Financial Stability Oversight Council 2010 – Federal Register Recent Federal Regulation Documents

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``DFA'') gives the Financial Stability Oversight Council (the ``Council'') the authority to identify and designate as systemically important a financial market utility if the Council determines that the failure, or a disruption to the functioning, of a financial market utility could create or increase the risk of significant liquidity or credit problems spreading among financial institutions or markets and thereby threaten the stability of the financial system of the United States. The DFA generally defines a ``financial market utility'' as any person that manages or operates a multilateral system for the purpose of transferring, clearing, or settling payments, securities, or other financial transactions among financial institutions or between financial institutions and that person.\1\ The utility-like arrangements used to settle financial transactions, whether involving payments, securities, derivatives, or other similar financial instruments, are critical parts of the financial infrastructure for the economy and are integral to the soundness of the financial system and overall economic performance. The importance of these arrangements has been highlighted by the recent period of market stress. This advance notice of proposed rulemaking (ANPR) invites public comment on the criteria and analytical framework that should be applied by the Council in designating financial market utilities under the DFA.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank Act'') prohibits banking entities from engaging in proprietary trading and from maintaining certain relationships with hedge funds and private equity funds. These prohibitions, commonly known as the ``Volcker Rule,'' are contained in Section 619 of the Dodd-Frank Act. Section 619 of the Dodd-Frank Act requires the Financial Stability Oversight Council (``FSOC'') to study and make recommendations on implementing the Volcker Rule. Under Section 619, the Office of the Comptroller of the Currency (``OCC''), the Federal Deposit Insurance Corporation (``FDIC''), the Board of Governors of the Federal Reserve System (``Board''), the Securities and Exchange Commission (``SEC'') and the Commodity Futures Trading Commission (``CFTC'') must consider the recommendations of the FSOC study in developing and adopting regulations to implement the Volcker Rule. To assist the FSOC in conducting the study and formulating its recommendations, the FSOC is issuing this request for information through public comment.