88 FR 64641 September 19, 2023

Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / Notices
actions in a non-U.S. jurisdiction were not
taken, delayed, or forgone, as relevant.
IX. Public Section
SPOE & MPOE
The purpose of the public section is to
inform the public’s understanding of the
firm’s resolution strategy and how it works.
The public section should discuss the steps
that the firm is taking to improve
resolvability under the U.S. Bankruptcy
Code. The public section should provide
background information on each material
entity and should be enhanced by including
the firm’s rationale for designating material
entities. The public section should also
discuss, at a high level, the firm’s intra-group
financial and operational interconnectedness
(including the types of guarantees or support
obligations in place that could impact the
execution of the firm’s strategy).
The discussion of strategy in the public
section should broadly explain how the firm
has addressed any deficiencies,
shortcomings, and other key vulnerabilities
that the agencies have identified in prior plan
submissions. For each material entity, it
should be clear how the strategy provides for
continuity, transfer, or orderly wind-down of
the entity and its operations. There should
also be a description of the resulting
organization upon completion of the
resolution process.
The public section may note that the Plan
is not binding on a bankruptcy court or other
resolution authority and that the proposed
failure scenario and associated assumptions
are hypothetical and do not necessarily
reflect an event or events to which the firm
is or may become subject.
By order of the Board of Governors of the
Federal Reserve System.
Ann E. Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on August 29,
2023.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2023–19267 Filed 9–18–23; 8:45 am]
BILLING CODE 6210–01–6714–01–P

FEDERAL RESERVE SYSTEM
[Docket No. OP–1817]

FEDERAL DEPOSIT INSURANCE
CORPORATION

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RIN 3064–ZA38

Guidance for Resolution Plan
Submissions of Foreign Triennial Full
Filers
Board of Governors of the
Federal Reserve System (Board) and
Federal Deposit Insurance Corporation
(FDIC).
ACTION: Proposed guidance; request for
comments.
AGENCY:

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The Board and the FDIC
(together, the agencies) are inviting
comments on proposed guidance for the
2024 and subsequent resolution plan
submissions by certain foreign banking
organizations. The proposed guidance is
meant to assist these firms in
developing their resolution plans,
which are required to be submitted
pursuant to the Dodd-Frank Wall Street
Reform and Consumer Protection Act, as
amended (the Dodd-Frank Act), and the
jointly issued implementing regulation
(the Rule). The scope of application of
the proposed guidance would be
foreign-based triennial full filers
(specified firms or firms), which are
foreign-based Category II and III banking
organizations, and the guidance, if
finalized, would supersede the joint
Guidance for Resolution Plan
Submissions of Certain Foreign-Based
Covered Companies (85 FR 83557 (Dec.
22, 2020) (2020 FBO Guidance)). The
proposed guidance is based on the
agencies’ review of the specified firms’
2021 and prior resolution plan
submissions, as well as the agencies’
experiences dealing with stress events
in the international and domestic
banking systems, and would describe
the agencies’ expectations regarding
several aspects of the specified firms’
plans for an orderly resolution under
the U.S. Bankruptcy Code. The agencies
invite public comment on all aspects of
the proposed guidance.
DATES: Comments must be received by
November 30, 2023.
ADDRESSES: Interested parties are
encouraged to submit written comments
jointly to both agencies. Comments
should be directed to:
Board: You may submit comments,
identified by Docket No. OP–1817, by
any of the following methods:
• Agency Website: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Email: regs.comments@
federalreserve.gov. Include docket
number in the subject line of the
message.
• Fax: (202) 452–3819 or (202) 452–
3102.
• Mail: Ann E. Misback, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue NW, Washington,
DC 20551.
In general, all public comments will
be made available on the Board’s
website at www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm as
submitted, and will not be modified to
remove confidential, contact or any
SUMMARY:

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64641

identifiable information. Public
comments may also be viewed
electronically or in paper in Room M–
4365A, 2001 C St. NW, Washington, DC
20551, between 9:00 a.m. and 5:00 p.m.
during federal business weekdays.
FDIC: You may submit comments,
identified by RIN 3064–ZA38, by any of
the following methods:
• FDIC Website: https://
www.fdic.gov/resources/regulations/
federal-register-publications/. Follow
the instructions for submitting
comments on the FDIC’s website.
• Email: [email protected]. Include
‘‘RIN 3064–ZA38’’ on the subject line of
the message.
• Mail: James P. Sheesley, Assistant
Executive Secretary, Attention:
Comments—RIN 3064–ZA38, Federal
Deposit Insurance Corporation, 550 17th
Street NW, Washington, DC 20429.
• Hand Delivery/Courier: Comments
may be hand delivered to the guard
station at the rear of the 550 17th Street
NW building (located on F Street NW)
on business days between 7 a.m. and 5
p.m.
Public Inspection: Comments
received, including any personal
information provided, may be posted
without change to https://www.fdic.gov/
resources/regulations/federal-registerpublications/. Commenters should
submit only information that the
commenter wishes to make available
publicly. The FDIC may review, redact,
or refrain from posting all or any portion
of any comment that it may deem to be
inappropriate for publication, such as
irrelevant or obscene material. The FDIC
may post only a single representative
example of identical or substantially
identical comments, and in such cases
will generally identify the number of
identical or substantially identical
comments represented by the posted
example. All comments that have been
redacted, as well as those that have not
been posted, that contain comments on
the merits of this document will be
retained in the public comment file and
will be considered as required under all
applicable laws. All comments may be
accessible under the Freedom of
Information Act.
FOR FURTHER INFORMATION CONTACT:
Board: Catherine Tilford, Deputy
Associate Director, (202) 452–5240,
Elizabeth MacDonald, Assistant
Director, (202) 475–6316, Tudor Rus,
Lead Financial Institution Analyst, (202)
475–6359, Division of Supervision and
Regulation; or Jay Schwarz, Assistant
General Counsel, (202) 452–2970;
Andrew Hartlage, Special Counsel, (202)
452–6483; Sarah Podrygula, Senior
Attorney, (202) 912–4658; or Brian

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Federal Register / Vol. 88, No. 180 / Tuesday, September 19, 2023 / Notices

Kesten, Senior Attorney, (202) 843–
4079, Legal Division, Board of
Governors of the Federal Reserve
System, 20th Street and Constitution
Avenue NW, Washington, DC 20551.
For users of TTY–TRS, please call 711
from any telephone, anywhere in the
United States.
FDIC: Robert C. Connors, Senior
Advisor, (202) 898–3834, Division of
Complex Financial Institution
Supervision and Resolution; Celia Van
Gorder, Senior Counsel, (202) 898–6749;
Esther Rabin, Counsel, (202) 898–6860,
[email protected], Legal Division.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Overview of the Proposed Guidance
III. Paperwork Reduction Act
Appendix: Text of the Proposed Guidance

I. Background
A. The Dodd-Frank Act and the Rule

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Section 165(d) of the Dodd-Frank
Act 1 and the Rule 2 require certain
financial institutions to report
periodically to the Board and the FDIC
their plans for rapid and orderly
resolution under the U.S. Bankruptcy
Code (the Bankruptcy Code) in the event
of material financial distress or failure.
The Rule divides covered companies
into three groups of filers: (a) biennial
filers; (b) triennial full filers; and (c)
triennial reduced filers.3
Triennial full filers under the Rule are
required to file a resolution plan every
three years, alternating between full and
targeted resolution plans.4 The Rule
requires each covered company’s full
resolution plan to include, among other
things, a strategic analysis of the plan’s
components, a description of the range
of specific actions the covered company
proposes to take in resolution, and a
description of the covered company’s
organizational structure, material
entities, and interconnections and
interdependencies.5 Targeted resolution
plans are required to include a subset of
information contained in a full plan.6 In
addition, the Rule requires that all
resolution plans consist of two parts: a
confidential section that contains any
confidential supervisory and proprietary
information submitted to the agencies
and a section that the agencies make
1 12

U.S.C. 5365(d).
2 12 CFR parts 243 and 381.
3 12 CFR 243.4 and 12 CFR 381.4. The terms
‘‘covered company’’ and ‘‘triennial full filer’’ have
the meanings given in the Rule, as do other, similar
terms used throughout this proposal.
4 12 CFR 243.4(b) and 12 CFR 381.4(b).
5 12 CFR 243.5 and 12 CFR 381.5.
6 12 CFR 243.6(b) and 12 CFR 381.6(b).

