For purposes of this subpart:
Central counterparty (CCP) has the same meaning as in section 217.2 of the Board’s Regulation
Q (12 CFR 217.2).
Chapter 11
proceeding means a proceeding under Chapter 11 of Title 11, United
States Code (11 U.S.C. 1101-74).
Consolidated affiliate means an affiliate of another company
that
(1) Either consolidates the
other company, or is consolidated by the other company, on financial
statements prepared in accordance with U.S. Generally Accepted Accounting
Principles, the International Financial Reporting Standards, or other
similar standards;
(2)
Is, along with the other company, consolidated with a third company
on a financial statement prepared in accordance with principles or
standards referenced in paragraph (1) of this definition; or
(3) For a company that is not
subject to principles or standards referenced in paragraph (1), if consolidation
as described in paragraph (1) or (2) of this definition would have
occurred if such principles or standards had applied.
Default right
(1) Means, with respect to a QFC, any:
(i) Right of a party, whether contractual or otherwise (including,
without limitation, rights incorporated by reference to any other
contract, agreement, or document, and rights afforded by statute,
civil code, regulation, and common law), to liquidate, terminate,
cancel, rescind, or accelerate such agreement or transactions thereunder,
set off or net amounts owing in respect thereto (except rights related
to same-day payment netting), exercise remedies in respect of collateral
or other credit support or property related thereto (including the
purchase and sale of property), demand payment or delivery thereunder
or in respect thereof (other than a right or operation of a contractual
provision arising solely from a change in the value of collateral
or margin or a change in the amount of an economic exposure), suspend,
delay, or defer payment or performance thereunder, or modify the obligations
of a party thereunder, or any similar rights; and
(ii) Right or contractual provision
that alters the amount of collateral or margin that must be provided
with respect to an exposure thereunder, including by altering any
initial amount, threshold amount, variation margin, minimum transfer
amount, the margin value of collateral, or any similar amount, that
entitles a party to demand the return of any collateral or margin
transferred by it to the other party or a custodian or that modifies
a transferee’s right to reuse collateral or margin (if such right
previously existed), or any similar rights, in each case, other than
a right or operation of a contractual provision arising solely from
a change in the value of collateral or margin or a change in the amount
of an economic exposure;
(2) With respect to section 252.84, does
not include any right under a contract that allows a party to terminate
the contract on demand or at its option at a specified time, or from
time to time, without the need to show cause.
Excluded bank:
(1) Means a national bank, a Federal savings
association, a Federal branch, a Federal agency, or an FSI that is
exempted from the scope of this subpart pursuant to paragraph (b)(2)
or (b)(3) of section 252.82;
(2) Does not include any entity described
in paragraph (1) of this definition that is owned pursuant to section
3(a)(A)(ii) of the Bank Holding Company Act (12 U.S.C. 1842(a)(A)(ii));
is owned by a depository institution in satisfaction of debt previously
contracted in good faith; is a portfolio concern, as defined under
13 CFR 107.50, that is controlled by a small business investment company,
as defined in section 103(3) of the Small Business Investment Act
of 1958 (15 U.S.C. 662); is owned pursuant to paragraph (11) of section
5136 of the Revised Statutes of the United States (12 U.S.C. 24);
or is a DPC branch subsidiary.
FDI Act proceeding means a proceeding in which
the Federal Deposit Insurance Corporation is appointed as conservator
or receiver under section 11 of the Federal Deposit Insurance Act
(12 U.S.C. 1821).
FDI Act stay
period means, in connection with an FDI Act proceeding, the period
of time during which a party to a QFC with a party that is subject
to an FDI Act proceeding may not exercise any right that the party
that is not subject to an FDI Act proceeding has to terminate, liquidate,
or net such QFC, in accordance with section 11(e) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(e)) and any implementing regulations.
