In January, the US Secretary of Treasury issued a proposed rule that would establish new recordkeeping requirements for Qualified Financial Contracts (“QFCs”). US systemically important financial institutions (and many of their affiliates) will be required under the proposed rule to maintain specific information electronically on end-of-day QFC positions, and to be able to provide this information to regulators within 24 hours if requested.
This is a significant expansion in both scope and detail from current QFC recordkeeping requirements, which now apply only to certain "troubled" insured depository institutions designated by the FDIC. As a practical matter, to be of meaningful assistance to the FDIC and meet the proposed rule’s requirements, we believe impacted entities will have to have the ability to report this information on a daily basis.
This Regulatory brief provides our analysis of the proposed rule and its key challenges, and our view of what institutions should be doing now.