those most likely to support resolution 

in the MPOE context. 

Question 7: Does the proposed 

guidance sufficiently address FBOs that 

plan to utilize a U.S. SPOE strategy that 

may not be required to comply with U.S. 

qualified financial contract resolution 

stay regulations? How should FBOs that 

are not ‘‘regulated entities’’ under 

ISDA’s Resolution Stay Protocol 

demonstrate that their SPOE resolution 

strategies will be feasible despite the 

lack of a stay on cross defaults to the 

parent company? What guidance should 

the agencies provide with respect to how 

the SPOE strategy of such a firm should 

address the potential effects of early 

termination of the firm’s qualified 

financial contracts? 

G. Legal Entity Rationalization & 

Separability 

For specified firms that utilize a U.S. 

SPOE resolution strategy, the agencies 

propose substantively adopting the 2020 

FBO Guidance regarding legal entity 

rationalization and guidance that is 

substantially similar to the 2020 FBO 

Proposed Guidance regarding 

separability. It is important that firms 

maintain a structure that facilitates 

orderly resolution. To achieve this, the 

proposal states that a firm should 

develop and describe in their plans 

criteria supporting the U.S. resolution 

strategy and integrate them into day-today decision making processes. The 

criteria would be expected to consider 

the best alignment of legal entities and 

business lines and facilitate 

resolvability of U.S. operations as a 

firm’s activities, technology, business 

models, or geographic footprint change 

over time. In addition, the proposed 

guidance provides that the firm should 

identify discrete U.S. operations that 

could be sold or transferred in 

resolution to provide meaningful 

optionality for the resolution strategy 

under a range of potential failure 

scenarios and include this information 

in their plans. 

For firms that utilize a U.S. MPOE 

resolution strategy, the proposed 

guidance would clarify that the firms 

should have legal entity structures that 

support their U.S. resolution strategy 

and describe those structures in their 

plans. The proposal also provides that 

to the extent a material entity IDI relies 

upon other affiliates during resolution, 

the firm should discuss its rationale for 

the legal entity structure and associated 

resolution risks and potential mitigants. 

In addition, the agencies propose that 

the firms include options for the sale, 

transfer, or disposal of significant assets, 

portfolios, legal entities, or business 

lines in resolution. 

Question 8: Are there other 

separability related expectations that 

would reasonably enhance resolution 

plans that utilize a U.S. MPOE 

resolution strategy? 


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19The FDIC has a separate rule requiring 

resolution plans from certain IDIs, 12 CFR 360.10, 

‘‘Resolution Plans Required for Insured Depository 

Institutions With $50 Billion or More in Total 

Assets’’ (the IDI Rule). The Rule and the IDI Rule 

each have different goals and the expected content 

of the respective resolution plans accordingly also 

is different. The Rule requires a covered company 

to submit a resolution plan that would allow rapid 

and orderly resolution of the covered company 

under the Bankruptcy Code in the event of material 

financial distress or failure. The purpose of the IDI 

Rule is to ensure that the FDIC has access to all of 

the material information it needs to efficiently 

resolve an IDI in the event of its failure. 

20See 12 U.S.C. 1823(c)(4). A deposit payout and 

liquidation of the failed IDI’s assets (payout 

liquidation) is the general baseline the FDIC uses in 

a least-cost requirement determination. See 12 

U.S.C. 1823(c)(4)(D). 

21See 12 U.S.C. 1823(c)(4)(G). 

22See generally https://www.fdic.gov/resources/ 

resolutions/bank-failures/ for background about the 

resolution of IDIs by the FDIC. 

23See Remarks by Chairman Martin J. Gruenberg 

on ‘‘Oversight of Prudential Regulators’’ before the 

Committee on Financial Services, United States 

House of Representatives available at https://

www.fdic.gov/news/speeches/2023/ 

spmay1523.html; see also Remarks by Chairman 

Martin J. Gruenberg on ‘‘Recent Bank Failures and 

the Federal Regulatory Response’’ before the 

Committee on Banking, Housing, and Urban Affairs, 

United States Senate available at https://

www.fdic.gov/news/speeches/2023/ 

spmar2723.html. 

24To protect depositors and preserve the value of 

the assets and operations of each of SVB and SB 

following failure—which can improve recoveries 

for creditors and the DIF—the FDIC ultimately 

transferred all the deposits and substantially all of 

the assets of each failed bank to a full-service bridge 

depository institution (BDI) operated by the FDIC 

while the FDIC marketed the institutions to 

potential bidders. 

25Before a BDI may be chartered, the chartering 

conditions set forth in 12 U.S.C. 1821(n)(2) must 

also be satisfied. For purposes of this guidance, if 

the Plan provides appropriate analysis concerning 

the feasibility of the BDI strategy, there is no 

expectation that the resolution plan also 

demonstrate separately that the conditions for 

chartering the BDI have been satisfied. 

H. Insured Depository Institution (IDI) 

Resolution 19

Background. When an IDI fails and 

the FDIC is appointed receiver, the FDIC 

generally must utilize the resolution 

option for the failed IDI that is least 

costly to the DIF of all possible methods 

(the least-cost requirement).20 An 

exception to this requirement is 

provided where a determination is made 

by the Secretary of the Treasury, in 

consultation with the President and 

after a written recommendation from 

two-thirds of the FDIC’s Board of 

Directors and two-thirds of the Board, 

that complying with the least-cost 

requirement would have serious adverse 

effects on economic conditions or 

financial stability and implementing 

another resolution option would avoid 

or mitigate such adverse effects.21 A 

specified firm should not assume the 

use of this systemic risk exception to the 

least-cost requirement in its resolution 

plan. 

Purchase and Assumption 

Transaction. The FDIC typically seeks 

to resolve a failed IDI by identifying, 

before the IDI’s failure, one or more 

potential acquirers so that as many of 

the IDI’s assets and deposit liabilities as 

possible can be sold to and assumed by 

the acquirer(s) instead of remaining in 

the receivership created on the failure 

date.22 This transaction form, termed a 

‘‘purchase and assumption’’ or ‘‘P&A’’ 

transaction, has historically been the 

resolution approach that is least costly 

to the DIF, easiest for the FDIC to 

execute, and least disruptive to the 

depositors of the failed IDI—particularly 

in the case of transactions involving the 

assumption of all the failed IDI’s 

deposits by the assuming institution (an 

‘‘all-deposit transaction’’)—and 

typically can be completed over the 

weekend following the IDI’s closure by 

its primary regulator but before business 

ordinarily would commence the 

following Monday (closing weekend). 

The limited size and operational 

complexity present in most small-bank 

failures has allowed the FDIC to execute 

a P&A transaction with a single acquirer 

on numerous occasions. Resolving an 

IDI via a P&A transaction over the 

closing weekend, however, may not be 

available to the FDIC, particularly in 

failures involving large IDIs. P&A 

transactions require lead time to 

identify potential buyers and allow due 

diligence on, and an auction of, the 

failing IDI’s assets and banking 

business, also termed its ‘‘franchise.’’ 

Additionally, larger banks can pose 

significant, and potentially systemic, 

challenges in resolutions. These 

challenges include: a more limited pool 

of potential acquirers as a failed IDI 

increases in size, which makes a 

transaction in which nearly all assets 

and liabilities are transferred to one or 

more acquirers increasingly less likely; 

operational complexities which require 

advance planning on the part of the IDI 

and the FDIC and the development of 

certain capabilities; potential market 

concentration and antitrust 

considerations; and potentially the need 

to maintain the continuity of activities 

conducted in whole or in part in the IDI 

that are critical to U.S. financial 

stability. 

For example, the largest failed IDI in 

U.S. history, Washington Mutual Bank, 

had approximately $307 billion in 

assets. The DIF did not incur a loss 

associated with this failure in part 

because it benefitted from the FDIC’s 

sale of the institution to an acquirer 

which had first engaged in exhaustive 

due diligence of the institution during a 

self-marketing effort conducted by the 

IDI prior to its failure. A more recent 

example, that of First Republic Bank, 

which was also acquired in an alldeposit transaction, illustrates that such 

a transaction can be difficult to 

effectuate. The FDIC invited 21 banks 

and 21 nonbanks to participate in the 

bidding process and received bids from 

only 4 bidders.23 The least costly bid 

necessitated a loss-sharing agreement, 

and the transaction is expected to result 

in a significant loss to the DIF. In 

addition, the FDIC received only one 

viable bid for Silicon Valley Bank 

during the weekend following its 

failure, but this bid did not satisfy the 

least-cost test. The FDIC received no 

viable all-deposit bids for Signature 

Bank at the time it failed.24

If no P&A transaction that meets the 

least-cost requirement can be 

accomplished at the time an IDI fails, 

the FDIC must pursue an alternative 

resolution strategy. The primary 

alternative resolution strategies for a 

failed IDI are: (1) a payout liquidation; 

or (2) utilization of a BDI. The FDIC 

conducts payout liquidations by paying 

insured deposits in cash or transferring 

the insured deposits to an existing 

institution or a new institution 

organized by the FDIC to assume the 

insured deposits (generally, a Deposit 

Insurance National Bank or DINB). In 

payout liquidations, the FDIC as 

receiver retains substantially all of the 

failed IDI’s assets for later sale, and the 

franchise value of the failed IDI is lost. 

Bridge Depository Institution. If the 

FDIC determines that temporarily 

continuing the operations of the failed 

IDI is less costly than a payout 

liquidation, it may organize a BDI to 

purchase certain assets and assume 

certain liabilities of the failed IDI.25

Generally, a BDI would continue the 

failed bank’s operations according to 

business plans and budgets approved by 

the FDIC and carried out by FDICselected leadership of the BDI. In 

addition to providing depositors access 

to deposits and banking services, the 

BDI would conduct any necessary 

restructuring required to rationalize the 

failed IDI’s operations and maximize 

value to be achieved in an eventual sale. 

Subject to the least-cost requirement, 

the initial structure of the BDI may be 

based upon an all-deposit transaction, a 

transaction in which the BDI assumes 

only the insured deposits, or a 

transaction in which the BDI assumes 

all insured deposits and a portion of the 

uninsured deposits. Once a BDI is 

established, the FDIC seeks to stabilize 

the institution while simultaneously 

planning for the eventual termination of 


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26 12 U.S.C. 1821(n)(10). 

the BDI. In exiting and terminating a 

BDI, the FDIC may merge or consolidate 

the BDI with another depository 

institution, issue and sell a majority of 

the capital stock in the BDI, or effect the 

assumption of the deposits or 

acquisition of the assets of the BDI.26

However, many of the same factors that 

challenge the feasibility of a traditional 

P&A transaction also complicate 

planning for the termination of a BDI 

through a sale of the whole entity or its 

constituent parts. 

The proposed guidance would clarify 

the expectations for a firm adopting a 

U.S. MPOE resolution strategy with a 

material entity IDI to demonstrate how 

the IDI can be resolved in a manner that 

is consistent with the overall objective 

of the Plan to substantially mitigate the 

risk that the failure of the specified firm 

would have serious adverse effects on 

financial stability in the United States, 

while also adhering to the requirements 

of the FDI Act regarding failed bank 

resolutions without relying on the 

assumption that a systemic risk 

exception will be available. These 

expectations would not be applicable to 

firms adopting a U.S. SPOE resolution 

strategy because U.S. IDI subsidiaries of 

such firms would not be expected to 

enter resolution. 

Question 9: Should the guidance 

indicate that if a specified filer proposes 

a strategy using a BDI to resolve its 

subsidiary material entity IDI, the plan 

should include a detailed description of 

the balance sheet components that 

would transfer to the BDI and of the 

process the specified filer believes is 

most appropriate to value the 

transferred components, inclusive of pro 

forma balance sheet and income 

statements? 

Question 10: Should the guidance 

indicate that if a specified filer proposes 

a strategy using a BDI to resolve its 

subsidiary material entity IDI, the plan 

should describe and quantify: 

• The amounts to be realized through 

liquidating the failed IDI’s assets and 

any expected premiums associated with 

selling the institution’s deposits; 

• Any franchise value bid premiums 

expected to be realized through 

maintaining certain ongoing business 

operations in a BDI; and 

• A comparison of the loss to the DIF 

realized from a payout liquidation and 

from utilizing a BDI so as to support the 

conclusion that a BDI would result in 

the least costly resolution? 

