[Federal Register Volume 83, Number 136 (Monday, July 16, 2018)]
[Notices]
[Pages 32856-32871]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-15066]


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FEDERAL RESERVE SYSTEM

[Docket No. OP-1614]

FEDERAL DEPOSIT INSURANCE CORPORATION


Resolution Planning Guidance for Eight Large, Complex U.S. 
Banking Organizations

AGENCY: Board of Governors of the Federal Reserve System (Board) and 
Federal Deposit Insurance Corporation (FDIC).

ACTION: Proposed guidance; request for comments.

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SUMMARY: The Board and the FDIC (together, the ``Agencies'') are 
inviting comments on proposed guidance for the 2019 and subsequent 
resolution plan submissions by the eight largest, complex U.S. banking 
organizations (``Covered Companies'' or ``firms''). The proposed 
guidance is meant to assist these firms in developing their resolution 
plans, which are required to be submitted pursuant to Section 165(d) of 
the Dodd-Frank Wall Street Reform and Consumer Protection Act. The 
proposed guidance, which is largely based on prior guidance issued to 
these Covered Companies, describes the Agencies' expectations regarding 
a number of key vulnerabilities in plans for an orderly resolution 
under the U.S. Bankruptcy Code (i.e., capital; liquidity; governance 
mechanisms; operational; legal entity rationalization and separability; 
and derivatives and trading activities). The proposed guidance also 
updates certain aspects of prior guidance based on the Agencies' review 
of these firms' recent resolution plan submissions. The Agencies invite 
public comment on all aspects of the proposed guidance.

DATES: Comments should be received September 14, 2018.

ADDRESSES: Interested parties are encouraged to submit written comments 
jointly to both Agencies. Comments should be directed to: Board: You 
may submit comments, identified by Docket No. OP-1614, by any of the 
following methods:
     Agency Website: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Email: [email protected]. Include docket 
number in the subject line of the message.
     Fax: (202) 452-3819 or (202) 452-3102.
     Mail: Ann E. Misback, Secretary, Board of Governors of the 
Federal Reserve System, 20th Street and Constitution Avenue NW, 
Washington, DC 20551.
    All public comments will be made available on the Board's website 
at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfms 
submitted, unless modified for technical reasons or to remove personal 
information at the commenter's request. Accordingly, comments will not 
be edited to remove any identifying or contact information. Public 
comments may also be viewed electronically or in paper in Room 3515, 
1801 K Street NW (between 18th and 19th Street NW), between 9:00 a.m. 
and 5:00 p.m. on weekdays.
    FDIC: You may submit comments by any of the following methods:
     Agency Website: https://www.fdic.gov/regulations/laws/federal. Follow the instructions for submitting comments on the Agency 
Website.
     Email: [email protected]. Include ``Proposed 165(d) 
Guidance for the Domestic Firms'' on the subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments, Federal Deposit Insurance Corporation, 550 17th Street NW, 
Washington, DC 20429.
     Hand Delivery/Courier: Guard station at the rear of the 
550 17th Street Building (located on F Street) on business days between 
7 a.m. and 5 p.m.
     Public Inspection: All comments received, including any 
personal information provided, will be posted generally without change 
to https://www.fdic.gov/regulations/laws/federal.

FOR FURTHER INFORMATION CONTACT: 
    Board: Michael Hsu, Associate Director, (202) 452-4330, Division of 
Supervision and Regulation, Jay Schwarz, Senior Counsel, (202) 452-
2970, Will Giles, Senior Counsel, (202) 452-3351, or Steve Bowne, 
Senior Attorney, (202) 452-3900, Legal Division. Users of 
Telecommunications Device for the Deaf (TDD) may call (202) 263-4869.
    FDIC: Mike J. Morgan, Corporate Expert, [email protected], CFI 
Oversight Branch, Division of Risk Management Supervision; Alexandra 
Steinberg Barrage, Associate Director, Resolution Strategy and Policy, 
Office of Complex Financial Institutions, [email protected]; David N. 
Wall, Assistant General Counsel, [email protected]; Pauline E. Calande, 
Senior Counsel, [email protected]; or Celia Van Gorder, Supervisory 
Counsel, [email protected], Legal Division, Federal Deposit Insurance 
Corporation, 550 17th Street NW, Washington, DC 20429.

[[Page 32857]]


SUPPLEMENTARY INFORMATION:

I. Background

    Section 165(d) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (12 U.S.C. 5365(d)) and the jointly issued implementing 
regulation, 12 CFR part 243 and 12 CFR part 381 (``the Rule''), 
requires certain financial companies to report periodically to the 
Board and the FDIC their plans for rapid and orderly resolution under 
the U.S. Bankruptcy Code in the event of material financial distress or 
failure.
    Among other requirements, the Rule requires each financial 
company's resolution plan to include a strategic analysis of the plan's 
components, a description of the range of specific actions the company 
proposes to take in resolution, and a description of the company's 
organizational structure, material entities and interconnections and 
interdependencies. The Rule also requires that resolution plans include 
a confidential section that contains confidential supervisory and 
proprietary information submitted to the Board and the FDIC (together, 
the ``Agencies''), and a section that the Agencies make available to 
the public. Public sections of resolution plans can be found on the 
Agencies' websites.\1\
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    \1\ See the public sections of resolution plans submitted to the 
Agencies at www.federalreserve.gov/bankinforeg/resolutionplans.htm 
and www.fdic.gov/regulations/reform/resplans/.
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Objectives of the Resolution Planning Process

    The goal of the Dodd-Frank Act resolution planning process is to 
help ensure that a firm's failure would not have serious adverse 
effects on financial stability in the United States. Specifically, the 
resolution planning process requires firms to demonstrate that they 
have adequately assessed the challenges that their structure and 
business activities pose to resolution and that they have taken action 
to address those issues. Management should also consider resolvability 
as part of day-to-day decision making, particularly those related to 
structure, business activities, capital and liquidity allocation, and 
governance. In addition, firms are expected to maintain a meaningful 
set of options for selling operations and business lines to generate 
resources and to allow for restructuring under stress, including 
through the sale or wind down of discrete businesses that could further 
minimize the direct impact of distress or failure on the broader 
financial system. While these measures cannot guarantee that a firm's 
resolution would be simple or smoothly executed, these preparations can 
help ensure that the firm could be resolved under bankruptcy without 
government support or imperiling the broader financial system.
    The Rule describes an iterative process aimed at strengthening the 
resolution planning capabilities of each financial institution. With 
respect to the eight largest, complex U.S. banking organizations 
(``Covered Companies'' or ``firms''),\2\ the Agencies have previously 
provided guidance and other feedback.\3\ In general, the feedback was 
intended to assist firms in their development of future resolution plan 
submissions and to provide additional clarity with respect to the 
expectations against which the Agencies will evaluate the resolution 
plan submissions. The Agencies are now proposing to update aspects of 
prior guidance based on the Agencies' review of the firms' recent 
resolution plan submissions.\4\ The Agencies reviewed the 2017 Plans 
and issued a letter to each firm indicating that it had taken important 
steps to enhance its resolvability and facilitate its orderly 
resolution in bankruptcy.\5\ As a result of those reviews and following 
the Agencies' joint decisions in December 2017, the Agencies identified 
four areas where more work may need to be done to improve the 
resolvability of the firms.\6\ As described below, the Agencies are 
proposing updates to two areas of the guidance regarding payment, 
clearing, and settlement services and derivatives and trading 
activities. The Agencies intend to provide additional information on 
the two other areas: Intra-group liquidity and internal loss absorbing 
capacity. The Agencies invite public comment on all aspects of the 
proposed guidance.
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    \2\ Bank of America Corporation, The Bank of New York Mellon 
Corporation, Citigroup Inc., the Goldman Sachs Group, Inc., JPMorgan 
Chase & Co., Morgan Stanley, State Street Corporation and Wells 
Fargo & Company.
    \3\ This includes Guidance for 2013 Sec.  165(d) Annual 
Resolution Plan Submissions by Domestic Covered Companies that 
Submitted Initial Resolution Plans in 2012; detailed guidance and 
firm-specific feedback in August 2014 and February 2015 for the 
development of firms' 2015 resolution plan submissions; and Guidance 
for 2017 Sec.  165(d) Annual Resolution Plan Submissions by Domestic 
Covered Companies that Submitted Resolution Plans in July 2015, 
including the frequently asked questions that were published in 
response to the Guidance for the 2017 Plan Submissions (taken 
together, ``prior guidance'').
    \4\ Each firm's resolution strategy is designed to have the 
parent company recapitalize and provide liquidity resources to its 
material entity subsidiaries prior to entering bankruptcy 
proceedings. This strategy calls for material entities to be 
provided with sufficient capital and liquidity resources to allow 
them to avoid multiple competing insolvencies and maintain 
continuity of operations throughout resolution.
    \5\ See Letters dated December 19, 2017, from the Board and FDIC 
to Bank of America Corporation, The Bank of New York Mellon 
Corporation, Citigroup Inc., the Goldman Sachs Group, Inc., JPMorgan 
Chase & Co., Morgan Stanley, State Street Corporation and Wells 
Fargo & Company, available at https://www.federalreserve.gov/supervisionreg/resolution-plans.htm.
    \6\ Id.
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II. Overview of the Proposed Guidance

    The proposed guidance is organized into six substantive areas, 
consistent with the guidance the Agencies provided to Covered Companies 
in April 2016 to assist in the development of their 2017 resolution 
plans, Guidance for 2017 Sec.  165(d) Annual Resolution Plan 
Submissions by Domestic Covered Companies that Submitted Resolution 
Plans in July 2015 (``2016 Guidance'').\7\ These areas are:
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    \7\ Available at: https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20160413a1.pdf and at https://www.fdic.gov/news/news/press/2016/pr16031b.pdf.

1. Capital
2. Liquidity
3. Governance mechanisms
4. Operational
5. Legal entity rationalization and separability
6. Derivatives and trading activities

    Each area is important to firms in resolution as each plays a part 
in helping to ensure that the firm can be resolved in an orderly 
manner. The guidance would describe the Agencies' expectations for each 
of these areas.
    The proposed guidance is largely consistent with the 2016 Guidance, 
which the Covered Companies used to develop their 2017 resolution plan 
submissions. Accordingly, the firms have already incorporated 
significant aspects of the proposed guidance into their resolution 
planning. The proposal would update the derivatives and trading 
activities (DER), and payment, clearing, and settlement activities 
(PCS) areas of the 2016 Guidance based on the Agencies' review of the 
Covered Companies' 2017 plans. It would also make minor clarifications 
to certain areas of the 2016 Guidance. In general, the proposed 
revisions to the guidance are intended to streamline the firms' 
submissions and to provide additional clarity. The proposed guidance is 
not meant to limit firms' consideration of additional vulnerabilities 
or obstacles that might arise based on a firm's particular structure, 
operations, or resolution strategy and that should be factored into the 
firm's submission.
    Capital: The ability to provide sufficient capital to material 
entities without disruption from creditors is