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available to the public.7 Public sections
of resolution plans can be found on the
agencies’ websites.8
B. Recent Developments
Implementation of the Rule has been
an iterative process aimed at
strengthening the resolution planning
capabilities of financial institutions
subject to the Rule. To assist the
development of covered companies’
resolution planning capabilities and
plan submissions, the agencies have
provided feedback on individual plan
submissions, promulgated guidance to
certain groups of covered companies,
and issued answers to frequently asked
questions. The agencies believe that
guidance can help focus the efforts of
similarly situated covered companies to
improve their resolution capabilities
and clarify the agencies’ expectations
for those filers’ future progress. The
agencies have issued guidance to (a)
U.S. global systemically important
banks (GSIBs),9 which constitute the
biennial filer group, and (b) certain large
foreign banking organizations (FBOs)
that are triennial full filers.10 The
agencies have not, however, issued
guidance to the domestic firms and
additional FBOs that make up the
remainder of the triennial full filers.
As the agencies previously
indicated,11 they believe that it is now
appropriate to issue guidance to the
specified firms. The agencies’ review of
the 2021 targeted resolution plans
submitted by foreign-based triennial full
filers not already subject to resolution
planning guidance revealed significant
inconsistencies in the amount and
nature of information they provided on
critical informational elements required
by the Rule. In addition, some
resolution plans included optimistic
assumptions regarding the availability
of financial resources at the firm at the
time of a bankruptcy filing as well as the
ability of a firm to access financial
assistance prior to and during
resolution. The agencies believe that
future resolution plans from these firms
would benefit from guidance regarding
7 12

CFR 243.11(c) and 12 CFR 381.11(c).
public sections of resolution plans
submitted to the agencies are available at
www.federalreserve.gov/supervisionreg/resolutionplans.htm and www.fdic.gov/regulations/reform/
resplans/.
9 Guidance for § 165(d) Resolution Plan
Submissions by Domestic Covered Companies
applicable to the Eight Largest, Complex U.S.
Banking Organizations, 84 FR 1438 (Feb. 4, 2019)
(2019 GSIB Guidance).
10 Guidance for Resolution Plan Submissions of
Certain Foreign-Based Covered Companies, 85 FR
83557 (Dec. 22, 2020) (2020 FBO Guidance).
11 https://www.federalreserve.gov/newsevents/
pressreleases/bcreg20220930a.htm.
8 The

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critical informational elements required
by the Rule as well as appropriate
assumptions. In addition, the agencies’
review of 2021 targeted resolution plans
submitted by foreign-based triennial full
filers subject to the 2020 FBO Guidance
revealed opportunities for
improvements to the reliability and
timeliness of the generation and
provision of financial information as
well as liquidity- and capital-related
resolution capabilities necessary to
successfully executing these firms’ U.S.
resolution strategies. Resolution plans
from the specified firms also generally
lacked detail and clarity on how the
firm’s strategy and capabilities for a
resolution under the Rule would be
complementary to its home country
global resolution strategy.
The proposed guidance also reflects
the agencies’ recent experience with
UBS Group AG’s acquisition of Credit
Suisse Group AG (CS) and, with respect
to specified firms with large subsidiary
insured depository institutions (IDIs),
the resolutions of Silicon Valley Bank
(SVB), Signature Bank (SB), and First
Republic Bank (First Republic). The
agencies’ experience with CS illustrates
the complexities that can arise in the
case of acute stress involving large
cross-border firms and the importance
of resolution planning and coordination
with home country authorities. Like CS,
many of the specified firms are foreign
GSIBs with a large presence in the
United States, and the agencies
recognize the importance of maintaining
a comprehensive understanding of the
U.S. operations of large FBOs. While
SVB, SB, and First Republic were not
required to file resolution plans under
section 165(d) of the Dodd-Frank Act
and the Rule, the effects of their failures
illustrate that the failure of a large IDI
may have serious adverse effects on
financial stability in the United States.12
The agencies’ experience with these
three banking organizations is
particularly instructive in developing
guidance to foreign-based triennial full
filers that present a U.S. multiple point
of entry (U.S. MPOE) resolution strategy
and that have large subsidiary IDIs, to
assist their progress in developing their
resolution plans that comply with the
12 For example, the FDIC—upon the
recommendation of two-thirds of each of the board
of directors of the FDIC and the Board, as well as
a determination by the Secretary of the Treasury, in
consultation with the President—resolved SVB and
SB using the systemic risk exception to the
statutory requirement to employ the least-costly
method to resolve a failed IDI. https://
www.federalreserve.gov/newsevents/pressreleases/
monetary20230312b.htm; https://www.fdic.gov/
news/press-releases/2023/pr23017.html.

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statutory and regulatory requirements
governing IDI resolution.
C. Resolution Plan Strategy
The specified firms have adopted one
of two U.S. resolution strategies: a U.S.
single point of entry (U.S. SPOE) or U.S.
MPOE strategy. Under a U.S. SPOE
approach, only the top-tier U.S. material
entity holding company enters
bankruptcy and all U.S. material entity
subsidiaries remain operating as a going
concern. The U.S. MPOE approach
entails multiple U.S. material entities
entering separate resolution
proceedings: any top-tier U.S. material
entity holding company enters
bankruptcy; any U.S. material entity IDI
subsidiary is resolved separately under
the Federal Deposit Insurance Act of
1950, as amended (the FDI Act); and
other individual U.S. material entity
subsidiaries separately enter bankruptcy
(or another applicable resolution
regime) or are wound down. The U.S.
SPOE and U.S. MPOE resolution plan
strategies require firms to consider
different risks and require different
types of planning and development of
capabilities for the execution of the
respective strategies. For their 2021
resolution plan submissions, some of
the specified firms presented a U.S.
SPOE strategy, but most of the specified
firms presented a U.S. MPOE strategy.
The agencies do not prescribe a
specific resolution strategy for any
covered company, nor do the agencies
identify a preferred strategy. The
proposed guidance is not intended to
favor one strategy or another. Specified
filers may continue to submit resolution
plans using the resolution strategies
they believe would be most effective in
achieving an orderly resolution of their
firms, but a resolution plan must
address the key vulnerabilities and
support the underlying assumptions
required to successfully execute the
chosen resolution strategy.
With respect to the specified firms,
the Rule requires the firm’s U.S.
resolution plan to address subsidiaries,
branches, and agencies, and identified
critical operations and core business
lines, as applicable, that are domiciled
in the United States or conducted in
whole or material part in the United
States.13 To date, the resolution plans of
specified filers that have presented a
U.S. SPOE strategy have presumed entry
of the top tier U.S. intermediate holding
company (IHC) into bankruptcy, while
its material entity subsidiaries remain
open and operating. Each of the
specified firms that has presented such
an approach is required by the Board’s
13 12

CFR 243.5(a)(2) and 12 CFR 381.5(a)(2).

