(a) Exclusion of QFCs with FMUs. Notwithstanding section 252.82,
a covered entity is not required to conform to the requirements of
this subpart a covered QFC to which:
(1) A CCP is party; or
(2) Each party (other than the covered
entity) is an FMU.
(b) Exclusion of certain excluded bank QFCs. If a covered QFC is also a covered QFC under parts 47 or 382 of
this title that an affiliate of the covered entity is also required
to conform pursuant to parts 47 or 382 of this title and the covered
entity is:
(1) The affiliate credit
enhancement provider with respect to the covered QFC, then the covered
entity is required to conform the credit enhancement to the requirements
of this subpart but is not required to conform the direct QFC to the
requirements of this subpart; or
(2) The direct party to which the excluded
bank is the affiliate credit enhancement provider, then the covered
entity is required to conform the direct QFC to the requirements of
this subpart but is not required to conform the credit enhancement
to the requirements of this subpart.
(c) Exclusion of certain contracts. Notwithstanding
section 252.82, a covered entity is not required to conform the following
types of contracts or agreements to the requirements of this subpart:
(1) An investment advisory contract that:
(i) Is with a retail customer or counterparty;
(ii) Does not explicitly restrict the
transfer of the contract (or any QFC entered pursuant thereto or governed
thereby, or any interest or obligation in or under, or any property
securing, any such QFC or the contract) from the covered entity except
as necessary to comply with section 205(a)(2) of the Investment Advisers
Act of 1940 (15 U.S.C. 80b-5(a)(2)); and
(iii) Does not explicitly provide a
default right with respect to the contract or any QFC entered pursuant
thereto or governed thereby.
(2) A warrant that:
(i) Evidences
a right to subscribe to or otherwise acquire a security of the covered
entity or an affiliate of the covered entity; and
(ii) Was issued prior to November 13,
2017.
(d) Exemption by order. The Board may exempt
by order one or more covered entities from conforming one or more contracts
or types of contracts to one or more of the requirements of this subpart
after considering:
(1) The potential impact of the exemption
on the ability of the covered entity(ies), or affiliates of the covered
entity(ies), to be resolved in a rapid and orderly manner in the event
of the financial distress or failure of the entity that is required
to submit a resolution plan;
(2) The burden the exemption would relieve;
and
(3) Any other factor
the Board deems relevant.