[[Page 32858]]

important in order to ensure that material entities can continue to 
provide critical services and maintain critical operations as the firm 
is resolved. The proposal describes expectations concerning the 
appropriate positioning of capital and other loss-absorbing instruments 
(e.g., debt that the parent may forgive or convert to equity) among the 
material entities within the firm (resolution capital adequacy and 
positioning or RCAP). The proposal also describes expectations 
regarding a methodology for periodically estimating the amount of 
capital that may be needed to support each material entity after the 
bankruptcy filing (resolution capital execution need or RCEN).
    Liquidity: A firm's ability to reliably estimate and meet its 
liquidity needs prior to, and in, resolution is important to the 
execution of a Covered Company's resolution strategy in that it enables 
the firm to respond quickly to demands from stakeholders and 
counterparties, including regulatory authorities in other jurisdictions 
and financial market utilities. Maintaining sufficient and 
appropriately-positioned liquidity also allows the subsidiaries to 
continue to operate while the firm is being resolved in accordance with 
the firm's preferred resolution strategy.\8\
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    \8\ The Agencies are currently taking steps to better understand 
the purpose and treatment of the firms' inter-affiliate 
transactions. The Agencies do not expect the firms to make major 
changes to their RLAP and RLEN models until after the Agencies have 
completed this review and provided further feedback.
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    Governance Mechanisms: An adequate governance structure with 
triggers capable of identifying the onset of financial stress events is 
important to ensure that there is sufficient time to allow firms to 
prepare for resolution, and to ensure the timely execution of their 
preferred resolution strategies. The governance mechanism section 
proposes expectations that firms have playbooks that detail the board 
and senior management actions necessary to execute the firm's preferred 
strategy. In addition, the proposal describes expectations that firms 
have triggers that are linked to specific actions outlined in these 
playbooks to ensure the timely escalation of information to senior 
management and the board, to address the successful recapitalization of 
subsidiaries prior to the parent's bankruptcy to the extent called for 
by the firm's preferred resolution strategy, and to address how the 
firm would ensure the timely execution of a bankruptcy filing. The 
proposal also describes the expectations that firms identify and 
analyze potential legal challenges to the provision of capital and 
liquidity to subsidiaries that would precede the parent's bankruptcy 
filing, and any defenses and mitigants to such challenges. In addition, 
the proposal describes expectations that firms incorporate any 
developments from this analysis in their governance playbooks.
    Legal entity rationalization and separability: It is important that 
firms maintain a structure that facilitates orderly resolution. To 
achieve this, the proposal states that a firm should develop criteria 
supporting the preferred resolution strategy and integrate them into 
day-to-day decision making processes. The criteria would be expected to 
consider the best alignment of legal entities and business lines and 
facilitate resolvability as a firm's activities, technology, business 
models, or geographic footprint change over time. In addition, the 
proposed guidance provides that the firm should identify discrete and 
actionable operations that could be sold or transferred in resolution 
to provide meaningful optionality for the resolution strategy under a 
range of potential failure scenarios.
    Operational: The development and maintenance of operational 
capabilities is important to support and enable execution of a firm's 
preferred resolution strategy, including providing for the continuation 
of critical operations and preventing or mitigating adverse impacts on 
U.S. financial stability. The proposed operational capabilities 
include:
    Possessing fully developed capabilities related to managing, 
identifying, and valuing the collateral that is received from, and 
posted to, external parties and its affiliates;
    Having management information systems that readily produce key data 
on financial resources and positions on a legal entity basis, and that 
ensure data integrity and reliability;
    Developing a clear set of actions to be taken to maintain payment, 
clearing and settlement activities and to maintain access to financial 
market utilities, as further discussed below; and
    Maintaining an actionable plan to ensure the continuity of all of 
the shared and outsourced services that their critical operations rely 
on.
    In addition, the proposed guidance provides that a firm should 
analyze and address legal issues that may arise in connection with 
emergency motions the firm anticipates filing at the outset of its 
bankruptcy case seeking relief needed to pursue its preferred 
resolution strategy, including legal precedent and evidentiary support 
the firm expects to provide in support of such motions, key regulatory 
actions, and contingency arrangements.
    Derivatives and trading activities: It is important that a firm's 
derivatives and trading activities can be stabilized and de-risked 
during resolution without causing significant market disruption. As 
such, firms should have capabilities to identify and mitigate the risks 
associated with their derivatives and trading activities and with the 
implementation of their preferred strategies, as further discussed 
below.
    Question 1: Do the topics in the proposed guidance discussed above 
represent the key vulnerabilities of the Covered Companies in 
resolution? If not, what key vulnerabilities are not captured?

III. Proposed Changes to Prior Guidance

    In addition to making some clarifications, this proposal differs 
from prior guidance in that it reflects enhancements informed by the 
Agencies' review of the Covered Companies 2017 plans in the areas of 
DER and PCS.
    The following description summarizes the changes relative to the 
topics outlined in the 2016 Guidance to which the Agencies are seeking 
comment and, where relevant, provides additional detail:

Operational: Payment, Clearing, and Settlement Activities

    The provision of PCS by firms, financial market utilities (FMUs), 
and agent banks is an essential component of the U.S. financial system, 
and maintaining the continuity of PCS services is important for the 
orderly resolution of firms. Prior guidance from the Agencies indicated 
that a firm's resolution plan submissions should describe arrangements 
to facilitate continued access to PCS services through the firm's 
resolution.
    Based upon recent resolution plan submissions and the Agencies' 
engagement with the firms, the Agencies believe that the firms have 
developed capabilities to identify and consider the risks associated 
with continuity of access to PCS services in resolution. All of the 
firms described methodologies to identify key FMUs and agent banks 
based on quantitative and qualitative criteria and included playbooks 
for identified key FMUs or agent banks. These playbooks described 
potential adverse actions that could be taken by the FMU or agent bank, 
described possible contingency arrangements, and discussed the 
operational and financial impacts of such actions or arrangements, all 
of which were

[[Page 32859]]

enhanced by the firms' direct communications with these FMUs and agent 
banks. The proposed PCS guidance clarifies the expectations of the 
Agencies with respect to a firm's capabilities to maintain continued 
access to PCS services through a framework. Considering the firms' 
earlier resolution plan submissions, the firms have the methodologies 
and capabilities in place to address these expectations.
    Framework. The proposal states that firms should demonstrate 
capabilities for maintaining continued access to PCS services through a 
framework that incorporates the identification of key clients,\9\ FMUs, 
and agent banks, using both quantitative \10\ and qualitative criteria, 
and the development of a playbook for each key FMU and agent bank. The 
proposed guidance builds upon existing guidance by specifying that the 
framework should consider key clients (which may include affiliates of 
the firm) and agent banks. The Agencies note that, although the 
existing guidance did not expressly suggest the identification of key 
agent banks and playbooks for such agent banks, the firms considered 
agent bank relationships and each provided a playbook for at least one 
key agent bank in its most recent resolution plan submission. Because 
agent bank relationships may essentially replicate PCS services 
provided by FMUs, the Agencies propose to revise the PCS guidance to 
include the identification and development of playbooks for key agent 
banks.
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    \9\ A client is an individual or entity, including affiliates of 
the firm, that relies upon continued access to the firm's PCS 
services and any related credit or liquidity offered in connection 
with those services. As a result, key clients may not necessarily be 
limited to wholesale clients.
    \10\ Examples of quantitative criteria include not only the 
aggregate volumes and values of all transactions processed through 
an FMU but also assets under custody with an agent bank, the value 
of cash and securities settled through an agent bank, and extensions 
of intraday credit.
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    In applying the framework, the firm would be expected to consider 
its role as a user and/or a provider of PCS services. The proposal 
refers to a user of PCS services as a firm that accesses the services 
of an FMU through its own membership in that FMU or through the 
membership of another firm that provides PCS services on an agency 
basis. A firm is a provider of PCS services under the proposed guidance 
if it provides its clients with access to an FMU or agent bank through 
the firm's membership in or relationship with that service provider. A 
firm also would be a provider if it delivers PCS services critical to a 
client through the firm's own operations in a manner similar to an FMU.
    The proposal provides that a firm's framework should take into 
account the various relationships the firm and its key clients have 
with those key FMUs and agent banks by providing a mapping of material 
entities, critical operations, core business lines, and key clients to 
key FMUs and agent banks. This framework would be expected to consider 
both direct relationships (e.g., firm's direct membership in the FMU, 
firm provides key clients with critical PCS services through its own 
operations, firm's contractual relationship with an agent bank) and 
indirect relationships (e.g., firm provides its clients with access to 
the relevant FMU or agent bank through the firm's membership in or 
relationship with that FMU or agent bank).
    By developing and evaluating these activities and relationships 
through a framework that incorporates the elements above, a firm should 
be able to consider the issue of maintaining continuity of PCS services 
in a systematic manner.
    Question 2: Is the guidance sufficiently clear with respect to the 
following concepts: Scope of PCS services, user vs. provider, direct 
vs. indirect relationships? What additional clarifications or 
alternatives concerning the proposed framework or its elements, if any, 
should the Agencies consider? For instance, would further examples of 
ways that firms may act as provider of PCS services be useful? Should 
the Agencies consider further distinguishing between providers based on 
the type of PCS service they provide?
    Playbooks for Continued Access to PCS Services. Firms also would be 
expected to provide a playbook for each key FMU and agent bank that 
addresses financial considerations and includes operational detail that 
would assist the firm in maintaining continued access to PCS services 
for itself and its clients in stress and in resolution. Under the 
proposal, each key FMU and agent bank playbook would be expected to 
provide analysis of the financial and operational impact to the firm's 
material entities and key clients due to a loss of access to the FMU or 
agent bank. Each playbook also should discuss any possible alternative 
arrangements that would allow the firm and its key clients to maintain 
continued access to PCS services in resolution. However, the firm is 
not expected to incorporate a scenario in which it loses FMU or agent 
bank access into its preferred resolution strategy or its RLEN/RCEN 
estimates.
    Firms communicated with key FMUs and agent banks in preparing their 
most recent resolution plan submissions and indicated that such 
communication was helpful in refining their analysis concerning 
potential adverse actions and contingency arrangements. Firms would be 
expected to continue to engage with key FMUs, agent banks, and clients, 
and playbooks would be expected to reflect any feedback received during 
such ongoing outreach. Firms are encouraged to continue engaging with 
each other, key FMUs and agent banks, and other stakeholders to 
identify possible initiatives or additional ways to support continued 
access to PCS services.
    The proposed guidance differentiates the type of information to be 
included in a firm's key FMU and agent bank playbooks based on whether 
a firm is a user of PCS services with respect to that FMU or agent 
bank, a provider of PCS services with respect to that FMU or agent 
bank, or both. To the extent a firm is both a user and a provider of 
PCS services with respect to a particular FMU or agent bank, the firm 
would be expected to provide the described content for both users and 
providers of PCS services. A firm would be able to do so either in the 
same playbook or in separate playbooks included in its resolution plan 
submission.
    Content related to Users of PCS Services. Under the proposal, each 
playbook for an individual FMU or agent bank should include, at a 
minimum, a description of the firm's relationship as a user with the 
key FMU or agent bank and an identification and mapping of PCS services 
to the associated material entities, critical operations, and core 
business lines that use those PCS services, as well as a discussion of 
the potential range of adverse actions that could be taken by that key 
FMU or agent bank in a period of stress for the firm or upon the firm's 
resolution.\11\ Playbooks submitted as part of the firms' most recent 
resolution plan submissions mapped the PCS services provided to 
material entities, critical operations, and core business lines at a 
fairly granular level, which enhanced the utility of these playbooks.
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    \11\ Potential adverse actions may include increased collateral 
and margin requirements and enhanced reporting and monitoring.
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    In discussing the potential range of adverse actions that a key FMU 
or agent bank could take, each playbook would be expected to address 
the operational and financial impact of such actions on each material 
entity and discuss contingency arrangements that the firm may initiate 
in response to such actions by the key FMU or key agent bank. 
Operational impacts may include effects

[[Page 32860]]