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Regulation YY to have a U.S. IHC under
which all non-branch U.S. entities are
organized.14 The agencies note that
some of the specified firms are not
subject to the Regulation YY
requirement to establish a U.S. IHC. The
agencies are considering whether such a
specified firm not subject to a U.S. IHC
requirement could provide for the
orderly resolution of its U.S. entities
and operations utilizing a U.S. SPOE
resolution without having a top-tier
holding company which would be the
only entity to enter resolution.
Question 1: The agencies invite
comment on all aspects of the
utilization of a U.S. SPOE strategy
under section 165(d) of the Dodd-Frank
Act by a specified filer whether or not
it is subject to the Regulation YY
requirement to establish a U.S. IHC,
including the feasibility of the U.S.
SPOE strategy and the characteristics of
the firm’s U.S. entities and operations
that would facilitate successful U.S.
SPOE strategy execution.
D. Long-Term Debt Rulemaking
The agencies, as well as the Office of
the Comptroller of the Currency, are
issuing a proposed rule for comment
that would require certain large IDI
holding companies, U.S. intermediate
holding companies of FBOs, and certain
IDIs, to issue and maintain outstanding
a minimum amount of long-term debt
(LTD), among other proposed
requirements.15 This proposed rule
would improve the resolvability of these
firms, and, in particular, their IDI
subsidiaries, in case of failure, reducing
costs to the Deposit Insurance Fund
(DIF) and mitigating financial stability
and contagion risks by reducing the risk
of loss to uninsured depositors. LTD
issued by the IDI could help support
resolution strategies by, among other
things, recapitalizing a bridge
depository institution and facilitating its
exit from resolution as a newly
chartered IDI that would have new
ownership. The agencies expect that a
final long-term debt rule could interact
with how the specified firms plan for
resolution under the Rule, and the
agencies anticipate ensuring that the
final resolution plan guidance for
foreign triennial full filers is consistent
with any final long-term debt rule.
Accordingly, the agencies welcome
comments that take the proposed longterm debt rulemaking into
consideration.16
14 12

CFR 252.153.
15 This proposed rulemaking is published
elsewhere in this Federal Register (LTD proposal).
16 The public also may provide comments on the
proposed guidance that assume that no long-term

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II. Overview of the Proposed Guidance
The proposed guidance begins with
the proposed scope and then is
organized into several substantive
topical areas. Each substantive topic is
bifurcated, with separate guidance for a
U.S. SPOE resolution strategy and a U.S.
MPOE resolution strategy. As discussed,
each resolution strategy poses distinct
risks and requires its own type of
planning and capabilities development
for executing the strategy. Accordingly,
the proposed guidance would account
for the different challenges posed by
each approach.
The proposed guidance for firms that
adopt a U.S. SPOE resolution strategy is
generally based on the 2020 FBO
Guidance or the associated proposal.17
Successful execution of a U.S. SPOE
strategy relies on the ability to provide
sufficient capital and liquidity to
material entities, a governance structure
that can identify the onset of financial
stress events, and the ability to ensure
the timely execution of the strategy and
to maintain continuity of operations
throughout resolution.
Some aspects of this proposal reflect
expectations that were included in the
2020 Proposed FBO Guidance. For
example, the proposal contains capital
and liquidity pre-positioning
expectations similar to the 2020
Proposed FBO Guidance, to better
support U.S. SPOE strategies and in
light of the LTD proposal. Although IDI
subsidiaries of certain specified firms
may be required under an LTD rule to
have outstanding a minimum amount of
prepositioned LTD, firms with a U.S.
SPOE strategy should have a framework
for determining the amount and
allocation of resources among the firm’s
material entities. Similarly, for specified
firms that adopt a U.S. SPOE strategy,
the agencies are proposing governance
mechanisms and separability
expectations similar to those contained
in the 2020 Proposed FBO Guidance.
Governance mechanisms increase the
likelihood that the U.S. SPOE strategy
would be implemented at a point in the
stress continuum prior to the firm
having exhausted all financial
resources, increasing the likelihood that
the bankruptcy reorganization would be
successful. Separability provides
additional optionality to firms’ U.S.
SPOE strategies.
The proposed guidance for firms that
utilize a U.S. MPOE resolution strategy
debt rule is finalized and that specified firms
remain subject to current capital rules.
17 Guidance for Resolution Plan Submissions of
Certain Foreign-Based Covered Companies, 85 FR
15449 (March 18, 2020) (2020 Proposed FBO
Guidance).

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is based upon the 2020 FBO Guidance
but tailored for a U.S. MPOE strategy.
The agencies are, however, proposing to
clarify their expectations for specified
firms that utilize a U.S. MPOE strategy
that includes the resolution of a material
entity that is a U.S. IDI. As discussed
elsewhere in this proposal, the
resolution of a large U.S. IDI under the
FDI Act likely would pose substantial
operational and legal challenges and
complexities. Accordingly, the agencies
believe that the resolution plans of firms
whose resolution plans contemplate the
separate resolution of a material entity
that is a U.S. IDI would benefit from
developing capabilities specific to and
considering legal requirements
regarding U.S. IDI resolution.
The agencies believe that each
substantive area of the proposed
guidance would play a part in helping
to ensure that the specified firms can be
resolved in an orderly manner. The
proposed guidance would describe the
agencies’ expectations for each of these
areas. In addition, the proposed
guidance would consolidate items of
feedback provided to a number of the
specified firms in the past, thereby
providing the public with one source of
applicable guidance for the specified
firms. The proposed guidance is not,
however, intended to override the
obligation of an individual specified
firm to respond, in its next resolution
plan submission, to pending items of
individual feedback or any
shortcomings or deficiencies identified
or determined by the agencies in that
specified firm’s prior resolution plan
submission. The proposed guidance also
is not meant to limit specified firms’
consideration of additional
vulnerabilities or obstacles that might
arise based on a firm’s particular
structure, operations, or resolution
strategy, and that should be factored
into the specified firm’s resolution plan
submission.
The proposed guidance concludes
with information about the format and
structure of a plan that applies equally
to plans contemplating either a U.S.
SPOE strategy or a U.S. MPOE strategy.
A. Scope of Application
The agencies propose to apply the
guidance to all foreign-based triennial
full filers. The Board’s tailoring
framework provides clear, predictable
scoping based on publicly reported
quantitative data. As discussed above,
the agencies believe that it is
appropriate to provide resolution
planning guidance to all foreign
triennial full filers given issues
identified in these firms’ 2021 targeted
resolution plans and considering