I. Derivatives and Trading Activities 

The agencies request comment on 

whether to provide guidance on 

derivatives and trading activities for 

specified firms that utilize a U.S. SPOE 

resolution strategy. Although most of 

the specified firms have limited 

derivatives and trading operations 

compared to the U.S. GSIBs, it remains 

important that their derivatives and 

trading activities can be stabilized and 

de-risked during resolution without 

causing significant disruption to U.S. 

markets, particularly for firms with large 

U.S. broker-dealers. The agencies also 

are considering the resolution 

challenges that may be posed by 

transactions that originate from and may 

be managed in the U.S. but are booked 

outside of the U.S. If the agencies were 

to provide guidance on derivatives and 

trading activities, the agencies likely 

would adopt aspects of the 2020 

Proposed FBO Guidance. The agencies 

do not anticipate providing derivatives 

and trading activities guidance to 

specified firms that utilize a U.S. MPOE 

resolution strategy. 

Question 11: Should the agencies 

provide resolution plan guidance on 

derivatives and trading activities for 

specified firms that utilize a U.S. SPOE 

resolution strategy? If so, what should 

be the content of that guidance, what 

methodology should the agencies use to 

determine the scope of specified firms to 

be subject to that guidance, and would 

it be appropriate to adopt all or some of 

the expectations contained in the 2020 

Proposed FBO Guidance? What other 

derivatives and trading activities-related 

expectations would reasonably enhance 

resolution plans that utilize a U.S. SPOE 

resolution strategy? 

Question 12: Should the agencies 

provide resolution plan guidance on 

derivatives and trading activities for 

specified firms that utilize a U.S. MPOE 

resolution strategy? If so, what should 

be the content of that guidance and 

what methodology should the agencies 

use to determine the scope of specified 

firms to be subject to that guidance? 

Question 13: Should any resolution 

plan guidance the agencies provide to 

the specified firms on derivatives and 

trading activities take a different 

approach to transactions that originate 

in the U.S. but are booked outside of the 

U.S. and transactions that originate and 

are booked in the U.S.? 

J. Branches 

U.S. branches of FBOs can play a 

critical role in a firm’s U.S. operations 

and may present unique issues in a 

resolution of a specified firm’s U.S. 

entities and operations. The agencies 

propose guidance that is similar to the 

2020 FBO Guidance regarding branches. 

Under the proposal, specified firms 

would be expected to show how 

branches would continue to facilitate 

the firm’s FMU access for identified 

critical operations and to meet funding 

needs. The proposal also outlines 

expectations that the specified firms 

analyze the effects on the firm’s FMU 

access and identified critical operations 

of the cessation of operations of any 

U.S. branch that is a material entity. 

K. Format and Structure of Plans; 

Assumptions 

This section states the agencies’ 

preferred presentation regarding the 

format, assumptions, and structure of 

resolution plans. Plans should contain 

an executive summary, a narrative of the 

firm’s resolution strategy, relevant 

technical appendices, and a public 

section as detailed in the Rule. The 

proposed format, structure, and 

assumptions are generally similar to 

those in the 2020 FBO Guidance, except 

that the proposed guidance reflects the 

expectation that a firm should support 

any assumptions that it will have access 

to the Discount Window and/or other 

borrowings during the period 

immediately prior to entering 

bankruptcy and clarifies expectations 

around such assumptions and that firms 

should not assume the use of the 

systemic risk exception to the least-cost 

test in the event of a failure of an IDI 

requiring resolution under the FDI Act. 

In addition, for firms that adopt a U.S. 

MPOE resolution strategy, the proposal 

includes the expectation that a plan 

should demonstrate and describe how 

the failure event(s) results in material 

financial distress of its U.S. operations, 

including consideration of the 

likelihood of the diminution the firm’s 

liquidity and capital levels prior to 

bankruptcy. 

Question 14: Certain firms’ plans rely 

on lending facilities, including the 

Discount Window or other governmentsponsored facilities in the period 

immediately preceding a bankruptcy 

filing. Should the guidance include 

additional clarifications related to 

assumptions regarding these lending 

facilities? Should the guidance contain 

clarifications relating to other 

assumptions discussed in the guidance 

or additional appropriate assumptions? 


ddrumheller on DSK120RN23PROD with NOTICES2
64648 Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / Notices 

Question 15: The agencies included in 

the 2019 GSIB Guidance and 2020 FBO 

Guidance answers that had been 

previously published to frequently asked 

questions (FAQs) the agencies received 

from the guidance recipients about the 

topics in resolution plan guidance (e.g., 

capital, liquidity, etc.); however, there 

was no FAQ process for the specified 

firms given the limited number of 

common questions received. Should the 

agencies include in resolution guidance 

for the specified firms answers to FAQs 

similar to those contained in the 2019 

GSIB Guidance and 2020 FBO 

Guidance? If so, which answers to FAQs 

should the final guidance contain, and 

what changes, if any, should the 

agencies make to the answers to FAQs 

in the 2019 GSIB Guidance and 2020 

FBO Guidance? 

III. Paperwork Reduction Act 

Certain provisions of the proposed 

guidance contain ‘‘collections of 

information’’ within the meaning of the 

Paperwork Reduction Act of 1995 (PRA) 

(44 U.S.C. 3501–3521). In accordance 

with the requirements of the PRA, the 

agencies may not conduct or sponsor, 

and a respondent is not required to 

respond to, an information collection 

unless it displays a currently valid 

Office of Management and Budget 

(OMB) control number. The agencies 

reviewed the proposed guidance and 

determined that it would revise the 

reporting revisions that have been 

previously approved by OMB under the 

Board’s OMB control number 7100– 

0346 (Reporting Requirements 

Associated with Regulation QQ; FR QQ) 

and the FDIC’s control number 3064– 

0210 (Reporting Requirements Associate 

with Resolution Planning). The Board 

has reviewed the proposed guidance 

under the authority delegated to the 

Board by OMB. 

Comments are invited on the 

following: 

(A) Whether the collections of 

information are necessary for the proper 

performance of the agencies’ functions, 

including whether the information has 

practical utility; 

(B) The accuracy of the agencies’ 

estimates of the burden of the 

information collections, including the 

validity of the methodology and 

assumptions used; 

(C) Ways to enhance the quality, 

utility, and clarity of the information to 

be collected; 

(D) Ways to minimize the burden of 

the information collections on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology; 

and 

(E) Estimates of capital or start-up 

costs and costs of operation, 

maintenance, and purchase of services 

to provide information. 

Comments on aspects of this 

document that may affect reporting, 

recordkeeping, or disclosure 

requirements and burden estimates 

should be sent to the addresses listed in 

the ADDRESSES section of the 

Supplementary Information. A copy of 

the comments may also be submitted to 

the OMB desk officer for the Agencies: 

By mail to U.S. Office of Management 

and Budget, 725 17th Street NW, 

#10235, Washington, DC 20503, or by 

facsimile to (202) 395–5806, Attention, 

Federal Banking Agency Desk Officer. 

Proposed Revisions, With Extension, of 

the Following Information Collections 

Board 

Collection title: Reporting 

Requirements Associated with 

Regulation QQ. 

Collection identifier: FR QQ. 

OMB control number: 7100–0346. 

Frequency: Triennial, Biennial, and 

on occasion. 

Respondents: Bank holding 

companies (including any foreign bank 

or company that is, or is treated as, a 

bank holding company under section 

8(a) of the International Banking Act of 

1978 and meets the relevant total 

consolidated assets threshold) with total 

consolidated assets of $250 billion or 

more, bank holding companies with 

$100 billion or more in total 

consolidated assets with certain 

characteristics, and nonbank financial 

firms designated by the Financial 

Stability Oversight Council for 

supervision by the Board. 

FDIC 

Collection title: Reporting 

Requirements Associated with 

Resolution Planning. 

OMB control number: 3064–0210. 

Current Actions: The proposed 

guidance would apply to all triennial 

full filers, but expectations would differ 

based on whether a firm adopts an 

SPOE or an MPOE resolution strategy 

and whether it is foreign or domestic. 

The proposed guidance is intended to 

clarify the agencies’ expectations 

concerning the resolution plans 

required pursuant to the Rule. The 

document does not have the force and 

effect of law. Rather, it describes the 

agencies’ expectations and priorities 

regarding these the resolution plans of 

triennial full filers and the agencies’ 

general views regarding specific areas 

where additional detail should be 

provided and where certain capabilities 

or optionality should be developed and 

maintained to demonstrate that each 

firm has considered fully, and is able to 

mitigate, obstacles to the successful 

implementation of its preferred 

resolution strategy. 

The proposed guidance for triennial 

full filers using an SPOE strategy is 

based on the 2019 GSIB guidance (for 

domestic firms) and the 2020 FBO 

guidance (for foreign firms). It would 

clarify the agencies’ expectations 

around capital, liquidity, governance 

mechanisms, and operations. The 

proposed guidance also would clarify 

expectations concerning management 

information systems capabilities and the 

identification of discrete separability 

options appropriate to the resolution 

strategy. Additionally, if finalized, the 

FBOs that adopt an SPOE resolution 

strategy should address how their U.S. 

resolution plan aligns with their group 

resolution plan. 

The proposed guidance for triennial 

full filers using an MPOE resolution 

strategy addresses similar topics but 

reflects the risks of and capabilities 

needed for an MPOE resolution. The 

proposed guidance explains the 

agencies’ expectations around liquidity 

and operational capabilities, and legal 

entity rationalization. The proposed 

guidance also provides clarified 

expectations related to the separate 

resolution of a U.S. IDI and to 

identification of discrete separability 

options. FBOs that adopt an MPOE 

resolution strategy would have 

expectations related to governance 

mechanisms; the role of branches; and 

the group resolution plan. 

The proposed guidance does not 

specify expectations around derivatives 

and trading activities. 

Historically, the Board and the FDIC 

have split the respondents for purposes 

of PRA clearances. As such, the agencies 

will split the change in burden as well. 

As a result of this split and the proposed 

revisions, there is a proposed net 

increase in the overall estimated burden 

hours of 13,386 hours for the Board and 

17,610 hours for the FDIC. Therefore, 

the total Board estimated burden for its 

entire information collection would be 

216,853 hours and the total FDIC 

estimate burden for its entire 

information collection would be 

211,300 hours. 

The following table presents only the 

change in the estimated burden hours, 

as amended if the guidance were 

finalized, broken out by agency. The 

table does not include a discussion of 

the remaining estimated burden hours, 


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27 In addition to the proposed revisions to the 

estimations for Triennial Full filings, the agencies 

have revised the estimation for Biennial Full filings 

from 40,115 hours per response to 39,550 hours per 

response to align the burden estimation 

methodology with what was used for Triennial Full 

filings under the proposed guidance. Specifically, 

the agencies removed a component for a biennial 

full filer’s analysis of its critical operations as part 

of its submission of targeted and full resolution 

plans, because this critical operations analysis is 

integrated in the preparation of such plans. 

1Resolution Plans Required, 76 FR 67323 

(November 1, 2011). 

2Resolution Plans Required, 84 FR 59194 

(November 1, 2019). The amendments became 

effective December 31, 2019. ‘‘Rule’’ means the joint 

rule as amended in 2019. Terms not defined herein 

have the meanings set forth in the Rule. 

3Prudential Standards for Large Bank Holding 

Companies, Savings and Loan Holding Companies, 

and Foreign Banking Organizations, 84 FR 59032 

(Nov. 1, 2019). 

4 85 FR 83557 (Dec. 22, 2020) (2020 FBO 

Guidance). 

which remain unchanged.27 As shown 

in the table, the Triennial Full filing 

types would be estimated more 

granularly according to SPOE and 

MPOE resolution strategies. 

