The Treasury Department is proposing to extend the compliance dates of the Qualified Financial Contract (QFC) recordkeeping requirements, adopted last year. The Secretary to the Treasury, in consultation with the Federal Deposit Insurance Corporation, is proposing a six-month extension of the compliance dates in the regulation. The first of these tiered compliance dates is in June 2018. The need for the extensions was attributed to the number of pending exemption requests as well as "the Administration’s general policy of alleviating unnecessary regulatory burdens." Comments are requested on the question of whether six months is sufficient as an extension, and whether the extension should apply only to those entities with a June 23, 2018, compliance date. Comments are due by Jan. 29, 2018.
The QFC recordkeeping requirements of the Dodd–Frank Act require financial companies to maintain records to assist the FDIC as receiver for a covered financial company. The rule was finalized on Dec. 30, 2016 (see Banking and Finance Law Daily, Oct. 28, 2016).
Under the regulation, the Secretary of the Treasury may grant conditional or unconditional exemptions from the regulation’s requirements after receiving a recommendation from the FDIC. According to the notice, since the regulation became effective, the Treasury Secretary, the FDIC, and the primary financial regulatory agencies have received requests for exemptions from the requirements of the regulation for certain types of records entities within a corporate group and certain types of QFCs. These exemption requests are currently subject to review by the Secretary, the FDIC, and the primary financial regulatory agencies.
The extension was proposed because Treasury has concluded that it "would impose an unnecessary burden on records entities to require their compliance with the regulation before the scope of their recordkeeping responsibilities is determined."
The Treasury Secretary estimates that the extension will allow sufficient time for the FDIC, in consultation with the primary financial regulatory agencies, to formulate recommendations to the Secretary and for the Secretary to make a determination as to the exemption requests.
The notice will be published in the Federal Register on Dec. 28, 2017.
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