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lessons learned from recent events,
including the agencies’ experiences in
connection with the events leading to
UBS AG’s acquisition of Credit Suisse,
following the intervention of the Swiss
authorities.
The agencies would like the specified
firms to submit resolution plans that
take into consideration the final version
of the proposed guidance as soon as
practicable. However, the agencies
understand that the specified firms may
need time to take into consideration the
guidance when developing their
resolution plans. In light of the timing
of this proposal, the agencies are
considering providing a short extension
of the next resolution plan submission
date for the specified firms, with the
expectation that these plan submissions
would be due sooner than one year after
the proposed guidance is published in
final form.
The agencies seek comment on all
aspects of the proposed scope of
application.
Question 2: Should the agencies
provide more than 6 months for the
specified firms to take into
consideration the expectations in the
proposed guidance, once finalized? If
so, what time period should the
agencies provide?
B. Group Resolution Plan
The agencies recognize that the
preferred resolution outcome for many
specified firms is a successful home
country resolution using a global SPOE
resolution strategy that does not involve
the placement of any U.S. material
entities into resolution. However, by
law, U.S. resolution planning
requirements require relevant FBOs to
contemplate their resolution under the
Bankruptcy Code.
U.S. operations of an FBO are often
highly interconnected with the broader,
global operations of the financial
institution. To clarify the interaction
between U.S. and global resolution
strategies, the proposal outlines
expectations for specified firms to
describe the impact of executing the
firm’s global, group-wide resolution
plan on the firm’s U.S. operations and
detail the extent to which resolution
planning under the Rule relies on
different assumptions, strategies, and
capabilities from the global plan. A
specified firm’s broader resolvability
framework is expected to consider the
objectives of both the group-wide
resolution strategy and the U.S.
resolution strategy pursuant to the Rule,
with complementary efforts to enhance
resolvability across plans.

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C. Capital
For specified firms with a U.S. SPOE
resolution strategy, the agencies propose
guidance substantially similar to the
2020 Proposed FBO Guidance regarding
capital. The ability to provide sufficient
capital to material entities without
disruption from creditors is important
in order to ensure that material entities
can continue to maintain operations as
the firm is resolved. The proposal
describes expectations concerning the
appropriate positioning of capital and
other loss-absorbing instruments (e.g.,
debt that a parent holding company may
choose to forgive or convert to equity)
among the material entities within the
firm (resolution capital adequacy and
positioning, or RCAP). The positioning
of capital resources within the firm
should be consistent with any
applicable rules requiring prepositioned
resources in IDIs in the form of longterm debt. The proposal also describes
expectations regarding a methodology
for periodically estimating the amount
of capital that may be needed to support
each material entity after the bankruptcy
filing (resolution capital execution need,
or RCEN).
The agencies are not proposing
further expectations concerning capital
to firms whose plans contemplate a U.S.
MPOE resolution strategy, as a U.S.
MPOE strategy assumes most material
entities do not continue as going
concerns upon entry into resolution.
Question 3: In addition to the capitalrelated resolution plan requirements
under the Rule, are there other capitalrelated expectations that would
reasonably enhance the resolvability of
a specified firm that utilizes a U.S.
MPOE strategy in its resolution plan?
Question 4: Do the capital-related
resolution expectations in the proposed
guidance align with the provisions of
the interagency long-term debt
rulemaking proposal? Are there any
aspects of the proposed guidance that
should be revised, or additional
expectations added, in light of the
interagency long-term debt rulemaking
proposal?
D. Liquidity
For firms that adopt a U.S. SPOE
resolution strategy, the agencies propose
guidance substantially similar to the
2020 Proposed FBO Guidance regarding
liquidity. A firm’s ability to reliably
estimate and meet its liquidity needs
prior to, and in, resolution is important
to the execution of a firm’s resolution
strategy because it enables the firm to
respond quickly to demands from
stakeholders and counterparties,
including regulatory authorities in other

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jurisdictions and financial market
utilities. Maintaining sufficient and
appropriately positioned liquidity also
allows the subsidiaries to continue to
operate while the firm is being resolved
in accordance with the firm’s resolution
strategy.
For firms that adopt a U.S. MPOE
resolution strategy, the agencies propose
that a firm should have the liquidity
capabilities necessary to execute its
resolution strategy, and its plan should
include analysis and projections of a
range of liquidity needs during
resolution.
Question 5: In addition to the
liquidity-related resolution plan
requirements under the Rule and the
liquidity-related expectations in the
proposed guidance, are there other
liquidity related expectations that
would reasonably enhance the
resolvability of a specified firm that
utilizes a U.S. MPOE resolution
strategy? Are there circumstances under
which it would be appropriate for a
resolution plan that utilizes a U.S.
MPOE strategy to include the movement
of liquidity among U.S. material entities
that are in resolution?
E. Governance Mechanisms
For firms using a U.S. SPOE
resolution strategy, the agencies propose
guidance that is substantially similar to
the 2020 Proposed FBO Guidance
regarding governance mechanisms. An
adequate governance structure with
triggers that identify the onset,
continuation, and increase of financial
stress is important to ensure that there
is sufficient time to communicate and
coordinate with the foreign parent
regarding the provision of financial
support and other key actions. The
governance mechanisms section
proposes expectations that firms have
playbooks that describe the board and
senior management actions of the U.S.
non-branch material entities that would
be necessary in order to execute the
firm’s U.S. resolution strategy. In
addition, the proposal describes
expectations that these firms have
triggers that are linked to specific
actions outlined in these playbooks to
ensure the timely escalation of
information to both U.S. IHC and
foreign parent governing bodies. The
proposal also describes the expectations
that firms identify and analyze potential
legal challenges to planned U.S. IHC
support mechanisms, and any defenses
and mitigants to such challenges. To the
extent the preferred global resolution
strategy for the firm is a home country
SPOE resolution, the governance
mechanisms section proposes
expectations that a firm design such

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mechanisms in a way that does not
interfere with the execution of the
global strategy.
For firms that adopt a U.S. MPOE
resolution strategy, the agencies propose
adopting governance mechanisms
expectations to ensure communication
and coordination between the governing
body of the U.S. operations and the
foreign parent for the purpose of
facilitating preparations for an orderly
resolution.
Question 6: Are the governance
mechanisms expectations regarding
communications and triggers for firms
that utilize a U.S. MPOE strategy
appropriate and clear? Are there other
governance-related expectations that
should be extended to resolution plans
utilizing a U.S. MPOE resolution
strategy?
F. Operational
The development and maintenance of
operational capabilities is important to
support and enable execution of a firm’s
resolution strategy, including providing
for the continuation of identified critical
operations and preventing or mitigating
adverse effects on U.S. financial
stability. For firms that utilize a U.S.
SPOE resolution strategy, the agencies
propose adopting portions of the
operational expectations of the 2020
FBO Guidance and SR letter 14–1,18
with modifications that reflect the
specific characteristics and complexities
of the specified firms. Like the 2020
FBO Guidance, the proposal contains
expectations on payment, clearing and
settlement activities, managing,
identifying and valuing collateral, and
shared and outsourced services. For
firms that utilize a U.S. MPOE
resolution strategy, the agencies propose
adopting expectations based on SR letter
14–1 and the 2020 FBO Guidance that
are most relevant to an MPOE resolution
strategy. For example, the proposed
expectations regarding payment,
clearing and settlement activities are
those most likely to support resolution
in the MPOE context.
Question 7: Does the proposed
guidance sufficiently address FBOs that
plan to utilize a U.S. SPOE strategy that
may not be required to comply with U.S.
qualified financial contract resolution
stay regulations? How should FBOs that
are not ‘‘regulated entities’’ under
ISDA’s Resolution Stay Protocol
demonstrate that their SPOE resolution
strategies will be feasible despite the
lack of a stay on cross defaults to the