TABLE 1—BURDEN HOUR ESTIMATES UNDER CURRENT REGULATIONS AND UNDER THE PROPOSED GUIDANCE

FR QQ 

Estimated 

number of 

respondents 

Estimated 

annual 

frequency 

Estimated 

average 

hours per 

response 

Estimated 

annual 

burden hours 

Board Burdens 

Current 

Triennial Full: 

Complex Foreign ............................................................................... 1 1 9,777 9,777 

Foreign and Domestic ....................................................................... 7 1 4,667 32,669 

Current Total .............................................................................. ........................ ........................ ........................ 42,446 

Proposed 

Triennial Full: 

FBO SPOE * ...................................................................................... 2 1 11,848 23,696 

FBO MPOE ....................................................................................... 3 1 5,939 17,817 

Domestic MPOE ................................................................................ 3 ........................ 5,513 16,539 

Proposed Total ........................................................................... ........................ ........................ ........................ 58,052 

FDIC Burdens 

Current 

Triennial Full: 

Complex Foreign ............................................................................... 0 1 9,777 0 

Foreign and Domestic ....................................................................... 7 1 4,667 32,669 

Current Total .............................................................................. ........................ ........................ ........................ 32,669 

Proposed 

Triennial Full: 

FBO SPOE * ...................................................................................... 2 1 11,848 23,696 

FBO MPOE ....................................................................................... 3 1 5,939 17,817 

Domestic MPOE ................................................................................ 2 1 5,513 11,026 

Proposed Total ........................................................................... ........................ ........................ ........................ 52,539 

* There are currently no domestic triennial full filers utilizing a SPOE strategy. Estimated hours per response for a domestic SPOE triennial full 

filer would be 11,235 hours. 

Appendix: Text of the Proposed 

Guidance 

Guidance for Resolution Plan 

Submissions of Foreign Triennial Full 

Filers 

I. Introduction 

Section 165(d) of the Dodd-Frank Wall 

Street Reform and Consumer Protection Act 

(12 U.S.C. 5365(d)) requires certain financial 

companies to report periodically to the Board 

of Governors of the Federal Reserve System 

(the Board) and the Federal Deposit 

Insurance Corporation (the FDIC) (together, 

the agencies) their plans for rapid and 

orderly resolution in the event of material 

financial distress or failure. On November 1, 

2011, the agencies promulgated a joint rule 

implementing the provisions of Section 

165(d).1 Subsequently, in November 2019, 

the agencies finalized amendments to the 

joint rule addressing amendments to the 

Dodd-Frank Act made by the Economic 

Growth, Regulatory Relief, and Consumer 

Protection Act and improving certain aspects 

of the joint rule based on the agencies’ 

experience implementing the joint rule since 

its adoption.2 Financial companies meeting 

criteria set out in the Rule must file a 

resolution plan (Plan) according to the 

schedule specified in the Rule. 

This document is intended to provide 

guidance to certain foreign financial 

companies required to submit Plans 

regarding development of their respective 

U.S. strategies to assist their further 

development of a Plan for their 2024 and 

subsequent Plan submissions. Specifically, 

the guidance applies to any foreign-based 

covered company that is subject to Category 

II or III standards according to their 

combined U.S. operations in accordance with 

the Board’s tailoring rule (specified firms).3

This guidance supersedes the joint Guidance 

for Resolution Plan Submissions of Certain 

Foreign-Based Covered Companies.4

The Plan for a specified firm would 

address a scenario where its U.S. operations 

experience material financial distress and the 

foreign parent is unable or unwilling to 

provide sufficient financial support for the 

continuation of U.S. operations, and at least 

the top tier U.S. IHC files for bankruptcy 

under Title 11, United States Code. Under 

such a scenario, the Plan should provide for 

the orderly resolution of the specified firm’s 

U.S. material entities and operations. 

In general, this document is organized 

around a number of key challenges in 

resolution (interaction with group resolution 

plan; capital; liquidity; governance 

mechanisms; operational; branches; legal 


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5The agencies recognize that the preferred 

resolution outcome for many specified firms is a 

successful home country resolution using a global 

SPOE resolution strategy where U.S. material 

entities are provided with sufficient capital and 

liquidity resources to allow them to stay out of 

resolution proceedings and maintain continuity of 

operations throughout the parent’s resolution. 

However, because support from the foreign parent 

in stress cannot be ensured, the Rule provides that 

the U.S. resolution plan for specified firms should 

specifically address a scenario where the U.S. 

operations experience material financial distress, 

and the Plan should not assume that the specified 

firm takes resolution actions outside the United 

States that would eliminate the need for any U.S. 

subsidiaries to enter resolution proceedings. 

6The terms ‘‘material entities,’’ ‘‘identified 

critical operations,’’ and ‘‘core business lines’’ have 

the same meaning as in the Rule. The term ‘‘U.S. 

material entity’’ means any subsidiary, branch, or 

agency that is a material entity and is domiciled in 

the United States. The term ‘‘U.S. non-branch 

material entity’’ means a material entity organized 

or incorporated in the U.S. including, in all cases, 

the U.S. IHC. The term ‘‘U.S. IHC subsidiaries’’ 

means all U.S. non-branch material entities other 

than the U.S. IHC. 

7Total Loss-Absorbing Capacity, Long-Term Debt, 

and Clean Holding Company Requirements for 

Systemically Important U.S. Bank Holding 

Companies and Intermediate Holding Companies of 

Systemically Important Foreign Banking 

Organizations, 82 FR 8266 (January 24, 2017); LTD 

proposal. 

8The resolution period begins immediately after 

the U.S. IHC bankruptcy filing and extends through 

the completion of the U.S. resolution strategy. 

9 12 CFR 252.156(g)(3). 

10 12 CFR 252.156(g)(2). 

entity rationalization and separability; and 

insured depository institution resolution, if 

applicable) that apply across resolution 

plans, depending on their strategy. 

Additional challenges or obstacles may arise 

based on a firm’s particular structure, 

operations, or resolution strategy. Each firm 

is expected to satisfactorily address these 

vulnerabilities in its Plan. In addition, each 

topic of this guidance is separated into 

expectations for a specified firm that utilizes 

a U.S. single point of entry (U.S. SPOE) 

resolution strategy for its Plan and 

expectations for a specified firm that utilizes 

a U.S. multiple point of entry (U.S. MPOE) 

resolution strategy for its Plan.5 Under the 

Rule, the agencies will review a Plan to 

determine if it satisfactorily addresses key 

potential challenges, including those 

specified below. If the agencies jointly decide 

that an aspect of a Plan presents a weakness 

that individually or in conjunction with 

other aspects could undermine the feasibility 

of the Plan, the agencies may determine 

jointly that the Plan is not credible or would 

not facilitate an orderly resolution under the 

U.S. Bankruptcy Code. 

II. Interaction With Group Resolution Plan 

U.S. SPOE & U.S. MPOE 

Recognizing that the preferred resolution 

outcome for the specified firms is often a 

successful SPOE home country resolution, a 

specified firm’s Plan should describe the 

impact of executing the global resolution 

plan on U.S. operations. This description 

should include a discussion of the expected 

resolution strategy for the firm’s U.S. entities 

and operations under the global resolution 

plan. In addition, a specified firm’s 

resolvability work in the United States 

should consider both the objectives of the 

firm’s group-wide resolution strategy and the 

Rule. Efforts to enhance the resolvability of 

U.S. operations and entities should be as 

complementary as practicable to the groupwide resolution strategy, while complying 

with the Rule. To the extent that the Plan 

relies on different assumptions, strategies, 

and capabilities, such as those used to project 

liquidity needs in resolution, from those 

necessary to execute the global strategy, the 

Plan should include a description of such 

differences. 

III. Capital 

U.S. SPOE 

The firm should have the capital 

capabilities necessary to execute its U.S. 

resolution strategy, including the modeling 

and estimation process described below. 

Resolution Capital Adequacy and Positioning 

(RCAP). In order to help ensure that a firm’s 

U.S. non-branch material entities 6 could be 

resolved in an orderly manner, the firm’s 

U.S. IHC should have an adequate amount of 

loss-absorbing capacity to execute its U.S. 

resolution strategy. Thus, a firm’s U.S. IHC 

should have outstanding a minimum amount 

of loss-absorbing capacity, including longterm debt, to help ensure that the firm has 

adequate capacity to meet that need at the 

U.S. IHC on a consolidated basis (IHC LAC).7

Proceeds from a firm’s U.S. IHC LAC 

should be appropriately positioned between 

the U.S. IHC and the subsidiaries of the U.S. 

IHC that are material entities (U.S. IHC 

subsidiaries), consistent with any applicable 

rules requiring prepositioned resources at 

U.S. IDIs in the form of long-term debt. After 

adhering to any requirements related to 

prepositioning long-term debt at IDIs, the 

positioning of a firm’s remaining IHC LAC 

should balance the certainty associated with 

pre-positioning internal LAC directly at U.S. 

IHC subsidiaries with the flexibility provided 

by holding recapitalization resources at the 

U.S. IHC (contributable resources) to meet 

unanticipated losses at the U.S. IHC 

subsidiaries. That balance should take 

account of both pre-positioning at U.S. IHC 

subsidiaries and holding resources at the U.S. 

IHC, and the obstacles associated with each. 

With respect to material entities that are not 

subject to pre-positioning requirements, the 

firm should not rely exclusively on either full 

pre-positioning or U.S. IHC contributable 

resources to execute its U.S. resolution 

strategy, unless it has only one U.S. IHC 

subsidiary that is an operating subsidiary. 

The Plan should describe the positioning of 

internal LAC among the U.S. IHC and the 

U.S. IHC subsidiaries, along with analysis 

supporting such positioning. 

Finally, to the extent that pre-positioned 

internal LAC at a U.S. IHC subsidiary is in 

the form of intercompany debt and there are 

one or more entities between the lender and 

the borrower, the firm should structure the 

instruments so as to ensure that the U.S. IHC 

subsidiary can be recapitalized. 

Resolution Capital Execution Need 

(RCEN). To the extent necessitated by the 

firm’s U.S. resolution strategy, U.S. nonbranch material entities need to be 

recapitalized to a level that allows for an 

orderly resolution. The firm should have a 

methodology for periodically estimating the 

amount of capital that may be needed to 

support each U.S. IHC subsidiary after the 

U.S. IHC bankruptcy filing (RCEN). The 

firm’s positioning of IHC LAC should be able 

to support the RCEN estimates. 

The firm’s RCEN methodology should use 

conservative forecasts for losses and riskweighted assets and incorporate estimates of 

potential additional capital needs through 

the resolution period,8 consistent with the 

firm’s resolution strategy for its U.S. 

operations. The RCEN methodology should 

be calibrated such that recapitalized U.S. IHC 

subsidiaries will have sufficient capital to 

maintain market confidence as required 

under the U.S resolution strategy. Capital 

levels should meet or exceed all applicable 

regulatory capital requirements for ‘‘wellcapitalized’’ status and meet estimated 

additional capital needs throughout 

resolution. U.S. IHC subsidiaries that are not 

subject to capital requirements may be 

considered sufficiently recapitalized when 

they have achieved capital levels typically 

required to obtain an investment-grade credit 

rating or, if the entity is not rated, an 

equivalent level of financial soundness. 

Finally, the methodology should be 

independently reviewed, consistent with the 

firm’s corporate governance processes and 

controls for the use of models and 

methodologies. 

U.S. MPOE 

The agencies do not propose issuing 

guidance on this topic to firms whose Plans 

contemplate a U.S. MPOE resolution strategy. 

IV. Liquidity 

U.S. SPOE 

The firm should have the liquidity 

capabilities necessary to execute its U.S 

resolution strategy, including those described 

below. For resolution purposes, these 

capabilities should include having an 

appropriate model and process for estimating 

and maintaining sufficient liquidity at—or 

readily available from the U.S. IHC to—U.S. 

IHC subsidiaries, and a methodology for 

estimating the liquidity needed to 

successfully execute the U.S. resolution 

strategy, as described below. 

Capabilities. A firm is expected to have a 

comprehensive understanding of funding 

sources, uses, and risks at material entities 

and identified critical operations, including 

how funding sources may be affected under 

stress. For example, a firm should have and 

describe its capabilities to: 

(A) Evaluate the funding requirements 

necessary to perform identified critical 

operations, including shared and outsourced 

services and access to financial market 

utilities (FMUs); 9

(B) Monitor liquidity reserves and relevant 

custodial arrangements by jurisdiction and 

material entity; 10

(C) Routinely test funding and liquidity 

outflows and inflows for U.S. non-branch 

material entities at the legal entity level 


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11 Id. 

