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Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

Financial Institution Letters

FIL-15-2016
March 4, 2016

Capital Treatment for Qualifying Collateralized Debt Obligations Backed by Trust Preferred Securities under the "Volcker Rule"

Printable Format:

FIL-15-2016 - PDF (PDF Help)

Summary:

The FDIC, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Securities and Exchange Commission and the Commodity Futures Trading Commission (the "Agencies") have issued a Frequently Asked Question (FAQ) document to clarify the capital treatment of certain Collateralized Debt Obligations backed by Trust Preferred Securities (TruPS CDO) under section 13 of the Bank Holding Company Act, which implements section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), also known as the "Volcker Rule." The Volcker Rule permits a banking entity to retain its interest in a Qualifying TruPS CDO under 12 CFR 351.16 of the interagency interim final rule.

Statement of Applicability to Institutions with Total Assets Under $1 Billion: This Financial Institution Letter is applicable to all institutions holding TruPS CDOs regardless of asset size.

Highlights:

Institutions with specific questions about the regulatory capital rules may send an email to regulatorycapital@fdic.gov.

Institutions with specific questions about the Volcker rule may send an email to capitalmarkets@fdic.gov.

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Note:

FDIC Financial Institution Letters (FILs) may be accessed from the FDIC's Web site at https://www.fdic.gov/news/news/financial/2016/.

To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.

Paper copies may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).

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