Gain insight into the definitions, provisions, and eligibility tests of the bilateral netting provisions of FDICIA and Regulation EE.
Financial contracts often contain provisions that facilitate netting of various payment obligations and entitlements. This netting is important to both credit risk assessments and regulatory capital calibrations. Many counterparties are subject to insolvency regimes that provide special protections to these netting arrangements. However, in some cases, a counterparty may not be eligible for such a regime. The netting provisions of FDICIA may provide certainty that netting rights against these counterparties will be enforced. This presentation will help individuals responsible for assessing the risks associated with various financial contracts assess when FDICIA may apply to protect netting rights. The presentation will explain the definitions and provisions of the bilateral netting provisions of FDICIA and Regulation EE, as well as the two primary tests the Federal Reserve Board of Governors has developed to determine eligibility under FDICIA. This topic is critical for financial institutions to ensure their netting rights are protected during insolvency proceedings.
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Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Agenda
FDICIA Background
- FDICIA's Enactment
- Sections 401-407 of FDICIA
- Netting Provisions
- FDICIA Provides Certainty to Financial Institutions With Netting Agreements That May Not Be Covered by Safe Harbors Under Other Regimes, Such as the Bankruptcy Code
Key Definitions Under FDICIA
- Review Definitions of Covered Contractual Payment Entitlement, Covered Contractual Payment Obligation, Payment, and Failed Financial Institution
- FDICIA's Netting Protections Are Applicable to 'Netting Contracts'
- FDICIA's Protection Is Only Available If Both Parties to a Particular Agreement Are 'Financial Institutions'
Regulation EE
- Implements the Board's Authority to Designate Certain Institutions as Financial Institutions for the Purpose of FDICIA
- Two-Part Activities-Based Test
- The Qualitative Prong
- The Quantitative Prong
- Regulation EE's Definition of Financial Contract
- The Amendment of Regulation EE in 2021
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Credits
OnDemand Course
This course was last revised on June 27, 2023.
Call 1-866-352-9540 for further credit information.
- AK CLE 0.5
- Alaska attorneys may receive 0.5 hours of continuing legal education for completing this program. Please contact the Alaska Bar Association or go to www.alaskabar.org for details regarding reciprocity with other states.
- AL CLE 0.6
- This course or a portion thereof has been approved by the Alabama State Mandatory Continuing Legal Education Commission for a maximum of 0.6 hours credit.
- Arizona CLE 0.5
- The Arizona State Bar does not pre-approve or pre-certify MCLE programs. However, records of this program and attendance will be maintained by Lorman Education Services for auditing purposes. This activity may qualify for up to 0.5 hours toward your annual CLE requirement for the State Bar of Arizona.
- CA MCLE 0.5
- Lorman Education Services is a State Bar of California approved MCLE sponsor and this course qualifies for 0.5 CLE hours of participatory credit.
- CT CLE 0.5
- Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. This course has been approved for CLE credit in jurisdictions aside from CT and therefore it automatically meets the content and delivery requirements in Connecticut. Credit is based on a 60 minute credit hour and shall be awarded as follows: 0.5 CLE credit(s).
- IL CLE 0.5
- This course was approved for a total of 0.5 hours of MCLE Credit by the Illinois MCLE Board.
- ND CLE 0.5
- North Dakota CLE policy does not allow for pre-approval of any self-study courses. This course may qualify for up to 0.5 hours of CLE credit.
- NH MCLE 0.5
- NH MCLE does not approve or accredit CLE activities for the NH Minimum CLE requirement. Lorman Education Services believes this Ondemand course meets the requirement of NH Supreme Court Rule 53 and may qualify for CLE credit(s). Program Length: 34 Minutes.
- NV CLE 0.5
- This program has been approved by the Nevada Board of Continuing Legal Education for 0.5 CLE hours.
- RI CLE 0.5
- This program has been approved by the Rhode Island Mandatory Continuing Legal Education Commission for 0.5 hours of CLE credit.
To earn each credit Lorman offers through the OnDemand learning platform, you need to watch 100% of the program. Also, for certain credits you will need to fulfill additional requirements which will be displayed on the "credits" tab when viewing the course.
This program does NOT qualify, nor meet the National Standard for NASBA accreditation.
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Faculty
Brandon M. Hammer
Cleary Gottlieb Steen & Hamilton LLP
Brandon Hammer
- Counsel at Cleary Gottlieb
- Practice focuses on a broad range of creditors’ rights, netting, financial regulatory, bankruptcy, digital asset, and market infrastructure issues
- Clients include financial institutions, clearinghouses, sovereigns, and end users. Frequently counsels leading financial market trade associations and ad hoc coalitions on major industry initiatives and industry-standard opinions
- Advised clients regarding close-out netting rights under a variety of different U.S. insolvency regimes, including the Bankruptcy Code, the Federal Deposit Insurance Act, the Securities Investor Protection Act, the New York Banking Law, and the Orderly Liquidation Authority title of the Dodd-Frank Act, and represents clients before federal regulatory agencies and self-regulatory organizations
- Past and current engagements include representing a large investment bank in connection with the default of Archegos Capital Management, advising Goldman Sachs, Morgan Stanley, Nomura, and other financial institutions in connection with the close-out of derivatives, repos, and other financial transactions, and working with Coinbase on structuring its digital asset custody arrangement to facilitate bankruptcy remoteness analyses
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
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