12 12 CFR 252.156(e). 

13To the extent HQLA is held at the U.S. IHC or 

at a U.S. IHC subsidiary, the model must consider 

whether such funds are freely available. To be 

freely available, the HQLA must be free of legal, 

regulatory, contractual, and other restrictions on the 

ability of the material entity to liquidate, sell, or 

transfer the asset. 

14 ‘‘Model’’ refers to the set of calculations 

required by Regulation YY that estimate the U.S. 

IHC’s liquidity position. 

15The U.S. IHC should calculate its cash-flow 

sources from its affiliates consistent with the net 

internal stressed cash-flow need calculation in 

§ 252.157(c)(2)(iv) of Regulation YY. 

16External communications include those with 

U.S. and foreign authorities and other external 

stakeholders. 

under a range of adverse stress scenarios, 

taking into account the effect on intra-day, 

overnight, and term funding flows between 

affiliates and across jurisdictions; 

(D) Assess existing and potential 

restrictions on the transfer of liquidity 

between U.S. non-branch material entities; 11

and 

(E) Develop contingency strategies to 

maintain funding for U.S. non-branch 

material entities and identified critical 

operations in the event of a disruption in the 

specified firm’s current funding model.12

Resolution Liquidity Adequacy and 

Positioning (RLAP). With respect to RLAP, 

the firm should be able to measure the standalone liquidity position of each U.S. nonbranch material entity—i.e., the high-quality 

liquid assets (HQLA) at the U.S. non-branch 

material entity less net outflows to third 

parties and affiliates—and ensure that 

liquidity is readily available to meet any 

deficits. The RLAP model should cover a 

period of at least 30 days and reflect the 

idiosyncratic liquidity profile of the U.S. IHC 

and risk of each U.S. IHC subsidiary. The 

model should balance the reduction in 

frictions associated with holding liquidity 

directly at the U.S. IHC subsidiary with the 

flexibility provided by holding HQLA at the 

U.S. IHC or at a U.S. IHC subsidiary available 

to meet unanticipated outflows at other U.S. 

IHC subsidiaries.13 The firm should not rely 

exclusively on either full pre-positioning or 

U.S. IHC contributable resources to execute 

its U.S. resolution strategy, unless it has only 

one U.S. IHC subsidiary that is an operating 

subsidiary. 

The model 14 should ensure that on a 

consolidated basis the U.S. IHC holds 

sufficient HQLA to cover net liquidity 

outflows of the U.S. non-branch material 

entities. The model should also measure the 

stand-alone net liquidity positions of each 

U.S. non-branch material entity. The standalone net liquidity position of each U.S. nonbranch material entity (HQLA less net 

outflows) should be measured using the 

firm’s internal liquidity stress test 

assumptions and should treat inter-affiliate 

exposures in the same manner as third-party 

exposures. For example, an overnight 

unsecured exposure to a non-U.S. affiliate 

should be assumed to mature. Finally, the 

firm should not assume that a net liquidity 

surplus at any U.S. IHC subsidiary that is a 

depository institution could be moved to 

meet net liquidity deficits at an affiliate, or 

to augment U.S. IHC resources, consistent 

with Regulation W. 

Additionally, the RLAP methodology 

should take into account for each of the U.S. 

IHC, U.S. IHC subsidiaries, and any branch 

that is a material entity (A) the daily 

contractual mismatches between their 

respective inflows and outflows; (B) their 

respective daily flows from movement of 

cash and collateral for all inter-affiliate 

transactions; and (C) their respective daily 

stressed liquidity flows and trapped liquidity 

as a result of actions taken by clients, 

counterparties, key FMUs, and foreign 

supervisors, among others. 

In calculating its RLAP estimate, the U.S. 

IHC should calculate its liquidity position 

with respect to its foreign parent, branches 

and agencies, and other affiliates (together, 

affiliates) separately from its liquidity 

position with respect to third parties, and 

should not offset inflows from affiliated 

parties against outflows to external parties. In 

addition, a U.S. IHC should use cash-flow 

sources from its affiliates to offset cash-flow 

needs of its affiliates only to the extent that 

the term of the cash-flow source from its 

affiliates is the same as, or shorter than, the 

term of the cash-flow need of its affiliates.15

Resolution Liquidity Execution Need 

(RLEN). The firm should have a methodology 

for estimating the liquidity needed after the 

U.S. IHC’s bankruptcy filing to stabilize any 

surviving U.S. IHC subsidiaries and to allow 

those entities to operate post-filing, in 

accordance with the U.S. strategy. 

The firm’s RLEN methodology should: 

A. Estimate the minimum operating 

liquidity (MOL) needed at each U.S. IHC 

subsidiary that is a material entity to ensure 

those entities could continue to operate, to 

the extent relied upon in the U.S. resolution 

strategy, after implementation of the U.S. 

resolution strategy and/or to support a winddown strategy; 

B. Provide daily cash flow forecasts by U.S. 

IHC subsidiary to support estimation of peak 

funding needs to stabilize each entity under 

resolution; 

C. Provide a comprehensive breakout of all 

inter-affiliate transactions and arrangements 

that could impact the MOL or peak funding 

needs estimates for the U.S. IHC subsidiaries; 

and 

D. Estimate the minimum amount of 

liquidity required at each U.S. IHC subsidiary 

to meet the MOL and peak needs noted 

above, which would inform the provision of 

financial resources from the foreign parent to 

the U.S. IHC, or if the foreign parent is 

unable or unwilling to provide such financial 

support, any preparatory resolution-related 

actions. 

The MOL estimates should capture U.S. 

IHC subsidiaries’ intraday liquidity 

requirements, operating expenses, working 

capital needs, and inter-affiliate funding 

frictions to ensure that U.S. IHC subsidiaries 

could operate without disruption during the 

resolution. 

The peak funding needs estimates should 

be projected for each U.S. IHC subsidiary and 

cover the length of time the firm expects it 

would take to stabilize that U.S. IHC 

subsidiary. Inter-affiliate funding frictions 

should be taken into account in the 

estimation process. 

The firm’s forecasts of MOL and peak 

funding needs should ensure that U.S. IHC 

subsidiaries could operate through resolution 

consistent with regulatory requirements, 

market expectations, and the firm’s postfailure strategy. These forecasts should 

inform the RLEN estimate, i.e., the minimum 

amount of HQLA required to facilitate the 

execution of the firm’s strategy for the U.S. 

IHC subsidiaries. 

For nonsurviving U.S. IHC subsidiaries, the 

firm should provide analysis and an 

explanation of how the material entity’s 

resolution could be accomplished within a 

reasonable period of time and in a manner 

that substantially mitigates the risk of serious 

adverse effects on U.S. financial stability. For 

example, if a U.S. IHC subsidiary that is a 

broker-dealer is assumed to fail and enter 

resolution under the Securities Investor 

Protection Act, the firm should provide an 

analysis of the potential impacts on funding 

and asset markets and on prime brokerage 

clients, bearing in mind the objective of an 

orderly resolution. 

U.S. MPOE 

The firm should have the liquidity 

capabilities necessary to execute its U.S. 

resolution strategy. A Plan with a U.S. MPOE 

strategy should include analysis and 

projections of a range of liquidity needs 

during resolution, including intraday; reflect 

likely failure and resolution scenarios; and 

consider the guidance on assumptions 

provided in Section X, Format and Structure 

of Plans; Assumptions. 

V. Governance Mechanisms 

U.S. SPOE 

A firm should identify the governance 

mechanisms that would ensure that 

communication and coordination occur 

between the boards of the U.S. IHC or a U.S. 

subsidiary and the foreign parent to facilitate 

the provision of financial support, or if not 

forthcoming, any preparatory resolutionrelated actions to facilitate an orderly 

resolution. Playbooks, Foreign Parent 

Support, and Triggers. Governance playbooks 

should detail the board and senior 

management actions of U.S. non-branch 

material entities that would be needed under 

the firm’s U.S. resolution strategy. The 

governance playbooks should also include a 

discussion of: (A) the firm’s proposed U.S. 

communications strategy, both internal and 

external; 16 (B) the fiduciary responsibilities 

of the applicable board(s) of directors or 

other similar governing bodies and how 

planned actions would be consistent with 

such responsibilities applicable at the time 

actions are expected to be taken; (C) potential 

conflicts of interest, including interlocking 

boards of directors; (D) any employee 

retention policy; and (E) any other 

limitations on the authority of the U.S. IHC 

and the U.S. IHC subsidiary boards and 

senior management to implement the U.S. 

resolution strategy. All responsible parties 

and timeframes for action should be 

identified. Governance playbooks should be 


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17A firm is a user of PCS services if it accesses 

PCS services through an agent bank or it uses the 

services of a financial market utility (FMU) through 

its membership in that FMU or through an agent 

bank. A firm is a provider of PCS services if it 

provides PCS services to clients as an agent bank 

or it provides clients with access to an FMU or 

agent bank through the firm’s membership in or 

relationship with that service provider. A firm is 

also a provider if it provides clients with PCS 

services through the firm’s own operations (e.g., 

payment services or custody services). 

18For purposes of this section, a client is an 

individual or entity, including affiliates of the firm, 

to whom the firm provides PCS services and any 

related credit or liquidity offered in connection 

with those services. 

19 In identifying entities as key, examples of 

quantitative criteria may include: for a client, 

transaction volume/value, market value of 

exposures, assets under custody, usage of PCS 

services, and any extension of related intraday 

credit or liquidity; for an FMU, the aggregate 

volumes and values of all transactions processed 

through such FMU; and for an agent bank, assets 

under custody, the value of cash and securities 

settled, and extensions of intraday credit. 

updated periodically for each entity whose 

governing body would need to act under the 

firm’s U.S. resolution strategy. 

In order to meet liquidity needs at the U.S. 

non-branch material entities, the firm may 

either fully pre-position liquidity in the U.S. 

non-branch material entities or develop a 

mechanism for planned foreign parent 

support, of any amount not pre-positioned, 

for the successful execution of the U.S. 

strategy. Mechanisms to support readily 

available liquidity may include a term 

liquidity facility between the U.S. IHC and 

the foreign parent that can be drawn as 

needed and as informed by the firm’s RLEN 

estimates and liquidity positioning. To the 

extent the preferred global resolution strategy 

for the firm is a home country SPOE 

resolution, the mechanism should be 

designed so as to not interfere with the 

execution of that strategy. The Plan should 

include analysis of how the U.S. IHC/foreign 

parent facility is funded or buffered for by 

the foreign parent. The sufficiency of the 

liquidity should be informed by the firm’s 

RLAP and RLEN estimates for the U.S. nonbranch material entities. Additionally, the 

Plan should include analysis of the potential 

challenges to the planned foreign parent 

support mechanism and associated mitigants. 

Where applicable, the analysis should 

discuss applicable non-U.S. law and crossborder legal challenges (e.g., challenges 

related to enforcing contracts governed by 

foreign law). The analysis should identify the 

mitigant(s) to such challenges that the firm 

considers most effective. 

The firm should be prepared to increase 

communication and coordination at the 

appropriate time in order to mitigate 

financial, operational, legal, and regulatory 

vulnerabilities. To facilitate this 

communication and coordination, the firm 

should establish clearly identified triggers 

linked to specific actions for: 

(A) The escalation of information to U.S. 

senior management, U.S. risk committee and 

U.S. governing bodies to potentially take the 

corresponding actions as the U.S. operations 

experience material financial distress, 

leading eventually to the decision to 

implement the U.S. resolution strategy. 

i. Triggers should identify when and under 

what conditions the U.S. material entities 

would transition from business-as-usual 

conditions to a stress period. 

ii. Triggers should also take into 

consideration changes in the foreign parent’s 

condition from business-as-usual conditions 

through resolution. 

(B) The escalation of information to and 

discussions with the appropriate governing 

bodies to confirm whether the governing 

bodies are able and willing to provide 

financial resources to support U.S. 

operations. 

i. Triggers should be based on the firm’s 

methodology for forecasting the liquidity and 

capital needed to facilitate the U.S. strategy. 