parent company? What guidance should
the agencies provide with respect to how
the SPOE strategy of such a firm should
address the potential effects of early
termination of the firm’s qualified
financial contracts?
G. Legal Entity Rationalization &
Separability
For specified firms that utilize a U.S.
SPOE resolution strategy, the agencies
propose substantively adopting the 2020
FBO Guidance regarding legal entity
rationalization and guidance that is
substantially similar to the 2020 FBO
Proposed Guidance regarding
separability. It is important that firms
maintain a structure that facilitates
orderly resolution. To achieve this, the
proposal states that a firm should
develop and describe in their plans
criteria supporting the U.S. resolution
strategy and integrate them into day-today decision making processes. The
criteria would be expected to consider
the best alignment of legal entities and
business lines and facilitate
resolvability of U.S. operations as a
firm’s activities, technology, business
models, or geographic footprint change
over time. In addition, the proposed
guidance provides that the firm should
identify discrete U.S. operations that
could be sold or transferred in
resolution to provide meaningful
optionality for the resolution strategy
under a range of potential failure
scenarios and include this information
in their plans.
For firms that utilize a U.S. MPOE
resolution strategy, the proposed
guidance would clarify that the firms
should have legal entity structures that
support their U.S. resolution strategy
and describe those structures in their
plans. The proposal also provides that
to the extent a material entity IDI relies
upon other affiliates during resolution,
the firm should discuss its rationale for
the legal entity structure and associated
resolution risks and potential mitigants.
In addition, the agencies propose that
the firms include options for the sale,
transfer, or disposal of significant assets,
portfolios, legal entities, or business
lines in resolution.
Question 8: Are there other
separability related expectations that
would reasonably enhance resolution
plans that utilize a U.S. MPOE
resolution strategy?

18 SR letter 14–1, ‘‘Principles and Practices for
Recovery and Resolution Preparedness’’ (Jan. 24,
2014), available at https://www.federalreserve.gov/
supervisionreg/srletters/sr1401.htm.

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H. Insured Depository Institution (IDI)
Resolution 19
Background. When an IDI fails and
the FDIC is appointed receiver, the FDIC
generally must utilize the resolution
option for the failed IDI that is least
costly to the DIF of all possible methods
(the least-cost requirement).20 An
exception to this requirement is
provided where a determination is made
by the Secretary of the Treasury, in
consultation with the President and
after a written recommendation from
two-thirds of the FDIC’s Board of
Directors and two-thirds of the Board,
that complying with the least-cost
requirement would have serious adverse
effects on economic conditions or
financial stability and implementing
another resolution option would avoid
or mitigate such adverse effects.21 A
specified firm should not assume the
use of this systemic risk exception to the
least-cost requirement in its resolution
plan.
Purchase and Assumption
Transaction. The FDIC typically seeks
to resolve a failed IDI by identifying,
before the IDI’s failure, one or more
potential acquirers so that as many of
the IDI’s assets and deposit liabilities as
possible can be sold to and assumed by
the acquirer(s) instead of remaining in
the receivership created on the failure
date.22 This transaction form, termed a
‘‘purchase and assumption’’ or ‘‘P&A’’
transaction, has historically been the
resolution approach that is least costly
to the DIF, easiest for the FDIC to
execute, and least disruptive to the
depositors of the failed IDI—particularly
in the case of transactions involving the
assumption of all the failed IDI’s
deposits by the assuming institution (an
‘‘all-deposit transaction’’)—and
typically can be completed over the
weekend following the IDI’s closure by
its primary regulator but before business
19 The FDIC has a separate rule requiring
resolution plans from certain IDIs, 12 CFR 360.10,
‘‘Resolution Plans Required for Insured Depository
Institutions With $50 Billion or More in Total
Assets’’ (the IDI Rule). The Rule and the IDI Rule
each have different goals and the expected content
of the respective resolution plans accordingly also
is different. The Rule requires a covered company
to submit a resolution plan that would allow rapid
and orderly resolution of the covered company
under the Bankruptcy Code in the event of material
financial distress or failure. The purpose of the IDI
Rule is to ensure that the FDIC has access to all of
the material information it needs to efficiently
resolve an IDI in the event of its failure.
20 See 12 U.S.C. 1823(c)(4). A deposit payout and
liquidation of the failed IDI’s assets (payout
liquidation) is the general baseline the FDIC uses in
a least-cost requirement determination. See 12
U.S.C. 1823(c)(4)(D).
21 See 12 U.S.C. 1823(c)(4)(G).
22 See generally https://www.fdic.gov/resources/
resolutions/bank-failures/ for background about the
resolution of IDIs by the FDIC.

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ordinarily would commence the
following Monday (closing weekend).
The limited size and operational
complexity present in most small-bank
failures has allowed the FDIC to execute
a P&A transaction with a single acquirer
on numerous occasions. Resolving an
IDI via a P&A transaction over the
closing weekend, however, may not be
available to the FDIC, particularly in
failures involving large IDIs. P&A
transactions require lead time to
identify potential buyers and allow due
diligence on, and an auction of, the
failing IDI’s assets and banking
business, also termed its ‘‘franchise.’’
Additionally, larger banks can pose
significant, and potentially systemic,
challenges in resolutions. These
challenges include: a more limited pool
of potential acquirers as a failed IDI
increases in size, which makes a
transaction in which nearly all assets
and liabilities are transferred to one or
more acquirers increasingly less likely;
operational complexities which require
advance planning on the part of the IDI
and the FDIC and the development of
certain capabilities; potential market
concentration and antitrust
considerations; and potentially the need
to maintain the continuity of activities
conducted in whole or in part in the IDI
that are critical to U.S. financial
stability.
For example, the largest failed IDI in
U.S. history, Washington Mutual Bank,
had approximately $307 billion in
assets. The DIF did not incur a loss
associated with this failure in part
because it benefitted from the FDIC’s
sale of the institution to an acquirer
which had first engaged in exhaustive
due diligence of the institution during a
self-marketing effort conducted by the
IDI prior to its failure. A more recent
example, that of First Republic Bank,
which was also acquired in an alldeposit transaction, illustrates that such
a transaction can be difficult to
effectuate. The FDIC invited 21 banks
and 21 nonbanks to participate in the
bidding process and received bids from
only 4 bidders.23 The least costly bid
necessitated a loss-sharing agreement,
and the transaction is expected to result
in a significant loss to the DIF. In
addition, the FDIC received only one
23 See Remarks by Chairman Martin J. Gruenberg
on ‘‘Oversight of Prudential Regulators’’ before the
Committee on Financial Services, United States
House of Representatives available at https://
www.fdic.gov/news/speeches/2023/
spmay1523.html; see also Remarks by Chairman
Martin J. Gruenberg on ‘‘Recent Bank Failures and
the Federal Regulatory Response’’ before the
Committee on Banking, Housing, and Urban Affairs,
United States Senate available at https://
www.fdic.gov/news/speeches/2023/
spmar2723.html.