on governance mechanisms or resource allocation (including human 
resources), as well as any expected enhanced communication with key 
stakeholders (e.g., regulators, FMUs and agent banks). Financial 
impacts may include those directly associated with liquidity or any 
additional costs incurred by the firm as a result of such adverse 
actions and contingency arrangements. The proposed PCS guidance 
specifies that each playbook should discuss PCS-related liquidity 
sources and uses in business-as-usual (BAU), in stress, and in the 
resolution period. Each firm would be expected to determine the 
relevant measurement points, and this information would be presented by 
currency type (with U.S. dollar equivalent) and by material entity. 
Each playbook also would be expected to describe any account features 
that might restrict the firm's ready access to its intraday liquidity 
sources, the firm's ability to control intraday liquidity outflows, and 
the firm's capabilities to identify and prioritize time-specific 
payments.
    Content related to Providers of PCS Services. Under the proposal, a 
firm that is a direct or indirect provider of PCS services would be 
expected to identify key clients that rely upon PCS services provided 
by the firm in its playbook for the relevant FMU or agent bank. 
Playbooks would be expected to describe the scale and manner in which 
the firm's material entities, critical operations, and core business 
lines provide PCS services and any related credit or liquidity offered 
by the firm in connection with such services. Similar to the playbook 
content expected of users of PCS services, each playbook would be 
expected to include a mapping of the PCS services provided to each 
material entity, critical operation, core business line, and key 
clients. In the case where a firm is a provider of PCS services through 
its own operations, the firm would expected to produce a playbook for 
the material entity that provides those services, and the playbook 
would focus on continuity of access for its key clients.
    The proposal states that playbooks should discuss the potential 
range of contingency arrangements available to the firm to minimize 
disruption to its provision of PCS services to its clients and the 
financial and operational impacts of such arrangements. Contingency 
arrangements may include viable transfer of client activity and any 
related assets or any alternative arrangements that would allow the 
firm's key clients to maintain continued access to critical PCS 
services. The playbook also would be expected to describe the range of 
contingency actions that the firm may take concerning its provision of 
intraday credit to key clients and to provide analysis quantifying the 
potential liquidity that the firm could generate by taking each such 
action in stress and in the resolution period. To the extent a firm 
would not take any such actions as part of its preferred resolution 
strategy, the firm would be expected to describe its reasons for not 
taking any contingency action.
    Under the proposal, a firm should communicate the potential impacts 
of implementation of any identified contingency arrangements or 
alternatives to its key clients, and playbooks should describe the 
firm's methodology for determining whether it should provide any 
additional communication to some or all key clients (e.g., due to the 
client's usage of that access and/or related extensions of credit), as 
well as the expected timing and form of such communication. The 
Agencies note that in their most recent submissions, all of the firms 
addressed the issue of client communications and provided descriptions 
of planned or existing client communications, with some firms 
submitting specific samples of such communication. Firms would be 
expected to consider any benefit of communicating this information in 
multiple forms (e.g., verbal, written) and at multiple time periods 
(e.g., BAU, stress, some point in time in advance of taking contingency 
actions) in order to provide adequate notice to key clients of the 
action and the potential impact on the client of that action. In making 
decisions concerning communications to its key clients, the proposal 
states that firms also should consider any benefit of tailoring 
communications to different subsets of clients (e.g., based on 
different levels of activity or credit usage) in form, timing, or both. 
Playbooks may include sample client contracts or agreements containing 
provisions related to the firm's provision of intraday credit or 
liquidity.\12\ Such sample contracts or agreements may be particularly 
important to the extent that the firm believes those documents 
sufficiently convey to clients the contingency arrangements available 
to the firm and the potential impacts of implementing such contingency 
arrangements.
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    \12\ If these sample client contracts or agreements are included 
separately as part of the firm's resolution plan submission, they 
may be incorporated into the playbook by reference.
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    Question 3: Are the Agencies' expectations with respect to playbook 
content for firms that are users or providers (or both) of PCS services 
sufficiently clear? What additional clarifications, alternatives, or 
additional information, if any, should the Agencies consider?
    Question 4: Should the guidance indicate that providers of PCS 
activities are expected to expressly consider particular contingency 
arrangements (e.g., methods to transfer client activity to other firms 
with whom the clients have relationships, alternate agent bank 
relationships)? Should the guidance also indicate that firms should 
expressly consider particular actions they may take concerning the 
provision of intraday credit to affiliate and third-party clients, such 
as requiring pre-funding? If so, what particular actions should these 
firms address?
    Question 5: Specifically for users of PCS activities, should the 
guidance indicate that firms are expected to expressly include 
particular PCS-related liquidity sources and uses such as client pre-
funding, or specific abilities to control intraday liquidity inflows 
and outflows (e.g., throttling or prioritizing of payments)? If so, 
what particular sources and uses should firms be expected to include?
    Question 6: Specifically for providers of PCS services are the 
Agencies' expectations concerning a firm's communication to its key 
clients (including affiliates as applicable) of the potential impacts 
of implementation of identified contingency arrangements sufficiently 
clear? What additional clarifications, if any, should the Agencies 
consider? Should the Agencies expect firms to communicate this 
information at specific times or in specific formats?

Derivatives and Trading Activities

    This section of the proposed guidance is intended to explain 
expectations for Bank of America Corporation, Citigroup Inc., The 
Goldman Sachs Group, Inc., JP Morgan Chase & Co., Morgan Stanley, and 
Wells Fargo & Company (each, a ``dealer firm'').\13\
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    \13\ Dealer firms share many quantitative and qualitative 
characteristics. For example, each dealer firm is a Covered Company 
that (as of December 31, 2017) (i) has total derivatives notional 
values greater than $5 trillion, (ii) has global gross market value 
of derivatives greater than $20 billion, (iii) has a sum of global 
trading assets and trading liabilities greater than $110 billion 
(each on the basis of a 3-year rolling average), (iv) is subject to 
the GSIB Surcharge and all components of the CCAR quantitative 
assessment (i.e., global market shock and counterparty default 
scenario components), and (v) is parent to a designated primary 
dealer.
---------------------------------------------------------------------------

    The size, scope, complexity, and opacity of a firm's global 
derivatives and trading activities may present

[[Page 32861]]

significant risk to resolvability. To facilitate an orderly resolution, 
a dealer firm should be able to demonstrate the ability to stabilize 
and de-risk its derivatives and trading activities during resolution 
without posing a threat to U.S. financial stability. Therefore, dealer 
firms have developed capabilities to identify and mitigate the risks 
associated with their derivatives and trading activities and with the 
implementation of their preferred resolution strategies. These 
capabilities seek to facilitate a dealer firm's planning, preparedness, 
and execution of an orderly resolution. The proposed guidance would 
clarify the Agencies' expectations with respect to such capabilities 
and a firm's analysis of its preferred strategy. The proposed guidance 
also would eliminate the expectations of the 2016 Guidance that a 
dealer firm's resolution plan include separate passive and active wind-
down scenario analyses, the agency-specified data templates, and rating 
agency playbooks.
    Over the past several years, the Agencies have engaged 
significantly with dealer firms to assess their resolution capabilities 
and to provide feedback with respect to their resolution preparedness. 
As a group, dealer firms have made meaningful improvements over 
previous resolution plan submissions. These improvements include 
efforts by dealer firms to enhance their resolution capabilities 
related to derivatives and trading activities and to integrate those 
capabilities with their business-as-usual practices. The expectations 
set out in this section of the proposed guidance reflect many of those 
improvements. As described in more detail below, this section of the 
proposed guidance is organized in five subsections. The first four of 
the subsections describe expectations for resolution capabilities that 
are commensurate with the size, scope and complexity of a firm's 
derivatives portfolios and should help assure that dealer firms 
maintain the operational preparedness to implement an orderly 
resolution. The fifth subsection--derivatives stabilization and de-
risking strategy--describes expectations for a dealer firm's analysis 
of its approach to managing its derivatives portfolios in an orderly 
resolution.
    Booking practices. To minimize uncertainty and avoid excessive 
complexity and opacity that can frustrate a firm's resolution 
preparedness, a dealer firm's resolution capabilities should include 
booking practices commensurate with the size, scope and complexity of a 
firm's derivatives portfolios. Dealer firms are currently developing 
booking practices that provide timely and up-to-date information 
regarding the structure, risks and resource needs associated with the 
management of its derivatives activities under a broad range of 
potential stress and failure scenarios. Therefore, the proposed 
guidance would clarify the capabilities a dealer firm is expected to 
have related to its booking practices, including descriptions of its 
comprehensive booking model framework and demonstrations of its ability 
to identify, assess, and report on each entity with derivatives 
portfolios (a ``derivatives entity'').\14\
---------------------------------------------------------------------------

    \14\ Consistent with prior guidance, ``derivatives entities'' 
should include both material and non-material entities, in part 
because non-material entities, in the aggregate, may represent 
significant exposures.
---------------------------------------------------------------------------

    Inter-affiliate risk monitoring and controls. Affiliates of a 
derivatives entity may be forced to discontinue a trading relationship 
with that derivatives entity during resolution, which poses risks to 
the orderly resolution of a firm. The proposal describes the Agencies' 
expectations that a dealer firm address this risk by being able to 
provide timely transparency into the current risk transfers between 
affiliates and the resolvability risks related to such transfers, 
including expectations regarding an inter-affiliate market risk 
framework that enables the firm to monitor and limit the exposures a 
derivatives entity that is a material entity could experience in an 
extreme resolution scenario.
    Portfolio segmentation and forecasting. The ability to quickly and 
reliably identify problematic derivatives positions and portfolios is 
critical to minimizing uncertainty and forecasting resource needs to 
enable an orderly resolution. Each dealer firm has developed various 
modeling approaches that are used to evidence the adequacy of the 
capabilities and resources needed to execute its preferred resolution 
strategy. The utility of these modeled results is often affected by the 
scope of readily available data on the underlying characteristics of a 
dealer firm's derivatives portfolios. Therefore, the proposal confirms 
that a dealer firm should have the capabilities to produce analysis 
that reflects granular portfolio segmentation and differentiation of 
assumptions taking into account trade-level characteristics. Similarly, 
the proposed guidance also provides additional detail regarding other 
segmentation and forecasting related capabilities that the dealer 
firm's resolution plan should describe and demonstrate. These 
capabilities include (i) a method and supporting systems capabilities 
for categorizing and ranking the ease of exit for its derivatives 
positions (``ease of exit'' position analysis), (ii) the systems 
capabilities to apply the firm's exit cost methodology to its firm-wide 
derivatives portfolio (application of exit cost methodology), (iii) 
capabilities to assess the operational resources and forecast the costs 
related to its current derivatives activities (analysis of operational 
capacity), and (iv) a method to apply sensitivity analyses to the key 
drivers of the derivatives-related costs and liquidity flows under its 
preferred resolution strategy (sensitivity analysis).
    Prime brokerage customer account transfers. The rapid withdrawal 
from a firm by prime brokerage clients can contribute to a disorderly 
resolution. Dealer firms' resolution plans should address the risk that 
during a resolution the firm's prime brokerage clients may seek to 
withdraw or transfer customer accounts balances in rates significantly 
higher than normal business conditions. The proposed guidance confirms 
that dealer firms should have the capabilities to facilitate the 
orderly transfer of prime brokerage account balances to peer prime 
brokers and describes the Agencies' related expectations in greater 
detail. In particular, the proposed guidance clarifies that a dealer 
firm's resolution plan should describe and demonstrate its ability to 
segment and analyze the quality and composition of such account 
balances and to rank account balances according to their potential 
transfer speed.
    Derivatives stabilization and de-risking strategy. A key risk to 
the orderly resolution of a dealer firm is a volatile and risky 
derivatives portfolio. In the event of material financial distress or 
failure, the resolvability risks related to a dealer firm's derivatives 
and trading activities would be a key obstacle to the firm's rapid and 
orderly resolution. Dealer firms' resolution plans should address this 
obstacle. The proposed guidance confirms that a dealer firm's plan 
should provide a detailed analysis of the strategy to stabilize and de-
risk its derivatives portfolios (``derivatives strategy'') and provides 
additional detail regarding the Agencies' expectations.\15\ In 
particular, the proposed guidance clarifies that a dealer firm should 
incorporate into its derivatives strategy

[[Page 32862]]

assumptions consistent with the lack of access to the bilateral OTC 
derivatives market at the start of its resolution period. The proposed 
guidance also confirms or clarifies expectations related to other 
elements that should be addressed in the firm's analysis of its 
derivatives strategy, including the incorporation of resource needs 
into RLEN and RCEN (forecast of resource needs), an analysis of any 
potential derivatives portfolio remaining after the resolution period 
(potential residual derivatives portfolio), and the impact (including 
on non-U.S. jurisdictions) from the assumed failure of a material 
derivatives entity (non-surviving material entity analysis).\16\
---------------------------------------------------------------------------

    \15\ Subject to the certain constraints, a firm's derivatives 
strategy may take the form of a going-concern strategy, an 
accelerated de-risking strategy (e.g., active wind-down) or an 
alternative, third strategy so long as the firm's resolution plan 
adequately supports the executability of the chosen strategy.
    \16\ From the perspective of protecting U.S. financial 
stability, the risk of adverse regulatory actions that could impede 
an orderly resolution increases where a material entity's failure 
would have extraordinary impacts on local markets. Therefore, 
analysis of non-surviving material entities located in a non-U.S. 
jurisdiction should contemplate the impact on local markets.
---------------------------------------------------------------------------

    Question 7: Do the proposed changes relative to the 2016 Guidance 
provide sufficient clarity or are additional clarifications required?

Consolidation of Existing Guidance

    In addition to the 2016 Guidance, the Agencies have also issued: 
the Guidance for 2013 Sec.  165(d) Annual Resolution Plan Submissions 
by Domestic Covered Companies that Submitted Initial Resolution Plans 
in 2012 (the ``2013 Guidance''); firm-specific feedback letters issued 
in 2014 and 2016; and the February 2015 staff communication regarding 
the 2016 plan submissions. The Agencies are considering consolidating 
all applicable guidance into a single document, which would provide the 
public with one source of applicable guidance to which to refer. The 
Agencies would also expect to incorporate aspects of the Resolution 
Plan Frequently Asked Questions issued May 2017 that may remain 
applicable.\17\ For example, the Agencies could add a section to the 
proposed guidance that includes the aspects of the 2013 Guidance that 
should remain applicable, such as the plan format description in the 
``Format of 2013 Plan'' and ``Additional Format and Content Guidance'' 
sections, some of the central assumptions and stress scenarios in the 
``Assumptions'' and ``Stress Scenarios'' sections, the process for 
addressing expected global cooperation described in the ``Global 
Cooperation'' section, and the considerations for identifying material 
entities in the ``Material Entities'' section.
---------------------------------------------------------------------------

    \17\ https://www.fdic.gov/resauthority/2017faqsguidance.pdf; 
https://www.federalreserve.gov/publications/files/resolution-plan-faqs.pdf.
---------------------------------------------------------------------------

    Question 8: Should the Agencies consolidate all applicable 
guidance? If so, which aspects of the other guidance warrant inclusion, 
additional clarification or modification?