For example, triggers may be established that 

reflect U.S. non-branch material entities’ 

financial resources approaching RCEN/RLEN 

estimates, with corresponding actions to 

confirm the foreign parent’s financial 

capability and willingness to provide 

sufficient support. 

Corresponding escalation procedures, 

actions, and timeframes should be 

constructed so that breach of the triggers will 

allow prerequisite actions to be completed. 

For example, breach of the triggers needs to 

occur early enough to provide for 

communication, coordination, and 

confirmation of the provision of resources 

from the foreign parent. 

Support Within the United States. If the 

Plan provides for the provision of capital and 

liquidity by a U.S. material entity (e.g., the 

U.S. IHC) to its U.S. affiliates prior to the U.S. 

IHC’s bankruptcy filing (Support), the Plan 

should also include a detailed legal analysis 

of the potential state law and bankruptcy law 

challenges and mitigants to providing the 

Support. Specifically, the analysis should 

identify potential legal obstacles and explain 

how the firm would seek to ensure that 

Support would be provided as planned. Legal 

obstacles include claims of fraudulent 

transfer, preference, breach of fiduciary duty, 

and any other applicable legal theory 

identified by the firm. The analysis also 

should include related claims that may 

prevent or delay an effective recapitalization, 

such as equitable claims to enjoin the transfer 

(e.g., imposition of a constructive trust by the 

court). The analysis should apply the actions 

contemplated in the Plan regarding each 

element of the claim, the anticipated timing 

for commencement and resolution of the 

claims, and the extent to which adjudication 

of such claim could affect execution of the 

firm’s U.S. resolution strategy. The analysis 

should include mitigants to the potential 

challenges to the planned Support. The Plan 

should identify the mitigant(s) to such 

challenges that the firm considers most 

effective. 

Furthermore, the Plan should describe key 

motions to be filed at the initiation of any 

bankruptcy proceeding related to (as 

appropriate) asset sales and other nonroutine matters. 

U.S. MPOE 

A firm should identify the governance 

mechanisms that would ensure that 

communication and coordination occur 

between the governing body of the U.S. 

operations (for example, the boards of the 

U.S. IHC or a U.S. subsidiary) and the foreign 

parent to facilitate any preparatory 

resolution-related actions to facilitate an 

orderly resolution. The Plan should also 

detail the board and senior management 

actions of U.S. material entities that would be 

needed under the firm’s U.S. resolution 

strategy. 

The firm should be prepared to increase 

communication and coordination at the 

appropriate time in order to mitigate 

financial, operational, legal, and regulatory 

vulnerabilities. To facilitate this 

communication and coordination, the firm 

should establish clearly identified triggers 

linked to specific actions for the escalation of 

information to U.S. senior management, U.S. 

risk committee and U.S. governing bodies to 

potentially take the corresponding actions as 

the U.S. operations experience material 

financial distress, leading eventually to the 

decision to implement the U.S. resolution 

strategy. The triggers should: 

A. Identify when and under what 

conditions the U.S. material entities would 

transition from business-as-usual conditions 

to a stress period. 

B. Take into consideration changes in the 

foreign parent’s condition from business-asusual conditions through resolution. 

VI. Operational 

U.S. SPOE 

Payment, Clearing, and Settlement Activities 

Framework. Maintaining continuity of 

payment, clearing, and settlement (PCS) 

services is critical for the orderly resolution 

of firms that are either users or providers,17

or both, of PCS services. A firm should 

demonstrate capabilities for continued access 

to PCS services essential to an orderly 

resolution under its U.S. resolution strategy 

through a framework to support such access 

by: 

• Identifying clients,18 FMUs, and agent 

banks as key from the firm’s perspective for 

the firm’s U.S. material entities, identified 

critical operations, and core business lines, 

using both quantitative (volume and value) 19

and qualitative criteria; 

• Mapping U.S. material entities, 

identified critical operations, core business 

lines, and key clients of the firm’s U.S. 

operations to both key FMUs and key agent 

banks; and 

• Developing a playbook for each key FMU 

and key agent bank essential to an orderly 

resolution under its U.S. resolution strategy 

that reflects the firm’s role(s) as a user and/ 

or provider of PCS services. 

The framework should address direct 

relationships (e.g., a firm’s direct 

membership in an FMU, a firm’s provision of 

clients with PCS services through its own 

operations in the United States, or a firm’s 

contractual relationship with an agent bank) 

and indirect relationships (e.g., a firm’s 

provision of clients with access to the 

relevant FMU or agent bank through the firm’ 

membership in or relationship with that 

FMU or agent bank, or a firm’s U.S. affiliate 

and branch provision of U.S. material entities 

and key clients of the firm’s U.S. operations 


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Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / Notices 64653 

20Examples of potential adverse actions may 

include increased collateral and margin 

requirements and enhanced reporting and 

monitoring. 

21Where a firm is a provider of PCS services 

through the firm’s own operations in the United 

States, the firm is expected to produce a playbook 

for the U.S. material entities that provide those 

services, addressing each of the items described 

under ‘‘Content Related to Providers of PCS 

Services,’’ which include contingency arrangements 

to permit the firm’s key clients of the firm’s U.S. 

operations to maintain continued access to PCS 

services. 

22 12 CFR 243.5(e)(12) and 12 CFR 381.5(e)(12). 

23 Id. 

24 12 CFR 252.156(g). 

25 12 CFR 243.5(f)(l)(i) and 12 CFR 381.5(f)(1)(i). 

26 12 CFR 252.156(e). 

27 Id. 

with access to an FMU or agent bank). The 

framework also should address the potential 

impact of any disruption to, curtailment of, 

or termination of such direct and indirect 

relationships on the firm’s U.S. material 

entities, identified critical operations, and 

core business lines, as well as any 

corresponding impact on key clients of the 

firm’s U.S. operations. 

Playbooks for Continued Access to PCS 

Services. The firm is expected to provide a 

playbook for each key FMU and key agent 

bank that addresses considerations that 

would assist the firm and key clients of the 

firm’s U.S. operations in maintaining 

continued access to PCS services in the 

period leading up to and including the firm’s 

resolution under its U.S. resolution strategy. 

Each playbook should provide analysis of 

the financial and operational impact to the 

firm’s U.S. material entities and key clients 

of the firm’s U.S. operations due to adverse 

actions that may be taken by a key FMU or 

a key agent bank and contingency actions 

that may be taken by the firm. Each playbook 

also should discuss any possible alternative 

arrangements that would allow continued 

access to PCS services for the firm’s U.S. 

material entities, identified critical 

operations and core business lines, and key 

clients of the firm’s U.S. operations, while 

the firm is in resolution under its U.S. 

resolution strategy. The firm is not expected 

to incorporate a scenario in which it loses 

key FMU or key agent bank access into its 

U.S. resolution strategy or its RLEN and 

RCEN estimates. The firm should continue to 

engage with key FMUs, key agent banks, and 

key clients of the firm’s U.S. operations, and 

playbooks should reflect any feedback 

received during such ongoing outreach. 

Content Related to Users of PCS Services. 

Individual key FMU and key agent bank 

playbooks should include: 

• Descriptions of the firm’s relationship as 

a user, including through indirect access, 

with the key FMU or key agent bank and the 

identification and mapping of PCS services to 

the firm’s U.S. material entities, identified 

critical operations, and core business lines 

that use those PCS services; 

• Discussion of the potential range of 

adverse actions that may be taken by that key 

FMU or key agent bank when the firm is in 

resolution under its U.S. resolution 

strategy,20 the operational and financial 

impact of such actions on the firm’s U.S. 

material entities, identified critical 

operations, and core business lines, and 

contingency arrangements that may be 

initiated by the firm in response to potential 

adverse actions by the key FMU or key agent 

bank; and 

• Discussion of PCS-related liquidity 

sources and uses in business-as-usual (BAU), 

in stress, and in the resolution period, 

presented by currency type (with U.S. dollar 

equivalent) and by U.S. material entity. 

Æ PCS Liquidity Sources: These may 

include the amounts of intraday extensions 

of credit, liquidity buffer, inflows from FMU 

participants, and prefunded amounts of key 

clients of the firm’s U.S. operations in BAU, 

in stress, and in the resolution period. The 

playbook also should describe intraday credit 

arrangements (e.g., facilities of the key FMU, 

key agent bank, or a central bank) and any 

similar custodial arrangements that allow 

ready access to a firm’s funds for PCS-related 

key FMU and key agent bank obligations 

(including margin requirements) in all 

currencies relevant to the firm’s 

participation, including placements of firm 

liquidity at central banks, key FMUs, and key 

agent banks. 

Æ PCS Liquidity Uses: These may include 

margin and prefunding by the firm and key 

clients of the firm’s U.S. operations, and 

intraday extensions of credit, including 

incremental amounts required during 

resolution. 

Æ Intraday Liquidity Inflows and Outflows: 

The playbook should describe the firm’s 

ability to control intraday liquidity inflows 

and outflows and to identify and prioritize 

time-specific payments. The playbook also 

should describe any account features that 

might restrict the firm’s ready access to its 

liquidity sources. 

Content Related to Providers of PCS 

Services.21 Individual key FMU and key 

agent bank playbooks should include: 

• Identification and mapping of PCS 

services to the firm’s U.S. material entities, 

identified critical operations, and core 

business lines that provide those PCS 

services, and a description of the scale and 

the way in which each provides PCS 

services; 

• Identification and mapping of PCS 

services to key clients of the firm’s U.S. 

operations to whom the firm’s U.S. material 

entities, identified critical operations, and 

core business lines provide such PCS 

services and any related credit or liquidity 

offered in connection with such services; 

• Discussion of the potential range of firm 

contingency arrangements available to 

minimize disruption to the provision of PCS 

services to key clients of the firm’s U.S. 

operations, including the viability of 

transferring activity and any related assets of 

key clients of the firm’s U.S. operations, as 

well as any alternative arrangements that 

would allow the key clients of the firm’s U.S. 

operations continued access to PCS services 

if the firm could no longer provide such 

access (e.g., due to the firm’s loss of key FMU 

or key agent bank access), and the financial 

and operational impacts of such 

arrangements from the firm’s perspective; 

• Descriptions of the range of contingency 

actions that the firm may take concerning its 

provision of intraday credit to key clients of 

the firm’s U.S. operations, including analysis 

quantifying the potential liquidity the firm 

could generate by taking such actions in 

stress and in the resolution period, such as 

(i) requiring key clients of the firm’s U.S. 

operations to designate or appropriately preposition liquidity, including through 

prefunding of settlement activity, for PCSrelated key FMU and key agent bank 

obligations at specific material entities of the 

firm (e.g., direct members of key FMUs) or 

any similar custodial arrangements that allow 

ready access to funds for such obligations in 

all relevant currencies of key clients of the 

firm’s U.S. operations; (ii) delaying or 

restricting PCS activity of key clients of the 

firm’s U.S. operations; and (iii) restricting, 

imposing conditions upon (e.g., requiring 

collateral), or eliminating the provision of 

intraday credit or liquidity to key clients of 

the firm’s U.S. operations; and 

• Descriptions of how the firm will 

communicate to key clients of the firm’s U.S. 

operations the potential impacts of 

implementation of any identified 

contingency arrangements or alternatives, 

including a description of the firm’s 

methodology for determining whether any 

additional communication should be 

provided to some or all key clients of the 

firm’s U.S. operations (e.g., due to BAU usage 

of that access and/or related intraday credit 

or liquidity of the key client of the firm’s U.S. 

operations), and the expected timing and 

form of such communication. 

