(a) Identification
of critical operations by covered companies.
(1) Process and
methodology required.
(i) Each biennial filer and triennial
full filer shall establish and implement a process designed to identify
each of its critical operations. After July 1, 2022, each triennial
reduced filer that has any identified critical operation shall establish
and implement a process designed to identify each of its critical
operations. The scale of the process must be appropriate to the nature,
size, complexity, and scope of the covered company’s operations. The
covered company must review its process periodically and update it
as necessary to ensure its continued effectiveness. The covered company
shall describe its process and how it is applied as part of its corporate
governance relating to resolution planning under section 243.5(d)(1).
The covered company must conduct the process described in this paragraph
(a)(1) sufficiently in advance of its next resolution plan submission
so that the covered company is prepared to submit the information
required under sections 243.5 through 243.7 for each identified critical
operation.
(ii) The process required
under paragraph (a)(1)(i) of this section must include a methodology
for evaluating the covered company’s participation in activities and
markets that may be critical to the financial stability of the United
States. The methodology must be designed, taking into account the
nature, size, complexity, and scope of the covered company’s operations,
to identify and assess:
(A) The markets and activities in which the covered company participates
or has operations;
(B) The significance
of those markets and activities with respect to the financial stability
of the United States; and
(C) The significance
of the covered company as a provider or other participant in those
markets and activities.
(2) Waiver requests. A covered company that has previously submitted a resolution plan
under this part may request a waiver of the requirement to have a
process and methodology under paragraph (a)(1) of this section by
submitting a waiver request in accordance with this paragraph (a)(2)
if the covered company does not have an identified critical operation
as of the date it submits the waiver request.
(i) Each waiver request shall be divided
into a public section and a confidential section. A covered company
shall segregate and separately identify the public section from the
confidential section. A covered company shall include in the confidential
section of a waiver request its rationale for why a waiver of the
requirement would be appropriate, including an explanation of why
the process and methodology are not likely to identify any critical
operation given its business model, operations, and organizational
structure. A covered company shall describe in the public section
of a waiver request that it is seeking to waive the requirement.
(ii) Any waiver request must be
made in writing no later than 18 months before the date by which the
covered company is required to submit its next resolution plan. Notwithstanding
the foregoing, with respect to any resolution plan that a covered
company is required to submit on or before July 1, 2021, any waiver
request must be made in writing no later than 17 months before that
date.
(iii) The Board and Corporation
may jointly approve or deny a waiver request in their discretion.
Unless the Board and the Corporation have jointly approved a waiver
request, the waiver request will be deemed denied on the date that
is 12 months before the date by which the covered company is required
to submit the resolution plan that immediately follows submission
of the waiver request.
(iv) An
approved waiver request under this paragraph (a)(2) is effective for
the resolution plan submission that immediately follows submission
of the waiver request and for any resolution plan submitted thereafter
until, but not including, the covered company’s next full resolution
plan submission.
(3) Limited exemption. A foreign-based covered
company is exempt from the requirement to have a process and methodology
under paragraph (a)(1) of this section in connection with any requirement
to submit a resolution plan on or before July 1, 2021 if the foreign-based
covered company does not have an identified critical operation as
of the date that is 17 months before the date by which the covered company
is required to submit the resolution plan.
(b) Joint identification of critical operations
by the Board and the Corporation.
(1) The Board and the Corporation shall,
not less frequently than every six years, jointly review the operations
of covered companies to determine whether to jointly identify critical
operations of any covered company in accordance with paragraph (b)(2)
of this section, or to jointly rescind any currently effective joint
identification in accordance with paragraph (b)(3) of this section.
(2) If the Board and the Corporation
jointly identify a covered company’s operation as a critical operation,
the Board and the Corporation shall jointly notify the covered company
in writing. A covered company is not required to include the information
required under sections 243.5 through 243.7 for the identified critical
operation in any resolution plan that the covered company is required
to submit within 12 months after the joint notification unless the
operation had been identified by the covered company as a critical
operation on or before the date the Board and the Corporation jointly
notified the covered company.