IV. Paperwork Reduction Act

    Certain provisions of the Rule contain ``collection of 
information'' requirements within the meaning of the Paperwork 
Reduction Act (``PRA'') of 1995 (44 U.S.C. 3501 through 3521). In 
accordance with the requirements of the PRA, a respondent is not 
required to respond to an information collection unless it displays a 
currently valid Office of Management and Budget (OMB) control number. 
The Agencies believe that the proposed changes to the 2016 Guidance 
would not result in an increase in information collection burden to the 
Covered Companies. The Agencies invite public comment on this 
assessment.

TEXT OF PROPOSED RESOLUTION PLANNING GUIDANCE FOR EIGHT LARGE, COMPLEX 
U.S. BANKING ORGANIZATIONS

Resolution Planning Guidance for Eight Large, Complex U.S. Banking 
Organizations

I. Introduction
II. Capital
    a. Resolution Capital Adequacy and Positioning (RCAP)
    b. Resolution Capital Execution Need (RCEN)
III. Liquidity
    a. Resolution Liquidity Adequacy and Positioning (RLAP)
    b. Resolution Liquidity Execution Need (RLEN)
IV. Governance Mechanisms
    a. Playbooks and Triggers
    b. Pre-Bankruptcy Parent Support
V. Operational
    a. Payment, Clearing, and Settlement Activities
    b. Managing, Identifying, and Valuing Collateral
    c. Management Information Systems
    d. Shared and Outsourced Services
    e. Legal Obstacles Associated with Emergency Motions
VI. Legal Entity Rationalization and Separability
    a. Legal Entity Rationalization Criteria (LER Criteria)
    b. Separability
VII. Derivatives and Trading Activities
    a. Booking Practices
    b. Inter-Affiliate Risk Monitoring and Controls
    c. Portfolio Segmentation and Forecasting
    d. Prime Brokerage Customer Account Transfers
    e. Derivatives Stabilization and De-risking Strategy
VIII. Public Section

I. Introduction

    Resolution Plan Requirement: Section 165(d) of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act (12 U.S.C. 5365(d)) requires 
certain financial companies (``Covered Companies'') to report 
periodically to the Board of Governors of the Federal Reserve System 
(the ``Federal Reserve'' or ``Board'') and the Federal Deposit 
Insurance Corporation (the ``FDIC'') (together ``the Agencies'') the 
Companies' \18\ Plans for Rapid and Orderly Resolution in the event of 
Material Financial Distress or failure. On November 1, 2011, the 
Agencies promulgated a joint rule (the ``Rule'') implementing the 
provisions of Section 165(d), 12 CFR parts 243 and 381.\19\ Certain 
Covered Companies meeting criteria set out in the Rule must file a 
resolution plan (``Plan'') annually or at a different time period 
specified by the Agencies.
---------------------------------------------------------------------------

    \18\ Capitalized terms not defined herein have the meaning set 
forth in the Rule.
    \19\ 76 Fed. Reg. 67323 (November 1, 2011)
---------------------------------------------------------------------------

    Overview of Guidance Document: This document is intended to assist 
the eight current U.S. Global Systemically Important Banks (``GSIBs'' 
or ``firms'') \20\ in further developing their preferred resolution 
strategies. The document describes the expectations of the Agencies 
regarding these firms' resolution plans, and highlights specific areas 
where additional detail should be provided and where certain 
capabilities or optionality should be developed and maintained to 
demonstrate that each firm has considered fully, and is able to 
mitigate, obstacles to the successful implementation of the preferred 
strategy.\21\
---------------------------------------------------------------------------

    \20\ Bank of America Corporation, the Bank of New York Mellon 
Corporation, Citigroup Inc., the Goldman Sachs Group, Inc., JPMorgan 
Chase & Co., Morgan Stanley, State Street Corporation and Wells 
Fargo & Company.
    \21\ The 2013 Guidance, the 2014 Letter, and the 2015 
Communication, as described in the 2016 letters to the firms, 
continue to be applicable (relevant dates should be updated 
appropriately), except to the extent superseded or supplemented by 
the provisions of this document. See Letters dated April 12, 2016, 
from the Board and FDIC to Bank of America Corporation, The Bank of 
New York Mellon Corporation, Citigroup Inc., the Goldman Sachs 
Group, Inc., JPMorgan Chase & Co., Morgan Stanley, State Street 
Corporation, and Wells Fargo & Company, available at https://www.federalreserve.gov/supervisionreg/resolution-plans.htm.
---------------------------------------------------------------------------

    This document is organized around a number of key vulnerabilities 
in resolution (i.e., capital; liquidity; governance mechanisms; 
operational; legal entity rationalization and separability; and 
derivatives and trading activities) that apply across resolution plans. 
Additional vulnerabilities or

[[Page 32863]]

obstacles may arise based on a firm's particular structure, operations, 
or resolution strategy. Each firm is expected to satisfactorily address 
these vulnerabilities in its Plan--e.g., by developing sensitivity 
analysis for certain underlying assumptions, enhancing capabilities, 
providing detailed analysis, or increasing optionality development, as 
indicated below.
    The Agencies will review the Plan to determine if it satisfactorily 
addresses key potential vulnerabilities, including those detailed 
below. If the Agencies jointly decide that these matters are not 
satisfactorily addressed in the Plan, the Agencies may determine 
jointly that the Plan is not credible or would not facilitate an 
orderly resolution under the U.S. Bankruptcy Code.

II. CAPITAL

    Resolution Capital Adequacy and Positioning (RCAP): To help ensure 
that a firm's material entities \22\ could operate while the parent 
company is in bankruptcy, the firm should have an adequate amount of 
loss-absorbing capacity to recapitalize those material entities. Thus, 
a firm should have outstanding a minimum amount of total loss-absorbing 
capital, as well as a minimum amount of long-term debt, to help ensure 
that the firm has adequate capacity to meet that need at a consolidated 
level (external TLAC).\23\
---------------------------------------------------------------------------

    \22\ The terms ``material entities,'' ``critical operations,'' 
and ``core business lines'' have the same meaning as in the 
Agencies' Rule.
    \23\ 82 Fed. Reg. 8266 (January 24, 2017).
---------------------------------------------------------------------------

    A firm's external TLAC should be complemented by appropriate 
positioning of additional loss-absorbing capacity within the firm 
(internal TLAC). The positioning of a firm's internal TLAC should 
balance the certainty associated with pre-positioning internal TLAC 
directly at material entities with the flexibility provided by holding 
recapitalization resources at the parent (contributable resources) to 
meet unanticipated losses at material entities. That balance should 
take account of both pre-positioning at material entities and holding 
resources at the parent, and the obstacles associated with each. 
Accordingly, the firm should not rely exclusively on either full pre-
positioning or parent contributable resources to recapitalize any 
material entity. The plan should describe the positioning of internal 
TLAC within the firm, along with analysis supporting such positioning.
    Finally, to the extent that pre-positioned internal TLAC at a 
material entity is in the form of intercompany debt and there are one 
or more entities between that material entity and the parent, the firm 
should mitigate uncertainty related to potential creditor challenge; 
for example, by ensuring that the seniority and tenor of the 
intercompany debt is the same between all entities in the chain.
    Resolution Capital Execution Need (RCEN): To support the execution 
of the firm's resolution strategy, material entities need to be 
recapitalized to a level that allows them to operate or be wound down 
in an orderly manner following the parent company's bankruptcy filing. 
The firm should have a methodology for periodically estimating the 
amount of capital that may be needed to support each material entity 
after the bankruptcy filing (RCEN). The firm's positioning of internal 
TLAC should be able to support the RCEN estimates. In addition, the 
RCEN estimates should be incorporated into the firm's governance 
framework to ensure that the parent company files for bankruptcy at a 
time that enables execution of the preferred strategy.
    The firm's RCEN methodology should use conservative forecasts for 
losses and risk-weighted assets and incorporate estimates of potential 
additional capital needs through the resolution period,\24\ consistent 
with the firm's resolution strategy. However, the methodology is not 
required to produce aggregate losses that are greater than the amount 
of external TLAC that would be required for the firm under the Board's 
rule.\25\ The RCEN methodology should be calibrated such that 
recapitalized material entities have sufficient capital to maintain 
market confidence as required under the preferred resolution strategy. 
Capital levels should meet or exceed all applicable regulatory capital 
requirements for ``well-capitalized'' status and meet estimated 
additional capital needs throughout resolution. Material entities that 
are not subject to capital requirements may be considered sufficiently 
recapitalized when they have achieved capital levels typically required 
to obtain an investment-grade credit rating or, if the entity is not 
rated, an equivalent level of financial soundness. Finally, the 
methodology should be independently reviewed, consistent with the 
firm's corporate governance processes and controls for the use of 
models and methodologies.
---------------------------------------------------------------------------

    \24\ The resolution period begins immediately after the parent 
company bankruptcy filing and extends through the completion of the 
preferred resolution strategy.
    \25\ See 12 CFR 252.60-.65; 82 Fed. Reg. 8266 (January 24, 
2017).
---------------------------------------------------------------------------

III. LIQUIDITY

    The firm should have the liquidity capabilities necessary to 
execute its preferred resolution strategy, including those described in 
SR Letter 14-1.\26\ For resolution purposes, these capabilities should 
include having an appropriate model and process for estimating and 
maintaining sufficient liquidity at or readily available to material 
entities and a methodology for estimating the liquidity needed to 
successfully execute the resolution strategy, as described below.
---------------------------------------------------------------------------

    \26\ SR Letter 14-1, ``Heightened Supervisory Expectations for 
Recovery and Resolution Preparedness for Certain Large Bank Holding 
Companies--Supplemental Guidance on Consolidated Supervision 
Framework for Large Financial Institutions'' (Jan. 24, 2014), 
available at http://www.federalreserve.gov/bankinforeg/srletters/sr1401.pdf.
---------------------------------------------------------------------------

    Resolution Liquidity Adequacy and Positioning (RLAP): With respect 
to RLAP, the firm should be able to measure the stand-alone liquidity 
position of each material entity (including material entities that are 
non-U.S. branches)--i.e., the high-quality liquid assets (HQLA) at the 
material entity less net outflows to third parties and affiliates--and 
ensure that liquidity is readily available to meet any deficits. The 
RLAP model should cover a period of at least 30 days and reflect the 
idiosyncratic liquidity profile and risk of the firm. The model should 
balance the reduction in frictions associated with holding liquidity 
directly at material entities with the flexibility provided by holding 
HQLA at the parent available to meet unanticipated outflows at material 
entities. Thus, the firm should not rely exclusively on either full 
pre-positioning or the parent. The model \27\ should ensure that the 
parent holding company holds sufficient HQLA (inclusive of its deposits 
at the U.S. branch of the lead bank subsidiary) to cover the sum of all 
stand-alone material entity net liquidity deficits. The stand-alone net 
liquidity position of each material entity (HQLA less net outflows) 
should be measured using the firm's internal liquidity stress test 
assumptions and should treat inter-affiliate exposures in the same 
manner as third-party exposures. For example, an overnight unsecured 
exposure to an affiliate should be assumed to mature. Finally, the firm 
should not assume that a net liquidity surplus at one material entity 
could be moved to meet net

[[Page 32864]]

liquidity deficits at other material entities or to augment parent 
resources.
---------------------------------------------------------------------------

    \27\ ``Model'' refers to the set of calculations estimating the 
net liquidity surplus/deficit at each legal entity and for the firm 
in aggregate based on assumptions regarding available liquidity, 
e.g., HQLA, and third-party and interaffiliate net outflows.
---------------------------------------------------------------------------