Capabilities. The firm is expected to have 

and describe capabilities to understand, for 

each U.S. material entity, the obligations and 

exposures associated with PCS activities, 

including contractual obligations and 

commitments. The firm should be able to: 

• Track the following items by (i) U.S. 

material entity and, (ii) with respect to 

customers, counterparties, and agents and 

service providers, by location and 

jurisdiction: 

Æ PCS activities, with each activity 

mapped to the relevant material entities, 

identified critical operations, and core 

business lines; 22

Æ Customers and counterparties for PCS 

activities, including values and volumes of 

various transaction types, as well as used and 

unused capacity for all lines of credit; 23

Æ Exposures to and volumes transacted 

with FMUs, nostro agents, and custodians; 

and 24

Æ Services provided and service level 

agreements, as applicable, for other current 

agents and service providers (internal and 

external); 25

• Assess the potential effects of adverse 

actions by FMUs, nostro agents, custodians, 

and other agents and service providers, 

including suspension or termination of 

membership or services, on the firm’s U.S. 

operations and customers and counterparties 

of those U.S. operations; 26

• Develop contingency arrangements in 

the event of such adverse actions; 27 and 

• Quantify the liquidity needs and 

operational capacity required to meet all PCS 


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28The policy may reference subsidiary or related 

policies already in place, as implementation may 

differ based on business line or other factors. 

29 ‘‘Shared services that support identified critical 

operations’’ or ‘‘critical shared services’’ are those 

that support identified critical operations 

conducted in whole or in material part in the 

United States. 

30The firm should consider whether these SLAs 

should be governed by the laws of a U.S. state and 

expressly subject to the jurisdiction of a court in the 

U.S. 

obligations, including any change in demand 

for and sources of liquidity needed to meet 

such obligations. 

Managing, Identifying, and Valuing 

Collateral. The firm is expected to have and 

describe its capabilities to manage, identify, 

and value the collateral that the U.S. nonbranch material entities receive from and 

post to external parties and affiliates. 

Specifically, the firm should: 

• Be able to query and provide aggregate 

statistics for all qualified financial contracts 

concerning cross-default clauses, downgrade 

triggers, and other key collateral-related 

contract terms—not just those terms that may 

be impacted in an adverse economic 

environment—across contract types, business 

lines, legal entities, and jurisdictions; 

• Be able to track both collateral sources 

(i.e., counterparties that have pledged 

collateral) and uses (i.e., counterparties to 

whom collateral has been pledged) at the 

CUSIP level on at least a t+1 basis; 

• Have robust risk measurements for crossentity and cross-contract netting, including 

consideration of where collateral is held and 

pledged; 

• Be able to identify CUSIP and asset class 

level information on collateral pledged to 

specific central counterparties by legal entity 

on at least a t+1 basis; 

• Be able to track and report on interbranch collateral pledged and received on at 

least a t+1 basis and have clear policies 

explaining the rationale for such inter-branch 

pledges, including any regulatory 

considerations; and 

• Have a comprehensive collateral 

management policy that outlines how the 

firm as a whole approaches collateral and 

serves as a single source for governance.28

In addition, as of the conclusion of any 

business day, the firm should be able to: 

• Identify the legal entity and geographic 

jurisdiction where counterparty collateral is 

held; 

• Document all netting and rehypothecation arrangements with affiliates 

and external parties, by legal entity; and 

• Track and manage collateral 

requirements associated with counterparty 

credit risk exposures between affiliates, 

including foreign branches. 

At least on a quarterly basis, the firm 

should be able to: 

• Review the material terms and 

provisions of International Swaps and 

Derivatives Association Master Agreements 

and the Credit Support Annexes, such as 

termination events, for triggers that may be 

breached as a result of changes in market 

conditions; 

• Identify legal and operational differences 

and potential challenges in managing 

collateral within specific jurisdictions, 

agreement types, counterparty types, 

collateral forms, or other distinguishing 

characteristics; and 

• Forecast changes in collateral 

requirements and cash and non-cash 

collateral flows under a variety of stress 

scenarios. 

Management Information Systems. The 

firm should have the management 

information systems (MIS) capabilities to 

readily produce data on a U.S. legal entity 

basis (including any U.S. branch) and have 

controls to ensure data integrity and 

reliability. The firm also should perform a 

detailed analysis of the specific types of 

financial and risk data that would be 

required to execute the U.S. resolution 

strategy and how frequently the firm would 

need to produce the information, with the 

appropriate level of granularity. The firm 

should have the capabilities to produce the 

following types of information in a timely 

manner and describe these capabilities in the 

Plan: 

• Financial statements for each material 

entity (at least monthly); 

• External and inter-affiliate credit 

exposures, both on- and off-balance sheet, by 

type of exposure, counterparty, maturity, and 

gross payable and receivable; 

• Gross and net risk positions with 

internal and external counterparties; 

• Guarantees, cross holdings, financial 

commitments and other transactions between 

material entities; 

• Data to facilitate third-party valuation of 

assets and businesses, including risk metrics; 

• Key third-party contracts, including the 

provider, provider’s location, service(s) 

provided, legal entities that are a party to or 

a beneficiary of the contract, and key 

contractual rights (for example, termination 

and change in control clauses); 

• Legal agreement information, including 

parties to the agreement and key terms and 

interdependencies (for example, change in 

control, collateralization, governing law, 

termination events, guarantees, and crossdefault provisions); 

• Service level agreements between 

affiliates, including the service(s) provided, 

the legal entity providing the service, legal 

entities receiving the service, and any 

termination/transferability provisions; 

• Licenses and memberships to all 

exchanges and value transfer networks, 

including FMUs; 

• Key management and support personnel, 

including dual-hatted employees, and any 

associated retention agreements; 

• Agreements and other legal documents 

related to property, including facilities, 

technology systems, software, and 

intellectual property rights. The information 

should include ownership, physical location, 

where the property is managed and names of 

legal entities and lines of business that the 

property supports; and 

• Updated legal records for domestic and 

foreign entities, including entity type and 

purpose (for example, holding company, 

bank, broker dealer, and service entity), 

jurisdiction(s), ownership, and regulator(s). 

Shared and Outsourced Services. The firm 

should maintain a fully actionable 

implementation plan to ensure the continuity 

of shared services that support identified 

critical operations 29 or core business lines 

and robust arrangements to support the 

continuity of shared and outsourced services, 

including, without limitation, appropriate 

plans to retain key personnel relevant to the 

execution of the firm’s strategy. For example, 

specified firms should evaluate internal and 

external dependencies and develop 

documented strategies and contingency 

arrangements for the continuity or 

replacement of the shared and outsourced 

services that are necessary to maintain 

identified critical operations or core business 

lines. Examples may include personnel, 

facilities, systems, data warehouses, and 

intellectual property. Specified firms also 

should maintain current cost estimates for 

implementing such strategies and 

contingency arrangements. 

If a material entity provides shared services 

that support identified critical operations or 

core business lines, and the continuity of 

these shared services relies on the assumed 

cooperation, forbearance, or other nonintervention of regulator(s) in any 

jurisdiction, the Plan should discuss the 

extent to which the resolution or insolvency 

of any other group entities operating in that 

same jurisdiction may adversely affect the 

assumed cooperation, forbearance, or other 

regulatory non-intervention. If a material 

entity providing shared services that support 

identified critical operations or core business 

lines is located outside of the United States, 

the Plan should discuss how the firm will 

ensure the operational continuity of such 

shared services through resolution. 

The firm should (A) maintain an 

identification of all shared services that 

support identified critical operations or core 

business lines; (B) maintain a mapping of 

how/where these services support its core 

business lines and identified critical 

operations; (C) incorporate such mapping 

into legal entity rationalization criteria and 

implementation efforts; and (D) mitigate 

identified continuity risks through 

establishment of service-level agreements 

(SLAs) for all shared services that support 

identified critical operations or core business 

lines. 

SLAs should fully describe the services 

provided, reflect pricing considerations on an 

arm’s-length basis where appropriate, and 

incorporate appropriate terms and conditions 

to (A) prevent automatic termination upon 

certain resolution-related events and (B) 

achieve continued provision of such services 

during resolution.30 The firm should also 

store SLAs in a central repository or 

repositories located in or immediately 

accessible from the U.S. at all times, 

including in resolution (and subject to 

enforceable access arrangements) in a 

searchable format. In addition, the firm 

should ensure the financial resilience of 

internal shared service providers by 

maintaining working capital for six months 

(or through the period of stabilization as 

required in the firm’s U.S. resolution 

strategy) in such entities sufficient to cover 

contract costs, consistent with the U.S. 


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31This should be interpreted to include data 

access and intellectual property rights. 

resolution strategy. The firm should 

demonstrate that such working capital is held 

in a manner that ensures its availability for 

its intended purpose. 

The firm should identify all critical service 

providers and outsourced services that 

support identified critical operations or core 

business lines and identify any that could not 

be promptly substituted. The firm should (A) 

evaluate the agreements governing these 

services to determine whether there are any 

that could be terminated upon 

commencement of any resolution despite 

continued performance, and (B) update 

contracts to incorporate appropriate terms 

and conditions to prevent automatic 

termination upon commencement of any 

resolution proceeding and facilitate 

continued provision of such services. Relying 

on entities projected to survive during 

resolution to avoid contract termination is 

insufficient to ensure continuity. In the Plan, 

the firm should document the amendment of 

any such agreements governing these 

services. 

Qualified Financial Contracts. The Plan 

should reflect the current state of how the 

early termination of qualified financial 

contracts could impact the resolution of the 

firm’s operations, including potential 

termination of any contracts that are not 

subject to contractual or regulatory stays of 

cross-default rights. Specifically, the Plan is 

expected to reflect the firm’s progress 

regarding contractual stays in qualified 

financial contracts as of the date the firm 

submits its Plan or as of a specified earlier 

date. A firm that has adhered to the 

International Swaps and Derivatives 

Association’s (ISDA) 2018 U.S. Resolution 

Stay Protocol or its antecedent, ISDA’s 2015 

Universal Resolution Stay Protocol (together, 

the Protocols) should discuss the extent of 

the firm’s adherence to the Protocols in its 

Plan (and may also discuss the impact on 

U.S. operations of the firm’s adherence to 

ISDA’s 2016 Jurisdictional Modular Protocol 

on its non-U.S. operations). A Plan should 

also explain the firm’s processes for entering 

bilateral contracts with third-party entities 

that do not adhere to the Protocols and 

provide examples of the contractual language 

that is used under those circumstances. 

U.S. MPOE 

Payment, Clearing, and Settlement (PCS) 

Capabilities. Firms are expected to have and 

describe capabilities to understand, for each 

U.S. material entity, its obligations and 

exposures associated with PCS activities, 

including contractual obligations and 

commitments. For example, firms should be 

able to: 

• As users of PCS services: 

Æ Track the following items by: (i) U.S. 

material entity; and (ii) with respect to 

customers, counterparties, and agents and 

service providers, location and jurisdiction: 

D PCS activities, with each activity 

mapped to the relevant material entities, 

identified critical operations, and core 

business lines; 

D Customers and counterparties for PCS 

activities, including values and volumes of 

various transaction types, as well as used and 

unused capacity for all lines of credit; 

D Exposures to and volumes transacted 

with FMUs, nostro agents, and custodians; 

and 

D Services provided and service level 

agreements, as applicable, for other current 

agents and service providers (internal and 

external). 

Æ Assess the potential effects of adverse 

actions by FMUs, nostro agents, custodians, 

and other agents and service providers, 

including suspension or termination of 

membership or services, on the firm’s U.S. 

operations and customers and counterparties 

of those U.S. operations; 

Æ Develop contingency arrangements in 

the event of such adverse actions; and 

Æ Quantify the liquidity needs and 

operational capacity required to meet all PCS 

obligations, including intraday requirements. 

• As providers of PCS services: 

Æ Identify their PCS clients of their U.S 

operations and the services they provide to 

these clients, including volumes and values 

of transactions; 

Æ Quantify and explain time-sensitive 

payments; and 

Æ Quantify and explain intraday credit 

provided. 

Managing, Identifying and Valuing 

Collateral. The firm should have appropriate 

capabilities related to managing, identifying, 

and valuing the collateral that the U.S. nonbranch material entities receive from and 

posts to external parties and its affiliates, 

including tracking collateral received, 

pledged, and available at the CUSIP level and 

measuring exposures. 

