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Trades Comment on Agencies Proposed Rule Implementing Section 205 of DFA

The Clearing House Association (TCH), along with SIFMA and the FSR (Associations) commented on a proposed rulemaking issued by the FDIC and SEC which would implement Section 205 of Dodd-Frank. Section 205 contains special provisions for the orderly liquidation of certain U.S. brokers and dealers, and paragraph (h) of Section 205 requires the Agencies, in consultation with the Securities Investor Protection Corporation (SIPC), to jointly issue rules to implement Section 205. The purpose of the proposed rule is to clarify certain aspects of those special provisions. 

The letter offers general support for the proposal, noting that it provides useful clarification, but the letter also asserts that certain aspects of the proposal raise potential concerns that merit further consideration. The letter also identifies parts of the proposal that would benefit from further clarification, either through additional rulemaking or interpretative statements, in order to provide the market with greater legal certainty.