    Additionally, the RLAP methodology should take into account (A) the 
daily contractual mismatches between inflows and outflows; (B) the 
daily flows from movement of cash and collateral for all inter-
affiliate transactions; and (C) the daily stressed liquidity flows and 
trapped liquidity as a result of actions taken by clients, 
counterparties, key financial market utilities (FMUs), and foreign 
supervisors, among others.
    Resolution Liquidity Execution Need (RLEN): The firm should have a 
methodology for estimating the liquidity needed after the parent's 
bankruptcy filing to stabilize the surviving material entities and to 
allow those entities to operate post-filing. The RLEN estimate should 
be incorporated into the firm's governance framework to ensure that the 
firm files for bankruptcy in a timely way, i.e., prior to the firm's 
HQLA falling below the RLEN estimate.
    The firm's RLEN methodology should:
    (A) Estimate the minimum operating liquidity (MOL) needed at each 
material entity to ensure those entities could continue to operate 
post-parent's bankruptcy filing and/or to support a wind-down strategy;
    (B) Provide daily cash flow forecasts by material entity to support 
estimation of peak funding needs to stabilize each entity under 
resolution;
    (C) Provide a comprehensive breakout of all inter-affiliate 
transactions and arrangements that could impact the MOL or peak funding 
needs estimates; and
    (D) Estimate the minimum amount of liquidity required at each 
material entity to meet the MOL and peak needs noted above, which would 
inform the firm's board(s) of directors of when they need to take 
resolution-related actions.
    The MOL estimates should capture material entities' intraday 
liquidity requirements, operating expenses, working capital needs, and 
inter-affiliate funding frictions to ensure that material entities 
could operate without disruption during the resolution.
    The peak funding needs estimates should be projected for each 
material entity and cover the length of time the firm expects it would 
take to stabilize that material entity. Inter-affiliate funding 
frictions should be taken into account in the estimation process.
    The firm's forecasts of MOL and peak funding needs should ensure 
that material entities could operate post-filing consistent with 
regulatory requirements, market expectations, and the firm's post-
failure strategy. These forecasts should inform the RLEN estimate, 
i.e., the minimum amount of HQLA required to facilitate the execution 
of the firm's strategy. The RLEN estimate should be tied to the firm's 
governance mechanisms and be incorporated into the playbooks as 
discussed below to assist the board of directors in taking timely 
resolution-related actions.

IV. GOVERNANCE MECHANISMS

    Playbooks and Triggers: A firm should identify the governance 
mechanisms that would ensure execution of required board actions at the 
appropriate time (as anticipated under the firm's preferred strategy) 
and include pre-action triggers and existing agreements for such 
actions. Governance playbooks should detail the board and senior 
management actions necessary to facilitate the firm's preferred 
strategy and to mitigate vulnerabilities, and should incorporate the 
triggers identified below. The governance playbooks should also include 
a discussion of (A) the firm's proposed communications strategy, both 
internal and external; (B) the boards of directors' fiduciary 
responsibilities and how planned actions would be consistent with such 
responsibilities applicable at the time actions are expected to be 
taken; (C) potential conflicts of interest, including interlocking 
boards of directors; and (D) any employee retention policy. All 
responsible parties and timeframes for action should be identified. 
Governance playbooks should be updated periodically for all entities 
whose boards of directors would need to act in advance of the 
commencement of resolution proceedings under the firm's preferred 
strategy.
    The firm should demonstrate that key actions will be taken at the 
appropriate time in order to mitigate financial, operational, legal, 
and regulatory vulnerabilities. To ensure that these actions will 
occur, the firm should establish clearly identified triggers linked to 
specific actions for:
    (A) The escalation of information to senior management and the 
board(s) to potentially take the corresponding actions at each stage of 
distress post-recovery leading eventually to the decision to file for 
bankruptcy;
    (B) Successful recapitalization of subsidiaries prior to the 
parent's filing for bankruptcy and funding of such entities during the 
parent company's bankruptcy to the extent the preferred strategy relies 
on such actions or support; and
    (C) The timely execution of a bankruptcy filing and related pre-
filing actions.\28\
---------------------------------------------------------------------------

    \28\ Key pre-filing actions include the preparation of any 
emergency motion required to be decided on the first day of the 
firm's bankruptcy. See ``OPERATIONAL--Legal Obstacles Associated 
with Emergency Motions,'' below.
---------------------------------------------------------------------------

    These triggers should be based, at a minimum, on capital, 
liquidity, and market metrics, and should incorporate the firm's 
methodologies for forecasting the liquidity and capital needed to 
operate as required by the preferred strategy following a parent 
company's bankruptcy filing. Additionally, the triggers and related 
actions should be specific.
    Triggers linked to firm actions as contemplated by the firm's 
preferred strategy should identify when and under what conditions the 
firm, including the parent company and its material entities, would 
transition from business-as-usual conditions to a stress period and 
from a stress period to the runway and recapitalization/resolution 
periods. Corresponding escalation procedures, actions, and timeframes 
should be constructed so that breach of the triggers will allow 
prerequisite actions to be completed. For example, breach of the 
triggers needs to occur early enough to ensure that resources are 
available and can be downstreamed, if anticipated by the firm's 
strategy, and with adequate time for the preparation of the bankruptcy 
petition and first-day motions, necessary stakeholder communications, 
and requisite board actions. Triggers identifying the onset of the 
runway and recapitalization/resolution periods, and the associated 
escalation procedures and actions, should be discussed directly in the 
governance playbooks.
    Pre-Bankruptcy Parent Support: The resolution plan should include a 
detailed legal analysis of the potential state law and bankruptcy law 
challenges and mitigants to planned provision of capital and liquidity 
to the subsidiaries prior to the parent's bankruptcy filing (Support). 
Specifically, the analysis should identify potential legal obstacles 
and explain how the firm would seek to ensure that Support would be 
provided as planned. Legal obstacles include claims of fraudulent 
transfer, preference, breach of fiduciary duty, and any other 
applicable legal theory identified by the firm. The analysis also 
should include related claims that may prevent or delay an effective 
recapitalization, such as equitable claims to enjoin the transfer 
(e.g., imposition of a constructive trust by the court). The analysis 
should apply the actions contemplated in the plan

[[Page 32865]]

regarding each element of the claim, the anticipated timing for 
commencement and resolution of the claims, and the extent to which 
adjudication of such claim could affect execution of the firm's 
preferred resolution strategy.
    As noted, the analysis should include mitigants to the potential 
challenges to the planned Support. The plan should include the 
mitigant(s) to such challenges that the firm considers most effective. 
In identifying appropriate mitigants, the firm should consider the 
effectiveness of a contractually binding mechanism (CBM), pre-
positioning of financial resources in material entities, and the 
creation of an intermediate holding company. Moreover, if the plan 
includes a CBM, the firm should consider whether it is appropriate that 
the CBM should have the following: (A) clearly defined triggers; (B) 
triggers that are synchronized to the firm's liquidity and capital 
methodologies; (C) perfected security interests in specified collateral 
sufficient to fully secure all Support obligations on a continuous 
basis (including mechanisms for adjusting the amount of collateral as 
the value of obligations under the agreement or collateral assets 
fluctuates); and (D) liquidated damages provisions or other features 
designed to make the CBM more enforceable. The firm also should 
consider related actions or agreements that may enhance the 
effectiveness of a CBM. A copy of any agreement and documents 
referenced therein (e.g., evidence of security interest perfection) 
should be included in the resolution plan.
    The governance playbooks included in the resolution plan should 
incorporate any developments from the firm's analysis of potential 
legal challenges regarding the Support, including any Support 
approach(es) the firm has implemented. If the firm analyzed and 
addressed an issue noted in this section in a prior plan submission, 
the plan may reproduce that analysis and arguments and should build 
upon it to at least the extent described above. In preparing the 
analysis of these issues, firms may consult with law firms and other 
experts on these matters. The Agencies do not object to appropriate 
collaboration between firms, including through trade organizations and 
with the academic community, to develop analysis of common legal 
challenges and available mitigants.

V. OPERATIONAL

Payment, Clearing, and Settlement Activities

    Framework. Maintaining continuity of payment, clearing, and 
settlement (PCS) services is critical for the orderly resolution of 
firms that are either users or providers,\29\ or both, of PCS services. 
A firm should demonstrate capabilities \30\ for continued access to PCS 
services essential to an orderly resolution through a framework to 
support such access by:
---------------------------------------------------------------------------

    \29\ A firm is a user of PCS services if it uses the services of 
a financial market utility (FMU) through its membership in that FMU 
or an agent bank. A firm is a provider of PCS services if it 
provides its clients with access to an FMU or agent bank through the 
firm's membership to or relationship with that service provider 
(including providing PCS services to its client as an agent bank) or 
if it provides key clients with critical PCS services (e.g., the 
suspension or termination of such services would impact the key 
client's continued access to PCS services) through the firm's own 
operations.
    \30\ These capabilities may include those described in SR Letter 
14-1.
---------------------------------------------------------------------------

     Identifying key clients,\31\ FMUs, and agent banks, using 
both quantitative (volume and value) \32\ and qualitative criteria;
---------------------------------------------------------------------------

    \31\ For purposes of this section V, a client is an individual 
or entity, including affiliates of the firm, that relies upon 
continued access to the firm's PCS services and any related credit 
or liquidity offered in connection with those services.
    \32\ Examples of quantitative criteria include not only the 
aggregate volumes and values of all transactions processed through 
an FMU but also assets under custody with an agent bank, the value 
of cash and securities settled through an agent bank, and extensions 
of intraday credit.
---------------------------------------------------------------------------

     Mapping material entities, critical operations, core 
business lines, and key clients to both key FMUs and agent banks; and
     Developing a playbook for each key FMU and agent bank 
reflecting the firm's role(s) as a user and/or provider of PCS 
services.
    The framework should address both direct relationships (e.g., 
firm's direct membership in the FMU, firm provides key clients with 
critical PCS services through its own operations, firm's contractual 
relationship with an agent bank) and indirect relationships (e.g., firm 
provides its clients with access to the relevant FMU or agent bank 
through the firm's membership to or relationship with that FMU or agent 
bank).
    Playbooks for Continued Access to PCS Services. The firm is 
expected to provide a playbook for each key FMU and agent bank that 
addresses considerations that would assist the firm and its clients in 
maintaining continued access to PCS services in the period leading up 
to and including the firm's resolution. While the firm is not expected 
to incorporate a scenario in which it loses FMU or agent bank access 
into its preferred resolution strategy or its RLEN/RCEN estimates, each 
playbook should provide analysis of the financial and operational 
impact to the firm's material entities and key clients due to loss of 
access to the FMU or agent bank. Each playbook also should discuss any 
possible alternative arrangements that would allow the firm and its key 
clients continued access to PCS services in resolution. The firm should 
continue to engage with key FMUs, agent banks and clients, and 
playbooks should reflect any feedback received during such ongoing 
outreach.
    Content Related to Users of PCS Services. Individual FMU and agent 
bank playbooks should include at a minimum:
     Description of the firm's relationship as a user with the 
key FMU or agent bank and the identification and mapping of PCS 
services to material entities, critical operations, and core business 
lines that use those PCS services;
     Discussion of the potential range of adverse actions that 
may be taken by that key FMU or agent bank when the firm is in 
resolution,\33\ the operational and financial impact of such actions on 
each material entity, and contingency arrangements that may be 
initiated by the firm in response to potential adverse actions by the 
key FMU or key agent bank; and
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    \33\ Potential adverse actions may include increased collateral 
and margin requirements and enhanced reporting and monitoring.
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     Discussion of PCS-related liquidity sources and uses in 
business-as-usual (BAU), in stress, and in the resolution period, 
presented by currency type (with U.S. dollar equivalent) and by 
material entity.
    [cir] PCS Liquidity Sources: These may include the amounts of 
intraday extensions of credit, liquidity buffer, inflows from FMU 
participants, and client prefunded amounts in BAU, in stress, and in 
the resolution period. The playbook should also describe intraday 
credit arrangements (e.g., facilities of the FMU, agent bank, or a 
central bank) and any similar custodial arrangements that allow ready 
access to a firm's funds for PCS-related FMU and agent bank obligations 
(including margin requirements) in various currencies, including 
placements of firm liquidity at central banks, FMUs, and agent banks.
    [cir] PCS Liquidity Uses: These may include firm and client margin, 
pre-funding and intraday extensions of credit, including incremental 
amounts required during resolution.