Management Information Systems. The 

firm should have the management 

information systems (MIS) capabilities to 

readily produce data on a U.S. legal entity 

basis (including any U.S. branch) and have 

controls to ensure data integrity and 

reliability. The firm also should perform a 

detailed analysis of the specific types of 

financial and risk data that would be 

required to execute the U.S. resolution 

strategy. The firm should have the 

capabilities to produce the following types of 

information, as appropriate for its U.S. 

resolution strategy, in a timely manner and 

describe these capabilities in the Plan: 

• Financial statements for each material 

entity (at least monthly); 

• External and inter-affiliate credit 

exposures, both on- and off-balance sheet, by 

type of exposure, counterparty, maturity, and 

gross payable and receivable; 

• Gross and net risk positions with 

internal and external counterparties; 

• Guarantees, cross holdings, financial 

commitments and other transactions between 

material entities; 

• Data to facilitate third-party valuation of 

assets and businesses, including risk metrics; 

• Key third-party contracts, including the 

provider, provider’s location, service(s) 

provided, legal entities that are a party to or 

a beneficiary of the contract, and key 

contractual rights (for example, termination 

and change in control clauses); 

• Legal agreement information, including 

parties to the agreement and key terms and 

interdependencies (for example, change in 

control, collateralization, governing law, 

termination events, guarantees, and crossdefault provisions); 

• Service level agreements between 

affiliates, including the service(s) provided, 

the legal entity providing the service, legal 

entities receiving the service, and any 

termination/transferability provisions; 

• Licenses and memberships to all 

exchanges and value transfer networks, 

including FMUs; 

• Key management and support personnel, 

including dual-hatted employees, and any 

associated retention agreements; 

• Agreements and other legal documents 

related to property, including facilities, 

technology systems, software, and 

intellectual property rights. The information 

should include ownership, physical location, 

where the property is managed and names of 

legal entities and lines of business that the 

property supports; and 

• Updated legal records for domestic and 

foreign entities, including entity type and 

purpose (for example, holding company, 

bank, broker dealer, and service entity), 

jurisdiction(s), ownership, and regulator(s). 

Shared and Outsourced Services. The firm 

should maintain robust arrangements to 

support the continuity of shared and 

outsourced services that support any 

identified critical operations or are material 

to the execution of the U.S. resolution 

strategy, including appropriate plans to 

retain key personnel relevant to the 

execution of the firm’s strategy. For example, 

specified firms should evaluate internal and 

external dependencies and develop 

documented strategies and contingency 

arrangements for the continuity or 

replacement of the shared and outsourced 

services that are necessary to maintain 

identified critical operations or are material 

to the execution of the U.S. resolution 

strategy. Examples may include personnel, 

facilities, systems, data warehouses, and 

intellectual property. Specified firms also 

should maintain current cost estimates for 

implementing such strategies and 

contingency arrangements. If a material 

entity provides shared services that support 

identified critical operations,31 or are 

material to the execution of the U.S. 

resolution strategy, and the continuity of 

these shared services relies on the assumed 

cooperation, forbearance, or other nonintervention of regulator(s) in any 

jurisdiction, the Plan should discuss the 

extent to which the resolution or insolvency 

of any other group entities operating in that 

same jurisdiction may adversely affect the 

assumed cooperation, forbearance, or other 

regulatory non-intervention. If a material 

entity providing shared services that support 

identified critical operations, or are material 

to the execution of the U.S. resolution 

strategy, is located outside of the United 

States, the Plan should discuss how the firm 

will ensure the operational continuity of 

such shared services through resolution. 

The firm should (A) maintain an 

identification of all shared services that 

support identified critical operations or are 

material to the execution of the U.S. 

resolution strategy, and (B) mitigate 

identified continuity risks through 


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32The firm should consider whether these SLAs 

should be governed by the laws of a U.S. state and 

expressly subject to the jurisdiction of a court in the 

United States. 

33Firms should take into consideration historical 

practice, by applicable regulators, regarding asset 

maintenance requirements imposed during stress. 

establishment of SLAs for all shared services 

supporting identified critical operations or 

are material to the execution of the U.S. 

resolution strategy. SLAs should fully 

describe the services provided and 

incorporate appropriate terms and conditions 

to: (A) prevent automatic termination upon 

certain resolution-related events; and (B) 

achieve continued provision of such services 

during resolution.32

The firm should identify all critical service 

providers and outsourced services that 

support identified critical operations or are 

material to the execution of the U.S. 

resolution strategy. Any of these services that 

cannot be promptly substituted should be 

identified in a firm’s Plan. The firm should: 

(A) evaluate the agreements governing these 

services to determine whether there are any 

that could be terminated upon 

commencement of any resolution despite 

continued performance; and (B) update 

contracts to incorporate appropriate terms 

and conditions to prevent automatic 

termination upon commencement of any 

resolution proceeding and facilitate 

continued provision of such services. Relying 

on entities projected to survive during 

resolution to avoid contract termination is 

insufficient to ensure continuity. In the Plan, 

the firm should document the amendment of 

any such agreements governing these 

services. 

VII. Branches 

U.S. SPOE & U.S. MPOE 

Continuity of Operations. If the Plan 

assumes that federal or state regulators, as 

applicable, do not take possession of any U.S. 

branch that is a material entity, the Plan 

should support that assumption. 

For any U.S. branch that is a material 

entity, the Plan should describe and 

demonstrate how the branch would continue 

to facilitate FMU access for identified critical 

operations and meet funding needs. For such 

a U.S. branch, the Plan should describe how 

it would meet supervisory requirements 

imposed by state regulators or the 

appropriate Federal banking agency, as 

appropriate, including maintaining a net due 

to position and complying with heightened 

asset maintenance requirements.33 In 

addition, the Plan should describe how such 

a U.S. branch’s third-party creditors would 

be protected such that the state regulator or 

appropriate Federal banking agency would 

allow the branch to continue operations. 

Impact of the Cessation of Operations. The 

Plan should provide an analysis of the 

impact of the cessation of operations of any 

U.S. branch that is a material entity on the 

firm’s FMU access and identified critical 

operations, even if such scenario is not 

contemplated as part of the U.S. resolution 

strategy. The analysis should include a 

description of how identified critical 

operations could be transferred to a U.S. IHC 

subsidiary or sold in resolution, the obstacles 

presented by the cessation of shared services 

that support identified critical operations 

provided by any U.S. branch that is a 

material entity, and mitigants that could 

address such obstacles in a timely manner. 

VIII. Legal Entity Rationalization & 

Separability 

Legal Entity Rationalization 

U.S. SPOE 

Legal Entity Rationalization Criteria (LER 

Criteria). A firm should develop and 

implement legal entity rationalization criteria 

that support the firm’s U.S. resolution 

strategy and minimize risk to U.S. financial 

stability in the event of resolution. LER 

Criteria should consider the best alignment of 

legal entities and business lines to improve 

the resolvability of U.S. operations under 

different market conditions. LER Criteria 

should govern the corporate structure and 

arrangements between the U.S. subsidiaries 

and U.S. branches in a way that facilitates 

resolvability of the firm’s U.S. operations as 

the firm’s U.S. activities, technology, 

business models, or geographic footprint 

change over time. 

Specifically, application of the criteria 

should: 

(A) Ensure that the allocation of activities 

across the firm’s U.S. branches and U.S. nonbranch material entities support the firm’s 

U.S. resolution strategy and minimize risk to 

U.S. financial stability in the event of 

resolution; 

(B) Facilitate the recapitalization and 

liquidity support of U.S. IHC subsidiaries, as 

required by the firm’s U.S. resolution 

strategy. Such criteria should include clean 

lines of ownership and clean funding 

pathways between the foreign parent, the 

U.S. IHC, and U.S. IHC subsidiaries; 

(C) Facilitate the sale, transfer, or winddown of certain discrete operations within a 

timeframe that would meaningfully increase 

the likelihood of an orderly resolution in the 

United States, including provisions for the 

continuity of associated services and 

mitigation of financial, operational, and legal 

challenges to separation and disposition; 

(D) Adequately protect U.S. subsidiary 

insured depository institutions from risks 

arising from the activities of any nonbank 

U.S. subsidiaries (other than those that are 

subsidiaries of an insured depository 

institution); and 

(E) Minimize complexity that could 

impede an orderly resolution in the United 

States and minimize redundant and dormant 

entities. 

These criteria should be built into the 

firm’s ongoing process for creating, 

maintaining, and optimizing the firm’s U.S. 

structure and operations on a continuous 

basis. 

U.S. MPOE 

Legal Entity Structure. A firm should 

maintain a legal entity structure that supports 

the firm’s U.S. resolution strategy and 

minimizes risk to U.S. financial stability in 

the event of the resolution of the firm’s U.S. 

operations. The firm should consider factors 

such as business activities; banking group 

structures and booking models and practices; 

and potential sales, transfers, or wind-downs 

during resolution. The Plan should describe 

how the firm’s U.S. legal entity structure 

aligns core business lines and any identified 

critical operations with the firm’s material 

entities to support the firm’s U.S. resolution 

strategy. To the extent a material entity IDI 

relies upon an affiliate that is not the IDI’s 

subsidiary during resolution of its U.S. 

entities, including for the provision of shared 

services, the firm should discuss its rationale 

for the legal entity structure and associated 

resolution risks and potential mitigants. 

The firm’s corporate structure and 

arrangements among U.S. legal entities 

should be considered and maintained in a 

way that facilitates the firm’s resolvability as 

its activities, technology, business models, or 

geographic footprint change over time. 

Separability 

U.S. SPOE 

Separability. The firm should identify 

discrete U.S. operations that could be sold or 

transferred in resolution, with the objective 

of providing optionality in resolution under 

different market conditions. 

A firm’s separability options should be 

actionable, and impediments to their 

projected mitigation strategies should be 

identified in advance. Firms should consider 

potential consequences for U.S. financial 

stability of executing each option, taking into 

consideration impacts on counterparties, 

creditors, clients, depositors, and markets for 

specific assets. The level of detail and 

analysis should vary based on a firm’s risk 

profile and scope of operations. Additionally, 

information systems should be robust enough 

to produce the required data and information 

needed to execute separability options. 

Further, the firm should have, and be able 

to demonstrate, the capability to populate in 

a timely manner a data room with 

information pertinent to a potential 

divestiture of the identified separability 

options (including, but not limited to, carveout financial statements, valuation analysis, 

and a legal risk assessment). Within the Plan, 

the firm should demonstrate how the firm’s 

LER Criteria and implementation efforts 

support meeting the separability-related 

guidance above. The Plan should also 

provide the separability analysis noted 

above. Finally, the Plan should include a 

description of the firm’s legal entity 

rationalization governance process. 

U.S. MPOE 

A Plan should include options for the sale, 

transfer, or disposal of U.S. significant assets, 

portfolios, legal entities, or business lines in 

resolution that may be executed in a 

reasonable period of time. For each option, 

supporting analysis should include: an 

execution plan that includes an estimated 

time frame for implementation, a description 

of any impediments to execution of the 

option, and mitigation strategies to address 

those impediments; a description of the 

assumptions underpinning the option; a 

financial impact assessment that describes 

the impact of executing the option; and an 

identified critical operation impact 

assessment that describes how execution of 

the option may affect the provision of any 


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34See 12 U.S.C. 1823(c)(4)(A)(ii) and 12 U.S.C. 

1821(n)(2)(A). 

35See 12 U.S.C. 1821(d)(11). 

36 12 CFR 243.4(a)(4)(ii) and 12 CFR 

381.4(a)(4)(ii). 

37See Section 11(c)(5) of the FDI Act, codified at 

11 U.S.C. 1821(c)(5), which details grounds for 

appointing the FDIC as conservator or receiver of 

an IDI. 

identified critical operation. Information 

systems should be robust enough to produce 

the required data and information needed to 

execute the options. 

IX. Insured Depository Institution (IDI) 

Resolution 

MPOE 

If the Plan includes a strategy that 

contemplates the separate resolution of a U.S. 

