Friday, September 30, 2011
The federal financial services regulators have approved a new final living will rule that will implement Section 165(d) of the Dodd-Frank Street Reform and Consumer Protection Act. The Federal Reserve Board and the FDIC will issue the rule jointly.
Section 165(d) requires companies designated as systemically significant by the Financial Stability Oversight Counsel to give regularly updated living wills or plans for the companies’ “rapid and orderly resolution in the event of material financial distress or failure” to the Federal Reserve Board and the FDIC. Under the new law, a company’s resolution plan must include a strategic analyses of the plan’s components; an analyses of the company’s organization, material entities, management information systems, interconnections and interdependencies; and a description of the range of specific actions to be taken in the resolution.
Companies operating mainly as banks must submit plans before December 31, 2013 and update their living wills annually.
See Allison Bell, Feds to Big Nonbanks: So, What if You Die?, National Underwriter, Sept. 9, 2011.
Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.