Guidance on the Effective Date of Section 716 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, 27456-27457 [2012-11326]

Agencies

• FEDERAL DEPOSIT INSURANCE CORPORATION
• FEDERAL RESERVE SYSTEM
• Office of the Comptroller of the Currency
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 77, Number 91 (Thursday, May 10, 2012)]
[Notices]
[Pages 27456-27457]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-11326]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION


Guidance on the Effective Date of Section 716 of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act

AGENCY: Office of the Comptroller of the Currency (OCC), Treasury; 
Board of Governors of the Federal Reserve System (Board); and Federal 
Deposit Insurance Corporation (FDIC).

ACTION: Notice of joint guidance.

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SUMMARY: The Office of the Comptroller of the Currency (``OCC''), Board 
of Governors of the Federal Reserve System (``Board''), and the Federal 
Deposit Insurance Corporation (``FDIC'') are issuing this guidance to 
provide clarity regarding the effective date of section 716 of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act (``Dodd-Frank 
Act'') \1\ with respect to entities for which each is the prudential 
regulator.
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    \1\ Section 716 of Public Law 111-203, 124 Stat. 1376; 15 U.S.C. 
8305.

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DATES: May 10, 2012.

FOR FURTHER INFORMATION CONTACT:

OCC: Ellen Broadman, Director, Securities and Corporate Practices 
Division (202) 874-5210, Ted Dowd, Assistant Director, Securities & 
Corporate Practices Division (202) 874-5327, or Jamey Basham, Assistant 
Director, Legislative and Regulatory Activities Division (202) 874-
5090, Office of the Comptroller of the Currency, 250 E Street SW., 
Washington, DC 20219.
Board: Christine Graham, Senior Attorney (202) 452-3005, or Christopher 
Paridon, Counsel (202) 452-3274, Legal Division; Board of Governors of 
the Federal Reserve System, 20th and C Streets NW., Washington, DC 
20551. For the deaf, hard of hearing, and speech impaired only, 
teletypewriter (TTY), (202) 263-4869.
FDIC: Thomas Hearn, Counsel (202) 898-6967, or Mark Flanigan, Counsel 
(202) 898-7426, Legal Division; Federal Deposit Insurance Corporation, 
550 17th Street NW., Washington, DC 20429. For the hearing impaired 
only, telecommunications device for the deaf TDD: 800-925-4618.

SUPPLEMENTARY INFORMATION:

Background

    Section 716 prohibits the provision of Federal assistance to any 
entity defined under that section to be a swaps entity with respect to 
any swap, security-based swap, or other activity of the swaps 
entity.\2\ ``Federal assistance'' is defined for purposes of section 
716 as ``the use of any advances from any Federal Reserve credit 
facility or discount window that is not part of a program with broad-
based eligibility under section 13(3)(A) of the Federal Reserve Act,'' 
and ``[FDIC] insurance or guarantees'' for certain purposes specified 
in section 716(b)(1).\3\
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    \2\ See, section 716(a) of the Dodd-Frank Act; 15 U.S.C. 
8305(a).
    \3\ See, section 716(b)(1) of the Dodd-Frank Act; 15 U.S.C. 
8305(b)(1).
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    The prudential regulator (as defined in the Commodity Exchange Act) 
\4\ of a swaps entity is authorized to prescribe rules implementing 
section 716 with respect to that swaps entity.\5\ The Board is the 
prudential regulator for state member banks, bank holding companies, 
savings and loan holding companies, state branches and agencies of 
foreign banks, and certain other swaps entities.\6\ In addition, the 
Board is charged with responsibility for establishing and overseeing 
the provision of credit through any Federal Reserve credit facility and 
the discount window. The FDIC is the prudential regulator for state 
nonmember banks and state savings associations.\7\ In addition, the 
FDIC is charged with insuring the deposits of banks and savings 
associations and managing the Deposit Insurance Fund. The OCC is the 
prudential regulator for national banks, federal savings associations, 
and Federal branches and agencies of foreign banks.\8\
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    \4\ Pursuant to section 711 of the Dodd-Frank Act, the term 
``prudential regulator'' as used in section 716 has the same meaning 
as in the Commodity Exchange Act. 15 U.S.C. 8301.
    \5\ Section 716(k) of the Dodd-Frank Act; 15 U.S.C. 8305(k).
    \6\ See 7 U.S.C. 1a(39)(A).
    \7\ See id. at section 1a(39)(C).
    \8\ See id. at section 1a(39)(B).
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Effective Date

    Section 716(h) provides that its general prohibition on Federal 
assistance is ``effective 2 years following the date on which this Act 
is effective.'' \9\ Section 716 is contained in Title VII of the Dodd-
Frank Act. Section 701 in Title VII provides that Title VII may be 
cited as the ``Wall Street Transparency and Accountability Act of 
2010.'' \10\ Thus, while enacted within the Dodd-Frank Act, Title VII 
is itself ``an Act,'' and references within Title VII to ``this Act'' 
should be, in context, interpreted as references to the Wall Street 
Transparency and Accountability Act of 2010, not to the broader Dodd-
Frank Act. This interpretation is supported by the fact that section 
716(m) refers specifically to the Dodd-Frank Act by name--a reference 
that would not be necessary if the reference to ``this Act'' in section 
716(h) and other provisions of the Wall Street Transparency and 
Accountability Act were intended to refer to the Dodd-Frank Act. 
Nothing in the context of subsection (m) or other provisions of

[[Page 27457]]

section 716 suggest a different reading was intended.\11\
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    \9\ See section 716(h) of the Dodd-Frank Act; 15 U.S.C. 8305(h).
    \10\ See section 701 of the Dodd-Frank Act; 15 U.S.C. 8301 note.
    \11\ Section 716(m) of the Dodd-Frank Act; 15 U.S.C. 8305(m).
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    In general, the Wall Street Transparency and Accountability Act 
became effective on July 16, 2011, which is later than the effective 
date of the Dodd-Frank Act generally. The Wall Street Transparency and 
Accountability Act has two subtitles. Both subtitles contain provisions 
that establish an effective date that is 360 days after the enactment 
of the subtitle (unless otherwise noted in that subtitle).\12\ The date 
of enactment was July 21, 2010, making the effective date of the 
subtitles comprising the Wall Street Transparency and Accountability 
Act July 16, 2011. Because section 716 specifically adopts an effective 
date that is 2 years following the effective date of the Wall Street 
Transparency and Accountability Act, section 716 will become effective 
on July 16, 2013.\13\
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    \12\ Section 754 sets forth the effective date of subtitle A of 
Title VII, and section 774 sets forth the effective date of subtitle 
B of Title VII. See 7 U.S.C. 7a note and 15 U.S.C. 77b note.
    \13\ The agencies intend to invite comment on a separate 
proposal that would establish the appropriate transition period for 
insured depository institutions pursuant to section 716(f).

Thomas J. Curry,
Comptroller of the Currency.
    By order of the Board of Governors of the Federal Reserve 
System, April 10, 2012.
Jennifer J. Johnson,
Secretary of the Board.
Federal Deposit Insurance Corporation.

    Dated at Washington, DC, this 10th day of April 2012.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2012-11326 Filed 5-9-12; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P