(3)
The Board and the Corporation may jointly rescind a joint identification
under paragraph (b)(2) of this section by providing the covered company
with joint notice of the rescission. Upon the notification, the covered
company is not required to include the information regarding the operation
required for identified critical operations under sections 243.5 through
243.7 in any subsequent resolution plan unless:
(i) The covered company identifies the
operation as a critical operation; or
(ii) The Board and the Corporation subsequently
provide a joint notification under paragraph (b)(2) of this section
to the covered company regarding the operation.
(4) A joint notification provided by the
Board and the Corporation to a covered company before December 31,
2019 that identifies any of its operations as a critical operation
and not previously jointly rescinded is deemed to be a joint identification
under paragraph (b)(2) of this section.
(c) Request for reconsideration of jointly identified
critical operations. A covered company may request that the Board
and the Corporation reconsider a joint identification under paragraph
(b)(2) of this section in accordance with this paragraph (c).
(1) Written
request for reconsideration. The covered company must submit
a written request for reconsideration to the Board and the Corporation
that includes a clear and complete statement of all arguments and
all relevant, material information that the covered company expects
to have considered. If a covered company has previously requested
reconsideration regarding the operation, the written request must
also describe the material differences between the new request and
the most recent prior request.
(2) Timing.
(i) If a covered company submits a request
for reconsideration on or before the date that is 18 months before
the date by which it is required to submit its next resolution plan,
the Board and the Corporation will complete their reconsideration
no later than 12 months before the date by which the covered company
is required to submit its next resolution plan. Notwithstanding the
foregoing, if the Board and the Corporation jointly find that additional
information from the covered company is required to complete their
reconsideration, the Board and the Corporation will jointly request
in writing the additional information from the covered company. The
Board and the Corporation will then complete their reconsideration
no later than the later of:
(A) Ninety (90) days after receipt of all additional information
from the covered company; and
(B) Twelve
(12) months before the date by which the covered company is required
to submit its next resolution plan.
(ii) If a covered company submits a
request for reconsideration less than 18 months before the date by
which it is required to submit its next resolution plan,
the Board and the Corporation may, in their discretion, defer reconsideration
of the joint identification until after the submission of that resolution
plan, with the result that the covered company must include the identified
critical operation in that resolution plan and the Board and the Corporation
will complete their reconsideration in accordance with paragraph (c)(2)(i)
of this section as though the covered company had submitted the request
after the date by which the covered company is required to submit
that resolution plan.
(3) Joint communication following reconsideration. The Board and the Corporation will communicate jointly the results
of their reconsideration in writing to the covered company.
(d) De-identification by covered company
of self-identified critical operations. A covered company may
cease to include in its resolution plans the information required
under sections 243.5 through 243.7 regarding an operation previously
identified only by the covered company (and not also jointly by the
Board and the Corporation) as a critical operation only in accordance
with this paragraph (d).
(1) Notice of de-identification. If
a covered company ceases to identify an operation as a critical operation,
the covered company must notify the Board and the Corporation of its
de-identification. The notice must be in writing and include a clear
and complete explanation of:
(i) Why the covered company previously
identified the operation as a critical operation; and
(ii) Why the covered company no longer
identifies the operation as a critical operation.
(2) Timing. Notwithstanding a covered company’s de-identification, and unless
otherwise notified in writing jointly by the Board and the Corporation,
a covered company shall include the applicable information required
under sections 243.5 through 243.7 regarding an operation previously
identified by the covered company as a critical operation in any resolution
plan the covered company is required to submit during the period ending
12 months after the covered company notifies the Board and the Corporation
in accordance with paragraph (d)(1) of this section.
(3) No effect
on joint identifications. Neither a covered company’s de-identification
nor notice thereof under paragraph (d)(1) of this section rescinds
a joint identification made by the Board and the Corporation under
paragraph (b)(2) of this section.
