June 29, 2020

Ms. Rebecca J. Simmons

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

Dear Ms. Simmons:

This responds to the correspondence dated June 23, 2020, submitted on behalf of 

Citigroup Inc., New York, New York, addressed to the Office of the Comptroller of the Currency 

(“OCC”), the Board of Governors of the Federal Reserve System (“Board”), and the Federal 

Deposit Insurance Corporation (“FDIC”) (collectively, the “Agencies”) regarding your request 

for an exemption under each of the Agencies’ respective qualified financial contract stay rules 

(collectively, the “QFC Stay Rules”) for certain contracts.

1

 Specifically, you have requested an 

exemption from the requirements of 12 CFR 252.83 and 252.84 for any covered QFC that is a 

custody services contract subject to the requirements of the Board’s QFC Stay Rule solely due to 

the exercise of any settlement advances permitted under such contract and for which each party 

to the covered QFC (other than the covered entity) is a counterparty that is not a covered entity 

or excluded bank (the “Relief Request QFCs”).2 Your correspondence also requested an 

extension of time to conform the Relief Request QFCs to the requirements of the QFC Stay 

Rules until the Agencies determine whether the requested relief is appropriate under the 

standards set forth in the QFC Stay Rules. 

Acting pursuant to authority delegated by the Board and having considered all 

relevant facts, I grant an extension of time until October 1, 2020. Under this extension of time, 

the previously granted extension of time with respect to the Relief Request QFCs entered into by 

any covered entity that would have been subject to either the July 1, 2019, or January 1, 2020, 

compliance date is extended until October 1, 2020. The Board is taking no action on your 

request for an exemption at this time. Should the Board deny in whole or in part the requested 

exemption for the Relief Request QFCs, staff would recommend that Citigroup be permitted 

 1

 12 CFR part 47 (OCC); 12 CFR part 252, subpart I (Board); and 12 CFR part 382 (FDIC).

2

 Definitions related to the scope of the Relief Request QFCs are set out in the Appendix.
some period from the date of any such denial to conform all affected QFCs to the requirements 

of the Board’s QFC Stay Rule.

Board staff has consulted with staff of the OCC and FDIC with respect to this 

extension of time, and OCC and FDIC staff have advised Board staff that they do not object to 

this extension. 

This action may be revised or revoked based on changes to applicable regulations 

or other relevant factors. This action is based on all the facts of record, including the information 

discussed above, and the representations in your submissions and supplemental information. 

Any material change in those facts or representations could affect this approval and should be 

communicated promptly to Board staff.

Please contact Lucy Chang at (202) 475-6331 or Evan Hechtman at (202) 263-

4810, both of the Board’s Legal Division, or Lesley Chao at (202) 974-7063 or Rebecca Alper at 

(202) 475-6321, both of the Board’s Division of Supervision and Regulation, if you have any 

questions.

Very truly yours,

 (Signed Ann E. Misback)

Ann E. Misback

Secretary of the Board

cc: Office of the Comptroller of the Currency

Federal Deposit Insurance Corporation

Lauren A. Anderson, The Bank Policy Institute
Appendix

1. For purposes of this extension of time, the following definitions apply:

a. “Affiliate” has the same meaning as in 12 CFR 252.2.

b. “Custody services contract” is defined as a contract that meets all of the 

following:

i. The contract is an agreement under which an applicant or its affiliate 

provides custodial services that include safekeeping, settlement, asset 

servicing, and reporting and income services to clients, and any associated 

short-term settlement advances in connection with the processing of client 

securities or payment transactions; 

ii. The contract does not include any default right that can be exercised 

against a covered entity serving as a custodian or any affiliate of such

covered entity;

iii. The contract is a qualified financial contract subject to the requirements of 

the Board’s QFC Stay Rule solely due to the exercise of any settlement 

advances permitted under the contract; and

iv. If not for the contract’s provisions prohibiting its assignment without the 

consent of the client, the contract otherwise would meet the requirements 

of 12 CFR 252.84(a).

c. “Default right” has the same meaning as in 12 CFR 252.81.