Financial counterparty means
a person that is:
(1) (i) A bank
holding company or an affiliate thereof; a savings and loan holding
company as defined in section 10(n) of the Home Owners’ Loan Act (12
U.S.C. 1467a(n)); a U.S. intermediate holding company that is established
or designated for purposes of compliance with this part; or a nonbank
financial company supervised by the Board;
(ii) A depository institution as defined
in section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c));
an organization that is organized under the laws of a foreign country
and that engages directly in the business of banking outside the United
States; a Federal credit union or State credit union as defined in
section 2 of the Federal Credit Union Act (12 U.S.C. 1752(1) &
(6)); an institution that functions solely in a trust or fiduciary
capacity as described in section 2(c)(2)(D) of the Bank Holding Company
Act (12 U.S.C. 1841(c)(2)(D)); an industrial loan company, an industrial
bank, or other similar institution described in section 2(c)(2)(H)
of the Bank Holding Company Act (12 U.S.C. 1841(c)(2)(H));
(iii) An entity that is
state-licensed or registered as:
(A) A credit or lending entity,
including a finance company; money lender; installment lender; consumer
lender or lending company; mortgage lender, broker, or bank; motor
vehicle title pledge lender; payday or deferred deposit lender; premium
finance company; commercial finance or lending company; or commercial
mortgage company; except entities registered or licensed solely on
account of financing the entity’s direct sales of goods or services
to customers;
(B) A money
services business, including a check casher; money transmitter; currency
dealer or exchange; or money order or traveler’s check issuer;
(iv)
A regulated entity as defined in section 1303(20) of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992, as amended
(12 U.S.C. 4502(20)) or any entity for which the Federal Housing Finance
Agency or its successor is the primary federal regulator;
(v) Any institution chartered
in accordance with the Farm Credit Act of 1971, as amended, 12 U.S.C.
2002 et seq., that is regulated by the Farm Credit Administration;
(vi) Any entity registered
with the Commodity Futures Trading Commission as a swap dealer or
major swap participant pursuant to the Commodity Exchange Act of 1936
(7 U.S.C. 1 et seq.), or an entity that is registered with
the U.S. Securities and Exchange Commission as a security-based swap
dealer or a major security-based swap participant pursuant to the
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.);
(vii) A securities
holding company, with the meaning specified in section 618 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C.
1850a); a broker or dealer as defined in sections 3(a)(4) and 3(a)(5)
of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)-(5));
an investment adviser as defined in section 202(a) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b-2(a)); an investment company registered
with the U.S. Securities and Exchange Commission under the Investment
Company Act of 1940 (15 U.S.C. 80a-1 et seq.); or a company
that has elected to be regulated as a business development company
pursuant to section 54(a) of the Investment Company Act of 1940 (15
U.S.C. 80a-53(a));
(viii) A private fund as defined in section 202(a) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b-2(a)); an entity that would be
an investment company under section 3 of the Investment Company Act
of 1940 (15 U.S.C. 80a-3) but for section 3(c)(5)(C); or an entity
that is deemed not to be an investment company under section 3 of
the Investment Company Act of 1940 pursuant to Investment Company
Act Rule 3a-7 (17 CFR 270.3a-7) of the U.S. Securities and Exchange
Commission;
(ix) A commodity
pool, a commodity pool operator, or a commodity trading advisor as
defined, respectively, in sections 1a(10), 1a(11), and 1a(12) of the
Commodity Exchange Act of 1936 (7 U.S.C. 1a(10), 1a(11), and 1a(12));
a floor broker, a floor trader, or introducing broker as defined,
respectively, in sections 1a(22), 1a(23) and 1a(31) of the Commodity
Exchange Act of 1936 (7 U.S.C. 1a(22), 1a(23), and 1a(31)); or a futures
commission merchant as defined in section 1a(28) of the Commodity
Exchange Act of 1936 (7 U.S.C. 1a(28));
(x) An employee benefit plan as defined
in paragraphs (3) and (32) of section 3 of the Employee Retirement
Income and Security Act of 1974 (29 U.S.C. 1002);
(xi) An entity that is organized as
an insurance company, primarily engaged in writing insurance or reinsuring
risks underwritten by insurance companies, or is subject to supervision
as such by a State insurance regulator or foreign insurance regulator;
or
(xii) An entity
that would be a financial counterparty described in paragraphs (1)(i)-(xi)
of this definition, if the entity were organized under the laws of
the United States or any state thereof.
