The agency’s action clarifies rules regarding account withdrawals from collective investment funds and allows for an extended withdrawal period to ease the impact of the COVID-19 pandemic crisis.
The Office of the Comptroller of the Currency announced it has issued an interim final rule amending requirements governing the administration of collective investment funds (CIF) to allow a bank or federal savings association to extend the period for withdrawals, subject to OCC approval and compliance with certain specified conditions. The interim final rule takes effect upon publication in the Federal Register, and comments must be received within 30 days thereafter.
Current OCC regulations permit a national bank or federal savings association administering a CIF that is invested primarily in real estate or other assets that are not readily marketable to require a prior notice period of up to one year for withdrawals from the fund. The interim final rule codifies this standard withdrawal period and also creates a limited exception that allows a bank or federal savings association, with OCC approval, to withdraw an account from the CIF for an additional year, with opportunities for further extensions, if certain conditions are met. According to the OCC, the exception is intended to enable a bank to preserve the value of the CIF’s assets for the benefit of fund participants during unanticipated and severe market conditions, such as those resulting from the current coronavirus crisis.
MainStory: TopStory BankingOperations Covid19 PrudentialRegulation
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