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TCH Files Joint-Trades Letter Responding to FDIC NPR Restricting Terms of QFCs

 The Clearing House (TCH), along with SIFMA, the ABA, the FSF, the FSR, and the IIB commented on an FDIC NPR relating to restrictions on the terms of QFCs entered into by state savings associations and state nonmember banks (FSIs) that are part of U.S. banking organizations identified as G-SIBs or the U.S. operations of FBOs that are G-SIBs. The NPR corresponds to recent proposed rules promulgated by the Fed and OCC, which the Associations generally support. The Associations believe that each comment in the August 2016 Comment Letter made with respect to the Fed Rules is equally applicable to the FDIC’s NPR. As a result, the Associations hereby make those same comments to the FDIC with respect to the NPR. With that said, the Associations recommend four additional modifications to those proposed in the August comment letter: (i) clarify that the implementation timeline for the NPR will be harmonized with the implementation timeline for both the Fed Rules and the OCC Rules; (ii) clarify that subsidiaries of Covered FSIs will be covered by the NPR and not by the Fed Rules; (iii) clarify that the standards and processes set forth for approving alternative enhanced creditor protection conditions are consistent and harmonized as among the FDIC, the OCC and the Federal Reserve; and (iv) clarify that the applicability of the overrides of transfer restrictions on affiliate credit enhancements will be consistent across all three rules.