(2) The term “financial counterparty” does
not include any counterparty that is:
(i) A sovereign entity;
(ii) A multilateral
development bank; or
(iii) The Bank for International Settlements.
Financial market utility (FMU) means any person, regardless of the jurisdiction in which the person
is located or organized, 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 the person, but does not include:
(1) Designated contract markets, registered
futures associations, swap data repositories, and swap execution facilities
registered under the Commodity Exchange Act (7 U.S.C. 1 et seq.), or national securities exchanges, national securities associations,
alternative trading systems, security-based swap data repositories,
and swap execution facilities registered under the Securities Exchange
Act of 1934 (15 U.S.C. 78a et seq.), solely by reason of their
providing facilities for comparison of data respecting the terms of
settlement of securities or futures transactions effected on such
exchange or by means of any electronic system operated or controlled
by such entities, provided that the exclusions in this clause apply
only with respect to the activities that require the entity to be
so registered; or
(2)
Any broker, dealer, transfer agent, or investment company, or any
futures commission merchant, introducing broker, commodity trading
advisor, or commodity pool operator, solely by reason of functions
performed by such institution as part of brokerage, dealing, transfer
agency, or investment company activities, or solely by reason of acting
on behalf of a FMU or a participant therein in connection with the
furnishing by the FMU of services to its participants or the use of
services of the FMU by its participants, provided that services performed
by such institution do not constitute critical risk management or
processing functions of the FMU.
FSI means a state savings association or state
nonmember bank (as the terms are defined in section 3 of the Federal
Deposit Insurance Act, 12 U.S.C. 1813).
Investment advisory contract means any contract
or agreement whereby a person agrees to act as investment adviser
to or to manage any investment or trading account of another person.
Master agreement means a QFC
of the type set forth in sections 210(c)(8)(D)(ii)(XI), (iii)(IX),
(iv)(IV), (v)(V), or (vi)(V) of Title II of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (12 U.S.C. 5390(c)(8)(D)(ii)(XI),
(iii)(IX), (iv)(IV), (v)(V), or (vi)(V)) or a master agreement that
the Federal Deposit Insurance Corporation determines by regulation
is a QFC pursuant to section 210(c)(8)(D)(i) of Title II of the act
(12 U.S.C. 5390(c)(8)(D)(i)).
Person has the same meaning as in 12 CFR 225.2.
Qualified financial contract (QFC) has the same
meaning as in section 210(c)(8)(D) of Title II of the Dodd-Frank Wall
Street Reform and Consumer Protection Act (12 U.S.C. 5390(c)(8)(D)).
Retail customer or counterparty has the same meaning as in section 249.3 of the Board’s Regulation
WW (12 CFR 249.3).
Small financial
institution means a company that:
(1) Is organized as a bank, as defined
in section 3(a) of the Federal Deposit Insurance Act, the deposits
of which are insured by the Federal Deposit Insurance Corporation;
a savings association, as defined in section 3(b) of the Federal Deposit
Insurance Act, the deposits of which are insured by the Federal Deposit
Insurance Corporation; a farm credit system institution chartered
under the Farm Credit Act of 1971; or an insured Federal credit union
or State-chartered credit union under the Federal Credit Union Act;
and
(2) Has total assets
of $10,000,000,000 or less on the last day of the company’s most recent
fiscal year.
U.S.
special resolution regimes means the Federal Deposit Insurance
Act (12 U.S.C. 1811-1835a) and regulations promulgated thereunder
and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection
Act (12 U.S.C. 5381-5394) and regulations promulgated thereunder.