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viable bid for Silicon Valley Bank
during the weekend following its
failure, but this bid did not satisfy the
least-cost test. The FDIC received no
viable all-deposit bids for Signature
Bank at the time it failed.24
If no P&A transaction that meets the
least-cost requirement can be
accomplished at the time an IDI fails,
the FDIC must pursue an alternative
resolution strategy. The primary
alternative resolution strategies for a
failed IDI are: (1) a payout liquidation;
or (2) utilization of a BDI. The FDIC
conducts payout liquidations by paying
insured deposits in cash or transferring
the insured deposits to an existing
institution or a new institution
organized by the FDIC to assume the
insured deposits (generally, a Deposit
Insurance National Bank or DINB). In
payout liquidations, the FDIC as
receiver retains substantially all of the
failed IDI’s assets for later sale, and the
franchise value of the failed IDI is lost.
Bridge Depository Institution. If the
FDIC determines that temporarily
continuing the operations of the failed
IDI is less costly than a payout
liquidation, it may organize a BDI to
purchase certain assets and assume
certain liabilities of the failed IDI.25
Generally, a BDI would continue the
failed bank’s operations according to
business plans and budgets approved by
the FDIC and carried out by FDICselected leadership of the BDI. In
addition to providing depositors access
to deposits and banking services, the
BDI would conduct any necessary
restructuring required to rationalize the
failed IDI’s operations and maximize
value to be achieved in an eventual sale.
Subject to the least-cost requirement,
the initial structure of the BDI may be
based upon an all-deposit transaction, a
transaction in which the BDI assumes
only the insured deposits, or a
transaction in which the BDI assumes
all insured deposits and a portion of the
uninsured deposits. Once a BDI is
established, the FDIC seeks to stabilize
the institution while simultaneously
planning for the eventual termination of
24 To protect depositors and preserve the value of
the assets and operations of each of SVB and SB
following failure—which can improve recoveries
for creditors and the DIF—the FDIC ultimately
transferred all the deposits and substantially all of
the assets of each failed bank to a full-service bridge
depository institution (BDI) operated by the FDIC
while the FDIC marketed the institutions to
potential bidders.
25 Before a BDI may be chartered, the chartering
conditions set forth in 12 U.S.C. 1821(n)(2) must
also be satisfied. For purposes of this guidance, if
the Plan provides appropriate analysis concerning
the feasibility of the BDI strategy, there is no
expectation that the resolution plan also
demonstrate separately that the conditions for
chartering the BDI have been satisfied.

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the BDI. In exiting and terminating a
BDI, the FDIC may merge or consolidate
the BDI with another depository
institution, issue and sell a majority of
the capital stock in the BDI, or effect the
assumption of the deposits or
acquisition of the assets of the BDI.26
However, many of the same factors that
challenge the feasibility of a traditional
P&A transaction also complicate
planning for the termination of a BDI
through a sale of the whole entity or its
constituent parts.
The proposed guidance would clarify
the expectations for a firm adopting a
U.S. MPOE resolution strategy with a
material entity IDI to demonstrate how
the IDI can be resolved in a manner that
is consistent with the overall objective
of the Plan to substantially mitigate the
risk that the failure of the specified firm
would have serious adverse effects on
financial stability in the United States,
while also adhering to the requirements
of the FDI Act regarding failed bank
resolutions without relying on the
assumption that a systemic risk
exception will be available. These
expectations would not be applicable to
firms adopting a U.S. SPOE resolution
strategy because U.S. IDI subsidiaries of
such firms would not be expected to
enter resolution.
Question 9: Should the guidance
indicate that if a specified filer proposes
a strategy using a BDI to resolve its
subsidiary material entity IDI, the plan
should include a detailed description of
the balance sheet components that
would transfer to the BDI and of the
process the specified filer believes is
most appropriate to value the
transferred components, inclusive of pro
forma balance sheet and income
statements?
Question 10: Should the guidance
indicate that if a specified filer proposes
a strategy using a BDI to resolve its
subsidiary material entity IDI, the plan
should describe and quantify:
• The amounts to be realized through
liquidating the failed IDI’s assets and
any expected premiums associated with
selling the institution’s deposits;
• Any franchise value bid premiums
expected to be realized through
maintaining certain ongoing business
operations in a BDI; and
• A comparison of the loss to the DIF
realized from a payout liquidation and
from utilizing a BDI so as to support the
conclusion that a BDI would result in
the least costly resolution?
26 12

U.S.C. 1821(n)(10).

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I. Derivatives and Trading Activities
The agencies request comment on
whether to provide guidance on
derivatives and trading activities for
specified firms that utilize a U.S. SPOE
resolution strategy. Although most of
the specified firms have limited
derivatives and trading operations
compared to the U.S. GSIBs, it remains
important that their derivatives and
trading activities can be stabilized and
de-risked during resolution without
causing significant disruption to U.S.
markets, particularly for firms with large
U.S. broker-dealers. The agencies also
are considering the resolution
challenges that may be posed by
transactions that originate from and may
be managed in the U.S. but are booked
outside of the U.S. If the agencies were
to provide guidance on derivatives and
trading activities, the agencies likely
would adopt aspects of the 2020
Proposed FBO Guidance. The agencies
do not anticipate providing derivatives
and trading activities guidance to
specified firms that utilize a U.S. MPOE
resolution strategy.
Question 11: Should the agencies
provide resolution plan guidance on
derivatives and trading activities for
specified firms that utilize a U.S. SPOE
resolution strategy? If so, what should
be the content of that guidance, what
methodology should the agencies use to
determine the scope of specified firms to
be subject to that guidance, and would
it be appropriate to adopt all or some of
the expectations contained in the 2020
Proposed FBO Guidance? What other
derivatives and trading activities-related
expectations would reasonably enhance
resolution plans that utilize a U.S. SPOE
resolution strategy?
Question 12: Should the agencies
provide resolution plan guidance on
derivatives and trading activities for
specified firms that utilize a U.S. MPOE
resolution strategy? If so, what should
be the content of that guidance and
what methodology should the agencies
use to determine the scope of specified
firms to be subject to that guidance?
Question 13: Should any resolution
plan guidance the agencies provide to
the specified firms on derivatives and
trading activities take a different
approach to transactions that originate
in the U.S. but are booked outside of the
U.S. and transactions that originate and
are booked in the U.S.?
J. Branches
U.S. branches of FBOs can play a
critical role in a firm’s U.S. operations

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and may present unique issues in a
resolution of a specified firm’s U.S.
entities and operations. The agencies
propose guidance that is similar to the
2020 FBO Guidance regarding branches.
Under the proposal, specified firms
would be expected to show how
branches would continue to facilitate
the firm’s FMU access for identified
critical operations and to meet funding
needs. The proposal also outlines
expectations that the specified firms
analyze the effects on the firm’s FMU
access and identified critical operations
of the cessation of operations of any
U.S. branch that is a material entity.
K. Format and Structure of Plans;
Assumptions
This section states the agencies’
preferred presentation regarding the
format, assumptions, and structure of
resolution plans. Plans should contain
an executive summary, a narrative of the
firm’s resolution strategy, relevant
technical appendices, and a public
section as detailed in the Rule. The
proposed format, structure, and
assumptions are generally similar to
those in the 2020 FBO Guidance, except
that the proposed guidance reflects the
expectation that a firm should support
any assumptions that it will have access
to the Discount Window and/or other
borrowings during the period
immediately prior to entering
bankruptcy and clarifies expectations
around such assumptions and that firms
should not assume the use of the
systemic risk exception to the least-cost
test in the event of a failure of an IDI
requiring resolution under the FDI Act.
In addition, for firms that adopt a U.S.
MPOE resolution strategy, the proposal
includes the expectation that a plan
should demonstrate and describe how
the failure event(s) results in material
financial distress of its U.S. operations,
including consideration of the
likelihood of the diminution the firm’s
liquidity and capital levels prior to
bankruptcy.
Question 14: Certain firms’ plans rely
on lending facilities, including the
Discount Window or other governmentsponsored facilities in the period
immediately preceding a bankruptcy
filing. Should the guidance include
additional clarifications related to
assumptions regarding these lending
facilities? Should the guidance contain
clarifications relating to other
assumptions discussed in the guidance
or additional appropriate assumptions?