[[Page 32866]]

    [cir] Intraday Liquidity Inflows and Outflows: The playbook should 
describe the firm's ability to control intraday liquidity inflows and 
outflows and to identify and prioritize time-specific payments. The 
playbook should also describe any account features that might restrict 
the firm's ready access to its liquidity sources.
    Content Related to Providers of PCS Services. Individual FMU and 
agent bank playbooks \34\ should include at a minimum:
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    \34\ Where a firm is a provider of PCS services through the 
firm's own operations, the firm is expected to produce a playbook 
for the material entity that provides those services, including 
contingency arrangements to permit the firm's key clients to 
maintain continued access to PCS services.
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     Identification and mapping of PCS services to the material 
entities, critical operations, and core business lines that provide 
those PCS services, and a description of the scale and the way in which 
each provides PCS services;
     Identification and mapping of PCS services to key clients 
that rely upon the firm to provide those PCS services and any related 
credit or liquidity offered in connection with such services;
     Discussion of the potential range of firm contingency 
arrangements available to minimize disruption to the provision of PCS 
services to its clients, including the viability of transferring client 
activity and any related assets, as well as any alternative 
arrangements that would allow the firm's key clients continued access 
to critical PCS services if the firm could no longer provide such 
access (e.g., due to the firm's loss of FMU or agent bank access), and 
the financial and operational impacts of such arrangements;
     Description of the range of contingency actions that the 
firm may take concerning its provision of intraday credit to clients, 
including analysis quantifying the potential liquidity the firm could 
generate by taking such actions in stress and in the resolution period, 
such as (i) requiring clients to designate or appropriately pre-
position liquidity, including through pre-funding of settlement 
activity, for PCS-related FMU and agent bank obligations at specific 
material entities of the firm (e.g., direct members of FMUs) or any 
similar custodial arrangements that allow ready access to clients' 
funds for such obligations in various currencies; (ii) delaying or 
restricting client PCS activity; and (iii) restricting, imposing 
conditions upon (e.g., requiring collateral), or eliminating the 
provision of intraday credit or liquidity to clients; and
     Description of how the firm will communicate to its key 
clients the potential impacts of implementation of any identified 
contingency arrangements or alternatives, including a description of 
the firm's methodology for determining whether any additional 
communication should be provided to some or all key clients (e.g., due 
to the client's BAU usage of that access and/or related intraday credit 
or liquidity), and the expected timing and form of such communication.
    Managing, Identifying, and Valuing Collateral: The firm should have 
the capabilities described in SR Letter 14-1 related to managing, 
identifying, and valuing the collateral that it receives from and posts 
to external parties and its affiliates. Specifically, the firm should:
     Be able to query and provide aggregate statistics for all 
qualified financial contracts concerning cross-default clauses, 
downgrade triggers, and other key collateral-related contract terms -- 
not just those terms that may be impacted in an adverse economic 
environment -- across contract types, business lines, legal entities, 
and jurisdictions;
     Be able to track both firm collateral sources (i.e., 
counterparties that have pledged collateral) and uses (i.e., 
counterparties to whom collateral has been pledged) at the CUSIP level 
on at least a t+1 basis;
     Have robust risk measurements for cross-entity and cross-
contract netting, including consideration of where collateral is held 
and pledged;
     Be able to identify CUSIP and asset class level 
information on collateral pledged to specific central counterparties by 
legal entity on at least a t+1 basis;
     Be able to track and report on inter-branch collateral 
pledged and received on at least a t+1 basis and have clear policies 
explaining the rationale for such inter-branch pledges, including any 
regulatory considerations; and
     Have a comprehensive collateral management policy that 
outlines how the firm as a whole approaches collateral and serves as a 
single source for governance.\35\
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    \35\ The policy may reference subsidiary or related policies 
already in place, as implementation may differ based on business 
line or other factors.
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    Management Information Systems: The firm should have the management 
information systems (MIS) capabilities to readily produce data on a 
legal entity basis and have controls to ensure data integrity and 
reliability, as described in SR Letter 14-1. The firm also should 
perform a detailed analysis of the specific types of financial and risk 
data that would be required to execute the preferred resolution 
strategy and how frequently the firm would need to produce the 
information, with the appropriate level of granularity.
    Shared and Outsourced Services: The firm should maintain a fully 
actionable implementation plan to ensure the continuity of shared 
services that support critical operations and robust arrangements to 
support the continuity of shared and outsourced services. The firm 
should (A) maintain an identification of all shared services that 
support critical operations (critical services); (B) maintain a mapping 
of how/where these services support its core business lines and 
critical operations; (C) incorporate such mapping into legal entity 
rationalization criteria and implementation efforts; and (D) mitigate 
identified continuity risks through establishment of service-level 
agreements (SLAs) for all critical shared services. These SLAs should 
fully describe the services provided, reflect pricing considerations on 
an arm's-length basis where appropriate, and incorporate appropriate 
terms and conditions to (A) prevent automatic termination upon certain 
resolution-related events and (B) achieve continued provision of such 
services during resolution. The firm should also store SLAs in a 
central repository or repositories in a searchable format, develop and 
document contingency strategies and arrangements for replacement of 
critical shared services, and complete re-alignment or restructuring of 
activities within its corporate structure. In addition, the firm should 
ensure the financial resilience of internal shared service providers by 
maintaining working capital for six months (or through the period of 
stabilization as required in the firm's preferred strategy) in such 
entities sufficient to cover contract costs, consistent with the 
preferred resolution strategy.
    The firm should identify all critical outsourced services that 
support critical operations and could not be promptly substituted. The 
firm should (A) evaluate the agreements governing these services to 
determine whether there are any that could be terminated despite 
continued performance upon the parent's bankruptcy filing, and (B) 
update contracts to incorporate appropriate terms and conditions to 
prevent automatic termination and facilitate continued provision of 
such services during resolution. Relying on entities projected to 
survive during resolution to avoid contract termination is insufficient 
to ensure continuity. In

[[Page 32867]]

the plan, the firm should document the amendment of any such agreements 
governing these services.
    Legal Obstacles Associated with Emergency Motions: The Plan should 
address legal issues associated with the implementation of the stay on 
cross-default rights described in Section 2 of the International Swaps 
and Derivatives Association 2015 Universal Resolution Stay Protocol 
(Protocol), similar provisions of any U.S. protocol,\36\ or other 
contractual provisions that comply with the Agencies' rules regarding 
stays from the exercise of cross-default rights in qualified financial 
contracts, to the extent relevant.\37\ Generally, the Protocol provides 
two primary methods of satisfying the stay conditions for covered 
agreements for which the affiliate in Chapter 11 proceedings has 
provided a credit enhancement (A) transferring all such credit 
enhancements to a Bankruptcy Bridge Company (as defined in the 
Protocol) (bridge transfer); or (B) having such affiliate remain 
obligated with respect to such credit enhancements in the Chapter 11 
proceeding (elevation).\38\ A firm must file a motion for emergency 
relief (emergency motion) seeking approval of an order to effect either 
of these alternatives on the first day of its bankruptcy case.
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    \36\ U.S. protocol has the same meaning as it does at 12 CFR 
252.85(a). See also 12 CFR 382.5(a) (including a substantively 
identical definition).
    \37\ See 12 CFR part 47, 252.81-.88, and part 382 (together, the 
``QFC stay rules''). If the firm complies with the QFC stay rules 
other than through adherence to the Protocol, the plan also should 
explain how the alternative compliance method differs from Protocol, 
how those differences affect the analysis and other expectations of 
this ``Legal Obstacles Associated with Emergency Motions'' section, 
and how the firm plans to satisfy any different conditions or 
requirements of the alternative compliance method.
    \38\ Under its terms, the Protocol also provides for the 
transfer of credit enhancements to transferees other than a 
Bankruptcy Bridge Company.
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    First-day Issues--For each alternative the firm selects, the 
resolution plan should present the firm's analysis of issues that are 
likely to be raised at the hearing on the emergency motion and its best 
arguments in support of the emergency motion. A firm should include 
supporting legal precedent and describe the evidentiary support that 
the firm would anticipate presenting to the bankruptcy court -- e.g., 
declarations or other expert testimony evidencing the solvency of 
transferred subsidiaries and that recapitalized entities have 
sufficient liquidity to perform their ongoing obligations.
    For either alternative, the firm should address all potential 
significant legal obstacles identified by the firm. For example, the 
firm should address due process arguments likely to be made by 
creditors asserting that they have not had sufficient opportunity to 
respond to the emergency motion given the likelihood that a creditors' 
committee will not yet have been appointed. The firm also should 
consider, and discuss in its plan, whether it would enhance the 
successful implementation of its preferred strategy to conduct outreach 
to interested parties, such as potential creditors of the holding 
company and the bankruptcy bar, regarding the strategy.
    If the firm chooses the bridge transfer alternative, its analysis 
and arguments should address at a minimum the following potential 
issues: (A) the legal basis for transferring the parent holding 
company's equity interests in certain subsidiaries (transferred 
subsidiaries) to a Bankruptcy Bridge Company, including the basis upon 
which the Bankruptcy Bridge Company would remain obligated for credit 
enhancements; (B) the ability of the bankruptcy court to retain 
jurisdiction, issue injunctions, or take other actions to prevent third 
parties from interfering with, or making collateral attacks on (i) a 
Bankruptcy Bridge Company, (ii) its transferred subsidiaries, or (iii) 
a trust or other legal entity designed to hold all ownership interests 
in a Bankruptcy Bridge Company (new ownership entity); and (C) the role 
of the bankruptcy court in granting the emergency motion due to public 
policy concerns--e.g., to preserve financial stability. The firm should 
also provide a draft agreement (e.g., trust agreement) detailing the 
preferred post-transfer governance relationships between the bankruptcy 
estate, the new ownership entity, and the Bankruptcy Bridge Company, 
including the proposed role and powers of the bankruptcy court and 
creditors' committee. Alternative approaches to these proposed post-
transfer governance relationships should also be described, 
particularly given the strong interest that parties will have in the 
ongoing operations of the Bankruptcy Bridge Company and the likely 
absence of an appointed creditors' committee at the time of the 
hearing.
    If the firm chooses the elevation alternative, the analysis and 
arguments should address at a minimum the following potential issues: 
(A) The legal basis upon which the parent company would seek to remain 
obligated for credit enhancements; (B) the ability of the bankruptcy 
court to retain jurisdiction, issue injunctions, or take other actions 
to prevent third parties from interfering with, or making collateral 
attacks on, the parent in bankruptcy or its subsidiaries; and (C) the 
role of the bankruptcy court in granting the emergency motion due to 
public policy concerns--e.g., to preserve financial stability.
    Regulatory Implications--The plan should include a detailed 
explanation of the steps the firm would take to ensure that key 
domestic and foreign authorities would support, or not object to, the 
emergency motion (including specifying the expected approvals or 
forbearances and the requisite format--i.e., formal, affirmative 
statements of support or, alternatively, ``non-objections''). The 
potential impact on the firm's preferred resolution strategy if a 
specific approval or forbearance cannot be timely obtained should also 
be detailed.
    Contingencies if Preferred Structure Fails--The plan should 
consider contingency arrangements in the event the bankruptcy court 
does not grant the emergency motion--e.g., whether alternative relief 
could satisfy the Transfer Conditions and/or U.S. Parent debtor-in-
possession (DIP) Conditions of the Protocol; \39\ the extent to which 
action upon certain aspects of the emergency motion may be deferred by 
the bankruptcy court without interfering with the resolution; and 
whether, if the credit-enhancement-related protections are not 
satisfied, there are alternative strategies to prevent the closeout of 
qualified financial contracts with credit enhancements (or reduce such 
counterparties' incentives to closeout) and the feasibility of the 
alternative(s).
---------------------------------------------------------------------------

    \39\ See Protocol sections 2(b)(ii) and (iii) and related 
definitions.
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    Format--If the firm analyzed and addressed an issue noted in this 
section in a prior plan submission, the plan may incorporate this 
analysis and arguments and should build upon it to at least the extent 
required above. A bankruptcy playbook, which includes a sample 
emergency motion and draft documents setting forth the post-transfer 
governance terms substantially in the form they would be presented to 
the bankruptcy court, is an appropriate vehicle for detailing the 
issues outlined in this section. In preparing analysis of these issues, 
the firm may consult with law firms and other experts on these matters. 
The Agencies do not object to appropriate collaboration among firms, 
including through trade organizations and with the academic community 
and bankruptcy bar, to develop analysis of common legal challenges and 
available mitigants.