IDI that is a material entity, the Plan should 

demonstrate how this could be achieved in 

a manner that is consistent with the overall 

objective of the Plan to substantially mitigate 

the risk that the failure of the specified firm 

would have serious adverse effects on 

financial stability in the United States while 

also complying with the statutory and 

regulatory requirements governing IDI 

resolution. More specifically, 

• If the strategy is other than payout 

liquidation (e.g., a bridge depository 

institution (BDI)), the Plan should provide 

information supporting the feasibility of this 

strategy. Under the FDI Act, the FDIC 

generally would complete a least-cost 

analysis when resolving a failed bank at the 

time of entry into resolution. A Plan may use 

an approach such as one of the following in 

lieu of performing a complete least-cost 

analysis to demonstrate the feasibility of the 

proposed strategy.34

Æ A Plan may demonstrate that a strategy 

involving an all-deposit BDI would be 

permissible under the least-cost test of the 

FDI Act by presenting an analysis which 

shows that the strategy results in no loss to 

the Deposit Insurance Fund (DIF) by 

demonstrating that the incremental estimated 

cost to the DIF by having the BDI assume all 

uninsured deposits is offset by the 

preservation of franchise value connected to 

the uninsured deposits after accounting for 

the amount of any loss-absorbing debt 

instruments and other liabilities subordinate 

to the depositor class that would be left 

behind in the receivership. 

Æ A Plan may demonstrate the feasibility 

of a strategy involving a BDI that assumes all 

insured deposits and a portion of uninsured 

deposits by providing an advance dividend 

to uninsured depositors for a portion of their 

deposit claim, as well as the basis for that 

dividend, and pursuant to which a loss to the 

DIF occurs, by presenting an analysis 

comparing the cost of the proposed strategy 

to the cost of payout liquidation and 

demonstrating: 

D The incremental estimated cost to the 

DIF created by the BDI’s assumption of the 

portion of uninsured deposits assumed is 

offset by the franchise value preserved by 

maintaining the assumed uninsured deposits, 

after accounting for the amount of any longterm debt and other liabilities subordinate to 

the depositor class that would be left behind 

in the receivership; 35

D The loss to the DIF under the proposed 

strategy (including the amounts paid by the 

DIF for more favorable treatment, relative to 

a payout liquidation, of a portion of 

uninsured deposits) is less than or equal to 

the loss to the DIF that would be incurred 

through a payout liquidation of the IDI; and 

Æ The deposit payout process for any 

uninsured deposits that remain in the 

receivership may be executed in a manner 

that substantially mitigates the risk of serious 

adverse effects on U.S. financial stability. 

• If the Plan’s strategy envisions a payout 

liquidation for the IDI, with or without use 

of a Deposit Insurance National Bank or a 

paying agent, the Plan should demonstrate 

how the deposit payout and asset liquidation 

process would be executed in a manner that 

substantially mitigates the risk of serious 

adverse effects on U.S. financial stability. 

• In all cases, the Plan should show that 

implementation of the resolution, including 

the impact on depositors whose accounts are 

not transferred in whole or in part to the BDI, 

would not create the risk of serious adverse 

effects on U.S. financial stability. 

Regardless of the IDI resolution strategy 

chosen, the Plan should assume asset 

valuations consistent with the severely 

adverse stress economic scenario and the 

IDI’s condition as a failed institution, as 

referenced in ‘‘Guidance regarding 

Assumptions,’’ Items 4 and 7 below. The 

Plan, in light of such conditions, should 

explain the process for determining asset or 

business franchise values, including 

providing detailed supporting descriptions 

such as references to historical pricing, 

benchmarks, or recognized models; evidence 

supporting client attrition rates; and other 

relevant information. 

With respect to exit from IDI resolution 

proceedings, a Plan could support the 

feasibility of an asset liquidation or BDI exit 

strategy by, for example, describing an 

actionable process, based on historical 

precedent or otherwise supportable 

projections, that winds down certain 

businesses, includes the sale of assets and 

deposits to multiple acquirers, or culminates 

in a capital markets transaction, such as an 

initial public offering or a private placement 

of securities. 

X. Format and Structure of Plans; 

Assumptions 

U.S. SPOE & U.S. MPOE 

Format of Plan 

Executive Summary. The Plan should 

contain an executive summary consistent 

with the Rule, which must include, among 

other things, a concise description of the key 

elements of the firm’s strategy for an orderly 

resolution. In addition, the executive 

summary should include a discussion of the 

firm’s assessment of any impediments to the 

firm’s U.S. resolution strategy and its 

execution, as well as the steps it has taken 

to address any identified impediments. 

Narrative. The Plan should include a 

strategic analysis consistent with the Rule. 

This analysis should take the form of a 

concise narrative that enhances the 

readability and understanding of the firm’s 

discussion of its strategy for an orderly 

resolution in bankruptcy or other applicable 

insolvency regimes (Narrative). 

Appendices. The Plan should contain a 

sufficient level of detail and analysis to 

substantiate and support the strategy 

described in the Narrative. Such detail and 

analysis should be included in appendices 

that are distinct from and clearly referenced 

in the related parts of the Narrative 

(Appendices). 

Public Section. The Plan must be divided 

into a public section and a confidential 

section consistent with the requirements of 

the Rule. 

Other Informational Requirements. The 

Plan must comply with all other 

informational requirements of the Rule. The 

firm may incorporate by reference previously 

submitted information as provided in the 

Rule. 

Guidance Regarding Assumptions. 

1. The Plan should be based on the current 

state of the applicable legal and policy 

frameworks. Pending legislation or regulatory 

actions may be discussed as additional 

considerations. 

2. The firm must submit a Plan that does 

not rely on the provision of extraordinary 

support by the United States or any other 

government to the firm or its subsidiaries to 

prevent the failure of the firm.36 The firm 

should not submit a Plan that assumes the 

use of the systemic risk exception to the 

least-cost test in the event of a failure of an 

IDI requiring resolution under the FDI Act. 

3. The firm should not assume that it will 

be able to sell identified critical operations or 

core business lines, or that unsecured 

funding will be available immediately prior 

to filing for bankruptcy. 

4. The U.S. resolution strategy may be 

based on an idiosyncratic event or action, 

including a series of compounding events. 

The firm should justify use of that 

assumption, consistent with the conditions of 

the economic scenario. 

5. Within the context of the applicable 

idiosyncratic scenario, markets are 

functioning and competitors are in a position 

to take on business. If a firm’s Plan assumes 

the sale of assets, the firm should take into 

account all issues surrounding its ability to 

sell in market conditions present in the 

applicable economic condition at the time of 

sale (i.e., the firm should take into 

consideration the size and scale of its 

operations as well as issues of separation and 

transfer). 

6. For a firm that adopts a U.S. MPOE 

strategy, the Plan should demonstrate and 

describe how the failure event(s) results in 

material financial distress of the U.S. 

operations.37 In particular, the Plan should 

consider the likelihood that there would be 

a diminution of the firm’s liquidity buffer in 

the stress period prior to filing for 

bankruptcy from high unexpected outflows 

of deposits and increased liquidity 

requirements from counterparties. Though 

the immediate failure event may be liquidityrelated and associated with a lack of market 

confidence in the financial condition of the 

covered company or its material legal entity 

subsidiaries prior to the final recognition of 

losses, the demonstration and description of 


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64658 Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / Notices 

material financial distress may also include 

depletion of capital. Therefore, the Plan 

should also consider the likelihood of the 

depletion of capital. 

7. The firm should not assume any waivers 

of section 23A or 23B of the Federal Reserve 

Act in connection with the actions proposed 

to be taken prior to or in resolution. 

8. The Plan should support any 

assumptions that the firm will have access to 

the Discount Window and/or other 

borrowings during the period immediately 

prior to entering bankruptcy. To the extent 

the firm assumes use of the Discount 

Window and/or other borrowings, the Plan 

should support that assumption with a 

discussion of the operational testing 

conducted to facilitate access in a stress 

environment, placement of collateral and the 

amount of funding accessible to the firm. The 

firm may assume that its depository 

institutions will have access to the Discount 

Window only for a few days after the point 

of failure to facilitate orderly resolution. 

However, the firm should not assume its 

subsidiary depository institutions will have 

access to the Discount Window while 

critically undercapitalized, in FDIC 

receivership, or operating as a bridge bank, 

nor should it assume any lending from a 

Federal Reserve credit facility to a non-bank 

affiliate. 

Financial Statements and Projections. The 

Plan should include the actual balance sheet 

for each material entity and the consolidating 

balance sheet adjustments between material 

entities as well as pro forma balance sheets 

for each material entity at the point of failure 

and at key junctures in the execution of the 

U.S. resolution strategy. It should also 

include statements of projected sources and 

uses of funds for the interim periods. The pro 

forma financial statements and 

accompanying notes in the Plan must clearly 

evidence the failure trigger event; the Plan’s 

assumptions; and any transactions that are 

critical to the execution of the Plan’s 

preferred strategy, such as recapitalizations, 

the creation of new legal entities, transfers of 

assets, and asset sales and unwinds. 

Material Entities. Material entities should 

encompass those entities, including foreign 

offices and branches, which are significant to 

the maintenance of an identified critical 

operation or core business line. If the abrupt 

disruption or cessation of a core business line 

might have systemic consequences to U.S. 

financial stability, the entities essential to the 

continuation of such core business line 

should be considered for material entity 

designation. Material entities should include 

the following types of entities: 

1. Any U.S.-based or non-U.S. affiliates, 

including any branches, that are significant 

to the activities of an identified critical 

operation conducted in whole or material 

part in the United States. 

2. Subsidiaries or foreign offices whose 

provision or support of global treasury 

operations, funding, or liquidity activities 

(inclusive of intercompany transactions) is 

significant to the activities of an identified 

critical operation. 

3. Subsidiaries or foreign offices that 

provide material operational support in 

resolution (key personnel, information 

technology, data centers, real estate or other 

shared services) to the activities of an 

identified critical operation. 

4. Subsidiaries or foreign offices that are 

engaged in derivatives booking activity that 

is significant to the activities of an identified 

critical operation, including those that 

conduct either the internal hedge side or the 

client-facing side of a transaction. 

5. Subsidiaries or foreign offices engaged in 

asset custody or asset management that are 

significant to the activities of an identified 

critical operation. 

6. Subsidiaries or foreign offices holding 

licenses or memberships in clearinghouses, 

exchanges, or other FMUs that are significant 

to the activities of an identified critical 

operation. 

7. For each material entity (including a 

branch), the Plan should enumerate, on a 

jurisdiction-by-jurisdiction basis, the specific 

mandatory and discretionary actions or 

forbearances that regulatory and resolution 

authorities would take during resolution, 

including any regulatory filings and 

notifications that would be required as part 

of the preferred strategy, and explain how the 

Plan addresses the actions and forbearances. 

Describe the consequences for the covered 

company’s U.S. resolution strategy if specific 

actions in a non-U.S. jurisdiction were not 

taken, delayed, or forgone, as relevant. 

XI. Public Section 

U.S. SPOE & U.S. MPOE 

The purpose of the public section is to 

inform the public’s understanding of the 

firm’s U.S. resolution strategy and how it 

works. 

The public section should discuss the steps 

that the firm is taking to improve 

resolvability under the U.S. Bankruptcy 

Code. The public section should provide 

background information on each material 

entity and should be enhanced by including 

the firm’s rationale for designating material 

entities. The public section should also 

discuss, at a high level, the firm’s intra-group 

financial and operational interconnectedness 

(including the types of guarantees or support 

obligations in place that could impact the 

execution of the firm’s strategy). 

The discussion of strategy in the public 

section should broadly explain how the firm 

has addressed any deficiencies, 

shortcomings, and other key vulnerabilities 

that the agencies have identified in prior plan 

submissions. For each material entity, it 

should be clear how the strategy provides for 

continuity, transfer, or orderly wind-down of 

the entity and its operations. There should 

also be a description of the resulting 

organization upon completion of the 

resolution process. 

The public section may note that the Plan 

is not binding on a bankruptcy court or other 

resolution authority and that the proposed 

failure scenario and associated assumptions 

are hypothetical and do not necessarily 

reflect an event or events to which the firm 

is or may become subject. 

By order of the Board of Governors of the 

Federal Reserve System. 

Ann E. Misback, 

Secretary of the Board. 

Federal Deposit Insurance Corporation. 

By order of the Board of Directors. 

Dated at Washington, DC, on August 29, 

2023. 

James P. Sheesley, 

Assistant Executive Secretary. 

[FR Doc. 2023–19268 Filed 9–18–23; 8:45 am] 

BILLING CODE 6210–01–6714–01–P 


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