On October 31st, the US Treasury finalized its long awaited rule governing Qualified Financial Contracts (QFCs) recordkeeping. The final rule requires most systemically important US financial institutions and Intermediate Holding Companies of foreign banks (collectively, SIFIs), including many of their non-bank affiliates, to maintain standardized information related to their end-of-day QFC positions. This information includes the counterparty, collateral, and legal documentation related to the QFC, and it must be made available to the FDIC and the SIFI’s primary regulator within 24 hours of being requested (and be current as of the day requested).
1. The final rule gives the industry a more realistic timeline.
2. The scope of affected SIFIs and their affiliates is narrowed.
3. QFC documentation is no longer required to be fully searchable.
4. Records must be maintained for more types of QFCs than the industry hoped.
5. Relief with respect to counterparties’ entity identifiers.