[[Page 32868]]

VI. LEGAL ENTITY RATIONALIZATION AND SEPARABILITY

    Legal Entity Rationalization Criteria (LER Criteria): A firm should 
develop and implement legal entity rationalization criteria that 
support the firm's preferred resolution strategy and minimize risk to 
U.S. financial stability in the event of the firm's failure. LER 
Criteria should consider the best alignment of legal entities and 
business lines to improve the firm's resolvability under different 
market conditions. LER Criteria should govern the firm's corporate 
structure and arrangements between legal entities in a way that 
facilitates the firm's resolvability as its activities, technology, 
business models, or geographic footprint change over time.
    Specifically, application of the criteria should:
    (A) Facilitate the recapitalization and liquidity support of 
material entities, as required by the firm's resolution strategy. Such 
criteria should include clean lines of ownership, minimal use of 
multiple intermediate holding companies, and clean funding pathways 
between the parent and material operating entities;
    (B) Facilitate the sale, transfer, or wind-down of certain discrete 
operations within a timeframe that would meaningfully increase the 
likelihood of an orderly resolution of the firm, including provisions 
for the continuity of associated services and mitigation of financial, 
operational, and legal challenges to separation and disposition;
    (C) Adequately protect the subsidiary insured depository 
institutions from risks arising from the activities of any nonbank 
subsidiaries of the firm (other than those that are subsidiaries of an 
insured depository institution); and
    (D) Minimize complexity that could impede an orderly resolution and 
minimize redundant and dormant entities.
    These criteria should be built into the firm's ongoing process for 
creating, maintaining, and optimizing its structure and operations on a 
continuous basis.
    Separability: The firm should identify discrete operations that 
could be sold or transferred in resolution, which individually or in 
the aggregate would provide meaningful optionality in resolution under 
different market conditions. The actionability of those options should 
be supported by the firm's criteria and analysis required by SR Letter 
14-8.\40\ Additionally, this analysis should facilitate buyer due 
diligence and include carve-out financial statements, valuation 
analysis, and a legal risk assessment. Further, the firm should 
establish a data room to collect and refresh annually the analyses 
above, as well as other information pertinent to a potential 
divestiture of the business.
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    \40\ SR Letter 14-8, ``Consolidated Recovery Planning for 
Certain Large Domestic Bank Holding Companies'' (Sept. 25, 2014), 
available at http://www.federalreserve.gov/bankinforeg/srletters/sr1408.pdf.
---------------------------------------------------------------------------

    Within the plan, the firm should demonstrate how the firm's LER 
Criteria and implementation efforts meet the guidance above. The plan 
should also provide the separability analysis noted above. Finally, the 
plan should include a description of the firm's legal entity 
rationalization governance process.

VII. DERIVATIVES AND TRADING ACTIVITIES

Applicability.

    This section of the proposed guidance applies to Bank of America 
Corporation, Citigroup Inc., Goldman Sachs Group, Inc., JP Morgan Chase 
& Co., Morgan Stanley, and Wells Fargo & Company (each, a ``dealer 
firm'').

Booking Practices.

    A dealer firm should have booking practices commensurate with the 
size, scope, and complexity of a firm's derivatives portfolios,\41\ 
including systems capabilities to track and monitor market, credit, and 
liquidity risk transfers between entities. The following booking 
practices-related capabilities should be addressed in a dealer firm's 
resolution plan:
---------------------------------------------------------------------------

    \41\ A firm's derivatives portfolios include its derivatives 
positions and linked non-derivatives trading positions.
---------------------------------------------------------------------------

    Derivatives booking framework. A dealer firm should have a 
comprehensive booking model framework that articulates the principles, 
rationales, and approach to implementing its firm-wide booking 
practices. The framework and its underlying components should be 
documented and adequately supported by internal controls (e.g., 
procedures, systems, and processes). Taken together, the derivatives 
booking framework and its components should provide transparency with 
respect to (i) what is being booked (e.g., product/counterparty), (ii) 
where it is being booked (e.g., legal entity/geography), (iii) by whom 
it is booked (e.g., business/trading desk); (iv) why it is booked that 
way (e.g., drivers/rationales); and (v) what controls are in place to 
monitor and manage those practices (e.g., governance/information 
systems) \42\. The dealer firm's resolution plan should include 
detailed descriptions of the framework and each of its material 
components. In particular, a dealer firm's resolution plan should 
include descriptions of the documented booking models covering its 
firm-wide derivatives portfolio.\43\ The descriptions should provide 
clarity with respect to the underlying trade flows (e.g., the mapping 
of trade flows based on multiple trade characteristics as decision 
points that determine on which entity a trade is booked, if risk is 
transferred, and at which entity that risk is subsequently managed). 
For example, a firm may choose to incorporate decision trees that 
depict the multiple trade flows within each documented booking 
model.\44\ Furthermore, a dealer firm's resolution plan should describe 
its end-to-end trade booking and reporting processes, including a 
description of the current scope of automation (e.g., automated trade 
flows and detective monitoring) for the systems controls applied to its 
documented booking models. The plan should also discuss why the firm 
believes its current (or planned) scope of automation is sufficient for 
managing its derivatives activities and executing its preferred 
resolution strategy.\45\
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    \42\ The description of controls should include any components 
of the firm-wide market, credit, and liquidity risk management 
framework that are material to the management of its derivatives 
practices.
    \43\ The firm should at least document booking models that, in 
the aggregate, represent the vast majority of the firm's derivatives 
transactions, e.g., booking models that represent no less than 95% 
of a dealer firm's derivatives transactions measured by firm-wide 
derivatives notional and by firm-wide gross market value of 
derivatives. Presumably, each asset class/product would have a 
booking model that is a function of the firm's regulatory and risk 
management requirements, client's preference, and regulatory 
requirements specifically for the underlying asset class, and other 
transaction related considerations.
    \44\ Some firms use trader mandates or similar controls to 
constrain the potential trading strategies that can be pursued by a 
business and to monitor the permissibility of booking activity. 
However, the mapping of trader mandates alone, especially those 
mandates that grant broad permissibility, may not provide sufficient 
distinction between booking model trade flows.
    \45\ Effective preventative (up-front) and detective (post-
booking) controls embedded in a dealer firm's derivatives booking 
processes can help avoid and/or timely remediate trades that do not 
align with a documented booking model or related risk limits. Firms 
typically use a combination of manual and automated control 
functions. Although automation may not be best suited for all 
control functions, as compared to manual methods it can improve 
consistency and traceability with respect to derivatives booking 
practices. Nonetheless, non-automated methods can also be effective 
when supported by other internal controls (e.g., robust detective 
monitoring and escalation protocols).

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[[Page 32869]]

    Derivatives entity analysis and reporting. A dealer firm should 
have the ability to identify, assess, and report on each of its 
entities (material and non-material) with derivatives portfolios (a 
``derivatives entity''). First, the firm's resolution plan should 
describe its method (that may include both qualitative and quantitative 
criteria) for evaluating the significance of each derivatives entity 
both with respect to the firm's current activities and to its preferred 
resolution strategy.\46\ Second, a dealer firm's resolution plan should 
demonstrate (including through illustrative samples) its ability to 
readily generate current derivatives entity profiles that (i) cover all 
derivatives entities, (ii) are reportable in a consistent manner, and 
(iii) include information regarding current legal ownership structure, 
business activities/volume, and risk profile (including applicable risk 
limits).
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    \46\ The firm should leverage any existing methods and criteria 
it uses for other entity assessments (e.g., legal entity 
rationalization and/or the pre-positioning of internal loss-
absorbing resources). The firm's method for determining the 
significance of derivatives entities is allowed to diverge from the 
parameters for material entity designation under the Resolution Plan 
Rule (i.e., entities significant to the activities of a critical 
operation or core business line) but should be adequately supported 
and any differences should be explained.
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Inter-Affiliate Risk Monitoring and Controls.

    A dealer firm should be able to assess how the management of inter-
affiliate risks can be affected in resolution, including the potential 
disruption in the risk transfers of trades between affiliate entities. 
Therefore, a dealer firm should have capabilities to provide timely 
transparency into the management of risk transfers between affiliates 
by maintaining an inter-affiliate market risk framework, consisting of 
at least the following two components \47\:
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    \47\ The inter-affiliate market risk framework is a supplement 
to the firm's systems capabilities to track and monitor market, 
credit, and liquidity risk transfers between entities.
---------------------------------------------------------------------------

    1. A method for measuring, monitoring, and reporting the market 
risk exposures for a given material derivatives entity resulting from 
the termination of a specific counterparty or a set of counterparties 
(e.g., all trades with a specific affiliate or with all affiliates in a 
specific jurisdiction) \48\; and
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    \48\ Firms may use industry market risk measures such as 
statistical risk measures (e.g., VaR or SVaR) or other risk measures 
(e.g., worst case scenario or stress test).
---------------------------------------------------------------------------

    2. A method for identifying, estimating associated costs of, and 
evaluating the effectiveness of, a re-hedge strategy in resolution put 
on by the same material derivatives entity.\49\
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    \49\ A dealer firm's method may include an approach to 
identifying the risk factors and risk sensitivities, hedging 
instruments, and risk limits a derivatives entity would employ in 
its re-hedge strategy, and the quantification of any estimated basis 
risk that would result from hedging with only exchange-traded and 
centrally-cleared instruments in a severely adverse stress 
environment.
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    In determining the re-hedge strategy, the firm should consider 
whether the instruments used (and the risk factors and risk sensitives 
controlled for) are sufficiently tied to the material derivatives 
entity's trading and risk-management practices to demonstrate its 
ability to execute the strategy in resolution using existing resources 
(e.g., existing traders and systems).
    A dealer firm's resolution plan should describe and demonstrate its 
inter-affiliate market risk framework (discussed above). In addition, 
the firm's plan should provide detailed descriptions of its compression 
strategies used for executing its preferred strategy and how those 
strategies would differ from those used currently to manage its inter-
affiliate derivatives activities. The plan should also include detailed 
descriptions of the firm's compression capabilities, the associated 
risks, and obstacles in resolution.

Portfolio Segmentation and Forecasting.

    A dealer firm should have the capabilities to produce analysis that 
reflects derivatives portfolio segmentation and differentiation of 
assumptions taking into account trade-level characteristics. More 
specifically, a dealer firm should have the systems capabilities that 
would allow it to produce a spectrum of derivatives portfolio 
segmentation analysis using multiple segmentation dimensions, including 
(1) legal entity (and material entities that are branches), (2) trading 
desk and/or product, (3) cleared vs. clearable vs. non-clearable 
trades, (4) counterparty type, (5) currency, (6) maturity, (7) level of 
collateralization, and (8) netting set.\50\ A dealer firm should also 
have the capabilities to segment and analyze the full contractual 
maturity (run-off) profile of its external and inter-affiliate 
derivatives portfolios. The dealer firm's resolution plan should 
describe and demonstrate the firm's ability to segment and analyze its 
firm-wide derivatives portfolio using the relevant segmentation 
dimensions and to report the results of such segmentation and analysis. 
In addition, the dealer firm's resolution plan should address the 
following segmentation and forecasting related capabilities:
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    \50\ The enumerated segmentation dimensions represent a minimum 
set of characteristics for differentiation of derivatives portfolios 
but are not intended as an exhaustive list of relevant dimensions. 
With respect to any product/asset class, a firm may have reasons for 
not capturing data on (or not using) one or more of the enumerated 
segmentation dimensions, but those reasons should be explained.
---------------------------------------------------------------------------

    ``Ease of exit'' position analysis. A dealer firm should have, and 
its resolution plan should describe and demonstrate, a method and 
supporting systems capabilities for categorizing and ranking the ease 
of exit for its derivatives positions based on a set of well-defined 
and consistently applied segmentation criteria. These capabilities 
should cover the firm-wide derivatives portfolio and the resulting 
categories should represent a range in degree of difficulty (e.g., from 
easiest to most difficult to exit). The segmentation criteria should, 
at a minimum, reflect characteristics \51\ that the firm believes could 
affect the level of financial incentive and operational effort required 
to facilitate the exit of derivatives portfolios (e.g., to motivate a 
potential step-in party to agree to the novation or an existing 
counterparty to bilaterally agree to a termination). Dealer firms 
should consider this methodology when separately identifying and 
analyzing the population of derivatives positions that it will include 
in the potential residual portfolio under the firm's preferred 
resolution strategy (discussed below).
---------------------------------------------------------------------------

    \51\ Examples of characteristics that may affect the level of 
financial incentive and operational effort could include: product, 
size, clearability, currency, maturity, level of collateralization, 
and other risk characteristics.
---------------------------------------------------------------------------

    Application of exit cost methodology. Each dealer firm should have 
a methodology for forecasting the cost and liquidity needed to exit 
positions (e.g., terminate/tear-up, sell, novate, and compress), and 
the operational resources related to those exits, under the specific 
scenario adopted in the firm's preferred resolution strategy. To help 
preserve sufficient optionality with respect to managing and de-risking 
its derivatives portfolios in a resolution, a dealer firm should have 
the systems capabilities to apply its exit cost methodology to its 
firm-wide derivatives portfolio, at the segmentation levels the firm 
would likely apply to exit the particular positions (e.g., valuation 
segment level). The dealer firm's plan should provide detailed 
descriptions of the forecasting methodology (inclusive of any challenge 
and validation processes) and data systems and reporting capabilities. 
The firm should also describe and demonstrate the application of the 
exit cost method and systems capabilities to the firm-wide derivatives 
portfolio.