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Question 15: The agencies included in
the 2019 GSIB Guidance and 2020 FBO
Guidance answers that had been
previously published to frequently asked
questions (FAQs) the agencies received
from the guidance recipients about the
topics in resolution plan guidance (e.g.,
capital, liquidity, etc.); however, there
was no FAQ process for the specified
firms given the limited number of
common questions received. Should the
agencies include in resolution guidance
for the specified firms answers to FAQs
similar to those contained in the 2019
GSIB Guidance and 2020 FBO
Guidance? If so, which answers to FAQs
should the final guidance contain, and
what changes, if any, should the
agencies make to the answers to FAQs
in the 2019 GSIB Guidance and 2020
FBO Guidance?

(E) Estimates of capital or start-up
costs and costs of operation,
maintenance, and purchase of services
to provide information.
Comments on aspects of this
document that may affect reporting,
recordkeeping, or disclosure
requirements and burden estimates
should be sent to the addresses listed in
the ADDRESSES section of the
Supplementary Information. A copy of
the comments may also be submitted to
the OMB desk officer for the Agencies:
By mail to U.S. Office of Management
and Budget, 725 17th Street NW,
#10235, Washington, DC 20503, or by
facsimile to (202) 395–5806, Attention,
Federal Banking Agency Desk Officer.

III. Paperwork Reduction Act
Certain provisions of the proposed
guidance contain ‘‘collections of
information’’ within the meaning of the
Paperwork Reduction Act of 1995 (PRA)
(44 U.S.C. 3501–3521). In accordance
with the requirements of the PRA, the
agencies may not conduct or sponsor,
and a respondent is not required to
respond to, an information collection
unless it displays a currently valid
Office of Management and Budget
(OMB) control number. The agencies
reviewed the proposed guidance and
determined that it would revise the
reporting revisions that have been
previously approved by OMB under the
Board’s OMB control number 7100–
0346 (Reporting Requirements
Associated with Regulation QQ; FR QQ)
and the FDIC’s control number 3064–
0210 (Reporting Requirements Associate
with Resolution Planning). The Board
has reviewed the proposed guidance
under the authority delegated to the
Board by OMB.
Comments are invited on the
following:
(A) Whether the collections of
information are necessary for the proper
performance of the agencies’ functions,
including whether the information has
practical utility;
(B) The accuracy of the agencies’
estimates of the burden of the
information collections, including the
validity of the methodology and
assumptions used;
(C) Ways to enhance the quality,
utility, and clarity of the information to
be collected;
(D) Ways to minimize the burden of
the information collections on
respondents, including through the use
of automated collection techniques or
other forms of information technology;
and

Board

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Proposed Revisions, With Extension, of
the Following Information Collections
Collection title: Reporting
Requirements Associated with
Regulation QQ.
Collection identifier: FR QQ.
OMB control number: 7100–0346.
Frequency: Triennial, Biennial, and
on occasion.
Respondents: Bank holding
companies (including any foreign bank
or company that is, or is treated as, a
bank holding company under section
8(a) of the International Banking Act of
1978 and meets the relevant total
consolidated assets threshold) with total
consolidated assets of $250 billion or
more, bank holding companies with
$100 billion or more in total
consolidated assets with certain
characteristics, and nonbank financial
firms designated by the Financial
Stability Oversight Council for
supervision by the Board.
FDIC
Collection title: Reporting
Requirements Associated with
Resolution Planning.
OMB control number: 3064–0210.
Current Actions: The proposed
guidance would apply to all triennial
full filers, but expectations would differ
based on whether a firm adopts an
SPOE or an MPOE resolution strategy
and whether it is foreign or domestic.
The proposed guidance is intended to
clarify the agencies’ expectations
concerning the resolution plans
required pursuant to the Rule. The
document does not have the force and
effect of law. Rather, it describes the
agencies’ expectations and priorities
regarding these the resolution plans of
triennial full filers and the agencies’
general views regarding specific areas
where additional detail should be
provided and where certain capabilities

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or optionality should be developed and
maintained to demonstrate that each
firm has considered fully, and is able to
mitigate, obstacles to the successful
implementation of its preferred
resolution strategy.
The proposed guidance for triennial
full filers using an SPOE strategy is
based on the 2019 GSIB guidance (for
domestic firms) and the 2020 FBO
guidance (for foreign firms). It would
clarify the agencies’ expectations
around capital, liquidity, governance
mechanisms, and operations. The
proposed guidance also would clarify
expectations concerning management
information systems capabilities and the
identification of discrete separability
options appropriate to the resolution
strategy. Additionally, if finalized, the
FBOs that adopt an SPOE resolution
strategy should address how their U.S.
resolution plan aligns with their group
resolution plan.
The proposed guidance for triennial
full filers using an MPOE resolution
strategy addresses similar topics but
reflects the risks of and capabilities
needed for an MPOE resolution. The
proposed guidance explains the
agencies’ expectations around liquidity
and operational capabilities, and legal
entity rationalization. The proposed
guidance also provides clarified
expectations related to the separate
resolution of a U.S. IDI and to
identification of discrete separability
options. FBOs that adopt an MPOE
resolution strategy would have
expectations related to governance
mechanisms; the role of branches; and
the group resolution plan.
The proposed guidance does not
specify expectations around derivatives
and trading activities.
Historically, the Board and the FDIC
have split the respondents for purposes
of PRA clearances. As such, the agencies
will split the change in burden as well.
As a result of this split and the proposed
revisions, there is a proposed net
increase in the overall estimated burden
hours of 13,386 hours for the Board and
17,610 hours for the FDIC. Therefore,
the total Board estimated burden for its
entire information collection would be
216,853 hours and the total FDIC
estimate burden for its entire
information collection would be
211,300 hours.
The following table presents only the
change in the estimated burden hours,
as amended if the guidance were
finalized, broken out by agency. The
table does not include a discussion of
the remaining estimated burden hours,

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which remain unchanged.27 As shown
in the table, the Triennial Full filing
types would be estimated more

granularly according to SPOE and
MPOE resolution strategies.

TABLE 1—BURDEN HOUR ESTIMATES UNDER CURRENT REGULATIONS AND UNDER THE PROPOSED GUIDANCE
Estimated
number of
respondents

FR QQ

Estimated
average
hours per
response

Estimated
annual
frequency

Estimated
annual
burden hours

Board Burdens
Current
Triennial Full:
Complex Foreign ...............................................................................
Foreign and Domestic .......................................................................

1
7

1
1

9,777
4,667

9,777
32,669

Current Total ..............................................................................
Proposed
Triennial Full:
FBO SPOE * ......................................................................................
FBO MPOE .......................................................................................
Domestic MPOE ................................................................................

........................

........................

........................

42,446

2
3
3

1
1
........................

11,848
5,939
5,513

23,696
17,817
16,539

Proposed Total ...........................................................................

........................

........................

........................

58,052

0
7

1
1

9,777
4,667

0
32,669

Current Total ..............................................................................
Proposed
Triennial Full:
FBO SPOE * ......................................................................................
FBO MPOE .......................................................................................
Domestic MPOE ................................................................................

........................

........................

........................

32,669

2
3
2

1
1
1

11,848
5,939
5,513

23,696
17,817
11,026

Proposed Total ...........................................................................

........................

........................

........................

52,539

FDIC Burdens
Current
Triennial Full:
Complex Foreign ...............................................................................
Foreign and Domestic .......................................................................