[[Page 32870]]

    Analysis of operational capacity. In resolution, a dealer firm 
should have the capabilities to forecast the incremental operational 
needs and expenses related to executing specific aspects of its 
preferred resolution strategy (e.g., executing timely derivatives 
portfolio novations). Therefore, a dealer firm should have, and its 
resolution plan should describe and demonstrate, the capabilities to 
assess the operational resources and forecast the costs (e.g., monthly 
expense rate) related to its current derivatives activities at an 
appropriately granular level and the incremental impact from executing 
its preferred resolution strategy.\52\ In addition, a dealer firm 
should have the ability to manage the logistical and operational 
challenges related to novating (selling) derivatives portfolios during 
a resolution, including the design and adjustment of novation packages. 
A dealer firm's resolution plan should describe its methodology and 
demonstrate its supporting systems capabilities for timely segmenting, 
packaging, and novating derivatives positions. In developing its 
methodology, a dealer firm should consider the systems capabilities 
that may be needed to reliably generate preliminary novation packages 
tailored to the risk appetites of potential step-in counterparties 
(buyers), as well as the novation portfolio profile information that 
may be most relevant to such counterparties.
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    \52\ At a minimum, a dealer firm should have separate categories 
for fixed and variable expenses. For example, more granular 
operational expenses could roll-up into categories for (i) fixed-
compensation, (ii) fixed non-compensation, and (iii) variable cost.
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    Sensitivity analysis. A dealer firm should have a method to apply 
sensitivity analyses to the key drivers of the derivatives-related 
costs and liquidity flows under its preferred resolution strategy. A 
dealer firm's resolution plan should describe its method for (i) 
evaluating the materiality of assumptions and (ii) identifying those 
assumptions (or combinations of assumptions) that constitute the key 
drivers for its forecasts of operational and financial resource needs 
under the preferred resolution strategy. In addition, using its 
preferred resolution strategy as a baseline, the dealer firm's 
resolution plan should describe and demonstrate its approach to testing 
the sensitivities of the identified key drivers and the potential 
impact on its forecasts of resource needs.\53\
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    \53\ For example, key drivers of derivatives-related costs and 
liquidity flows might include the timing of derivatives unwind, cost 
of capital-related assumptions (target ROE, discount rate, WAL, 
capital constraints, tax rate), operational cost reduction rate, and 
operational capacity for novations. Other examples of key drivers 
likely also include CCP margin flow assumptions and risk-weighted 
assets forecast assumptions.
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Prime Brokerage Customer Account Transfers.

    A dealer firm should have the operational capacity to facilitate 
the orderly transfer of prime brokerage accounts to peer prime brokers 
in periods of material financial distress and in resolution. The firm's 
plan should include an assessment of how it would transfer such 
accounts. This assessment should be informed by clients' relationships 
with other prime brokers, the use of automated and manual transaction 
processes, clients' overall long and short positions facilitated by the 
firm, and the liquidity of clients' portfolios. The assessment should 
also analyze the risks of and mitigants to the loss of customer-to-
customer internalization (e.g., the inability to fund customer longs 
with customer shorts), operational challenges, and insufficient 
staffing to effectuate the scale and speed of prime brokerage account 
transfers envisioned under the firm's preferred resolution strategy.
    In addition, a dealer firm should describe and demonstrate its 
ability to segment and analyze the quality and composition of prime 
brokerage customer account balances based on a set of well-defined and 
consistently applied segmentation criteria (e.g., size, single-prime, 
platform, use of leverage, non-rehypothecatable securities, and 
liquidity of underlying assets). The capabilities should cover the 
firm's prime brokerage customer account balances, and the resulting 
segments should represent a range in potential transfer speed (e.g., 
from fastest to longest to transfer, from most liquid to least liquid). 
The selected segmentation criteria should, at a minimum, reflect 
characteristics \54\ that the firm believes could affect the speed at 
which the client account balance would be transferred to an alternate 
prime broker.
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    \54\ For example, relevant characteristics might include: 
product, size, clearability, currency, maturity, level of 
collateralization, and other risk characteristics.
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Derivatives Stabilization and De-risking Strategy.

    A dealer firm's plan should provide a detailed analysis of the 
strategy to stabilize and de-risk its derivatives portfolios 
(``derivatives strategy'') that has been incorporated into its 
preferred resolution strategy.\55\ In developing its derivatives 
strategy, a dealer firm should apply the following assumption 
constraints:
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    \55\ Subject to the relevant constraints, a firm's derivatives 
strategy may take the form of a going-concern strategy, an 
accelerated de-risking strategy (e.g., active wind-down) or an 
alternative, third strategy so long as the firm's resolution plan 
adequately supports the execution of the chosen strategy. For 
example, a firm may choose a going-concern scenario (e.g., 
derivatives entities reestablish investment grade status and do not 
enter a wind-down) as its derivatives strategy. Likewise, a firm may 
choose to adopt a combination of going-concern and accelerated de-
risking scenarios as its derivatives strategy. For example, the 
derivatives strategy could be a stabilization scenario for the lead 
bank entity and an accelerated de-risking scenario for the broker-
dealer entities.
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     OTC derivatives market access: At or before the start of 
the resolution period, each derivatives entity should be assumed to 
lack an investment-grade credit rating (e.g., unrated or downgraded 
below investment grade). The derivatives entity should also be assumed 
to have failed to establish or reestablish investment-grade status for 
the duration of the resolution period, unless the plan provides well-
supported analysis to the contrary. As a result of the lack of 
investment grade status, it should be further assumed that the 
derivatives entity has no access to the bilateral OTC derivatives 
markets and must use exchange-traded and/or centrally-cleared 
instruments where any new hedging needs arise during the resolution 
period. Nevertheless, a dealer firm may assume the ability to engage in 
certain risk-reducing derivatives trades with bilateral OTC derivatives 
counterparties during the resolution period to facilitate novations 
with third parties and to close out inter-affiliate trades.\56\
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    \56\ A firm may engage in bilateral OTC derivatives trades with, 
for example, (i) external counterparties, to effect the novation of 
the firm's side of a derivatives contract to a new counterparty, 
bilateral OTC trades with the acquiring counterparty; and, (ii) 
inter-affiliate counterparties, where the trades with inter-
affiliate counterparties (a) reduce the credit exposure of each 
participating counterparty and (b) do not materially increase the 
market risk of any such counterparty on a standalone basis, after 
taking into account hedging with exchange-traded and centrally-
cleared instruments. The firm should demonstrate the risk-reducing 
nature of the trade on the basis of information that would be known 
to the firm at the time of the transaction.
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     Early exits (break clauses). A dealer firm should assume 
that counterparties (external or affiliates) will exercise any 
contractual termination right, consistent with any rights stayed by the 
ISDA 2015 Universal Resolution Stay protocol or other applicable 
protocols or amendments \57\, (i) that is available to the counterparty 
at or following the start

[[Page 32871]]

of the resolution period; and (ii) if exercising such right would 
economically benefit the counterparty (``counterparty-initiated 
termination'').
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    \57\ For each of the derivatives entities that have adhered to 
the Protocol, the dealer firm may assume that the protocol is in 
effect for all counterparties of that derivatives entity (except for 
any affiliated counterparty of the derivatives entity that has not 
yet adhered to the Protocol).
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     Time horizon: The duration of the resolution period should 
be between 12 and 24 months. The resolution period begins immediately 
after the parent company bankruptcy filing and extends through the 
completion of the preferred resolution strategy.
    A dealer firm's analysis of its derivatives strategy should, at a 
minimum, take into account (i) the starting profile of its derivatives 
portfolios (e.g., nature, concentration, maturity, clearability, and 
liquidity of positions); (ii) the profile and function of the 
derivatives entities during the resolution period; (iii) the means, 
challenges, and capacity for managing and de-risking its derivatives 
portfolios (e.g., method for timely segmenting, packaging, and selling 
the derivatives positions; challenges with novating less liquid 
positions; re-hedging strategy); (iv) the financial and operational 
resources required to effect the derivatives strategy; and (v) any 
potential residual portfolio (further discussed below). In addition, 
the firm's resolution plan should address the following areas in the 
analysis of its derivatives strategy:
    Forecasts of resource needs. The forecasts of capital and liquidity 
resource needs required to adequately support the firm's derivatives 
strategy should be incorporated into the firm's RCEN and RLEN estimates 
for its overall preferred resolution strategy. These include, for 
example, the costs and/or liquidity flows resulting from (i) the close-
out of OTC derivatives, (ii) the hedging of derivatives portfolios, 
(iii) the quantified losses that could be incur due to basis and other 
risks that would result from hedging with only exchange-traded and 
centrally cleared instruments in a severely adverse stress environment, 
and (iv) the operational costs.
    Potential residual derivatives portfolio. A dealer firm's 
resolution plan should include a method for estimating the composition 
of any potential residual derivatives portfolio transactions remaining 
at the end of the resolution period under its preferred resolution 
strategy. The method may be a combination of approaches (e.g., 
probabilistic and deterministic) but should demonstrate the dealer 
firm's capabilities related to portfolio segmentation (discussed 
above). The dealer firm's plan should also provide detailed 
descriptions of the trade characteristics used to identify the 
potential residual portfolio and of the resulting trades (or categories 
of trades).\58\ A dealer firm should assess the risk profile of the 
potential residual portfolio (including its anticipated size, 
composition, complexity, counterparties) and the potential counterparty 
and market impacts of non-performance on the stability of U.S. 
financial markets (e.g., on funding markets and the underlying asset 
markets and on clients and counterparties).
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    \58\ If under the firm's preferred resolution strategy, any 
derivatives portfolios are transferred during the resolution period 
by way of a line of business sale (or similar transaction), then 
those portfolios should nonetheless be included within the firm's 
potential residual portfolio analysis.
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    Non-surviving entity analysis. To the extent the preferred 
resolution strategy assumes a material derivatives entity enters its 
own resolution proceeding after the entry of the parent company into a 
bankruptcy proceeding (a ``non-surviving material derivatives 
entity''), the dealer firm should provide a detailed analysis of how 
the non-surviving material derivatives entity's resolution can be 
accomplished within a reasonable period of time and in a manner that 
substantially mitigates the risk of serious adverse effects on U.S. 
financial stability and to the orderly execution of the firm's 
preferred resolution strategy. In particular, the firm should provide 
an analysis of the potential impacts on funding markets and the 
underlying asset markets, on clients and counterparties (including 
affiliates), and on the preferred resolution strategy. If the non-
surviving material derivatives entity is located in, or provides more 
than de minimis services to clients or counterparties located in, a 
non-U.S. jurisdiction, then the analysis should also specifically 
consider potential local market impacts.

VIII. PUBLIC SECTION

    The purpose of the public section is to inform the public's 
understanding of the firm's resolution strategy and how it works.
    The public section should discuss the steps that the firm is taking 
to improve resolvability under the U.S. Bankruptcy Code. The public 
section should provide background information on each material entity 
and should be enhanced by including the firm's rationale for 
designating material entities. The public section should also discuss, 
at a high level, the firm's intra-group financial and operational 
interconnectedness (including the types of guarantees or support 
obligations in place that could impact the execution of the firm's 
strategy). There should also be a high-level discussion of the 
liquidity resources and loss-absorbing capacity of the firm.
    The discussion of strategy in the public section should broadly 
explain how the firm has addressed any deficiencies, shortcomings, and 
other key vulnerabilities that the Agencies have identified in prior 
Plan submissions. For each material entity, it should be clear how the 
strategy provides for continuity, transfer, or orderly wind-down of the 
entity and its operations. There should also be a description of the 
resulting organization upon completion of the resolution process.
    The public section may note that the resolution plan is not binding 
on a bankruptcy court or other resolution authority and that the 
proposed failure scenario and associated assumptions are hypothetical 
and do not necessarily reflect an event or events to which the firm is 
or may become subject.

    By the Board of Governors of the Federal Reserve System, June 
28, 2018.
Ann E. Misback,
Secretary of the Board.
    Dated at Washington, DC on June 28, 2018.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Valerie Jean Best,
Assistant Executive Secretary.
[FR Doc. 2018-15066 Filed 7-13-18; 8:45 am]
 BILLING CODE P