* There are currently no domestic triennial full filers utilizing a SPOE strategy. Estimated hours per response for a domestic SPOE triennial full
filer would be 11,235 hours.

I. Introduction
Section 165(d) of the Dodd-Frank Wall
Street Reform and Consumer Protection Act
(12 U.S.C. 5365(d)) requires certain financial
companies to report periodically to the Board
of Governors of the Federal Reserve System
(the Board) and the Federal Deposit
Insurance Corporation (the FDIC) (together,
the agencies) their plans for rapid and
orderly resolution in the event of material
financial distress or failure. On November 1,
2011, the agencies promulgated a joint rule
implementing the provisions of Section
165(d).1 Subsequently, in November 2019,

the agencies finalized amendments to the
joint rule addressing amendments to the
Dodd-Frank Act made by the Economic
Growth, Regulatory Relief, and Consumer
Protection Act and improving certain aspects
of the joint rule based on the agencies’
experience implementing the joint rule since
its adoption.2 Financial companies meeting
criteria set out in the Rule must file a
resolution plan (Plan) according to the
schedule specified in the Rule.
This document is intended to provide
guidance to certain foreign financial
companies required to submit Plans
regarding development of their respective
U.S. strategies to assist their further
development of a Plan for their 2024 and
subsequent Plan submissions. Specifically,
the guidance applies to any foreign-based
covered company that is subject to Category
II or III standards according to their

combined U.S. operations in accordance with
the Board’s tailoring rule (specified firms).3
This guidance supersedes the joint Guidance
for Resolution Plan Submissions of Certain
Foreign-Based Covered Companies.4
The Plan for a specified firm would
address a scenario where its U.S. operations
experience material financial distress and the
foreign parent is unable or unwilling to
provide sufficient financial support for the
continuation of U.S. operations, and at least
the top tier U.S. IHC files for bankruptcy
under Title 11, United States Code. Under
such a scenario, the Plan should provide for
the orderly resolution of the specified firm’s
U.S. material entities and operations.
In general, this document is organized
around a number of key challenges in
resolution (interaction with group resolution
plan; capital; liquidity; governance
mechanisms; operational; branches; legal

27 In addition to the proposed revisions to the
estimations for Triennial Full filings, the agencies
have revised the estimation for Biennial Full filings
from 40,115 hours per response to 39,550 hours per
response to align the burden estimation
methodology with what was used for Triennial Full
filings under the proposed guidance. Specifically,
the agencies removed a component for a biennial
full filer’s analysis of its critical operations as part

of its submission of targeted and full resolution
plans, because this critical operations analysis is
integrated in the preparation of such plans.
1 Resolution Plans Required, 76 FR 67323
(November 1, 2011).
2 Resolution Plans Required, 84 FR 59194
(November 1, 2019). The amendments became
effective December 31, 2019. ‘‘Rule’’ means the joint

rule as amended in 2019. Terms not defined herein
have the meanings set forth in the Rule.
3 Prudential Standards for Large Bank Holding
Companies, Savings and Loan Holding Companies,
and Foreign Banking Organizations, 84 FR 59032
(Nov. 1, 2019).
4 85 FR 83557 (Dec. 22, 2020) (2020 FBO
Guidance).

Appendix: Text of the Proposed
Guidance

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Guidance for Resolution Plan
Submissions of Foreign Triennial Full
Filers

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entity rationalization and separability; and
insured depository institution resolution, if
applicable) that apply across resolution
plans, depending on their strategy.
Additional challenges or obstacles may arise
based on a firm’s particular structure,
operations, or resolution strategy. Each firm
is expected to satisfactorily address these
vulnerabilities in its Plan. In addition, each
topic of this guidance is separated into
expectations for a specified firm that utilizes
a U.S. single point of entry (U.S. SPOE)
resolution strategy for its Plan and
expectations for a specified firm that utilizes
a U.S. multiple point of entry (U.S. MPOE)
resolution strategy for its Plan.5 Under the
Rule, the agencies will review a Plan to
determine if it satisfactorily addresses key
potential challenges, including those
specified below. If the agencies jointly decide
that an aspect of a Plan presents a weakness
that individually or in conjunction with
other aspects could undermine the feasibility
of the Plan, the agencies may determine
jointly that the Plan is not credible or would
not facilitate an orderly resolution under the
U.S. Bankruptcy Code.
II. Interaction With Group Resolution Plan
U.S. SPOE & U.S. MPOE
Recognizing that the preferred resolution
outcome for the specified firms is often a
successful SPOE home country resolution, a
specified firm’s Plan should describe the
impact of executing the global resolution
plan on U.S. operations. This description
should include a discussion of the expected
resolution strategy for the firm’s U.S. entities
and operations under the global resolution
plan. In addition, a specified firm’s
resolvability work in the United States
should consider both the objectives of the
firm’s group-wide resolution strategy and the
Rule. Efforts to enhance the resolvability of
U.S. operations and entities should be as
complementary as practicable to the groupwide resolution strategy, while complying
with the Rule. To the extent that the Plan
relies on different assumptions, strategies,
and capabilities, such as those used to project
liquidity needs in resolution, from those
necessary to execute the global strategy, the
Plan should include a description of such
differences.
III. Capital
U.S. SPOE
The firm should have the capital
capabilities necessary to execute its U.S.

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5 The

agencies recognize that the preferred
resolution outcome for many specified firms is a
successful home country resolution using a global
SPOE resolution strategy where U.S. material
entities are provided with sufficient capital and
liquidity resources to allow them to stay out of
resolution proceedings and maintain continuity of
operations throughout the parent’s resolution.
However, because support from the foreign parent
in stress cannot be ensured, the Rule provides that
the U.S. resolution plan for specified firms should
specifically address a scenario where the U.S.
operations experience material financial distress,
and the Plan should not assume that the specified
firm takes resolution actions outside the United
States that would eliminate the need for any U.S.
subsidiaries to enter resolution proceedings.

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resolution strategy, including the modeling
and estimation process described below.
Resolution Capital Adequacy and Positioning
(RCAP). In order to help ensure that a firm’s
U.S. non-branch material entities 6 could be
resolved in an orderly manner, the firm’s
U.S. IHC should have an adequate amount of
loss-absorbing capacity to execute its U.S.
resolution strategy. Thus, a firm’s U.S. IHC
should have outstanding a minimum amount
of loss-absorbing capacity, including longterm debt, to help ensure that the firm has
adequate capacity to meet that need at the
U.S. IHC on a consolidated basis (IHC LAC).7
Proceeds from a firm’s U.S. IHC LAC
should be appropriately positioned between
the U.S. IHC and the subsidiaries of the U.S.
IHC that are material entities (U.S. IHC
subsidiaries), consistent with any applicable
rules requiring prepositioned resources at
U.S. IDIs in the form of long-term debt. After
adhering to any requirements related to
prepositioning long-term debt at IDIs, the
positioning of a firm’s remaining IHC LAC
should balance the certainty associated with
pre-positioning internal LAC directly at U.S.
IHC subsidiaries with the flexibility provided
by holding recapitalization resources at the
U.S. IHC (contributable resources) to meet
unanticipated losses at the U.S. IHC
subsidiaries. That balance should take
account of both pre-positioning at U.S. IHC
subsidiaries and holding resources at the U.S.
IHC, and the obstacles associated with each.
With respect to material entities that are not
subject to pre-positioning requirements, the
firm should not rely exclusively on either full
pre-positioning or U.S. IHC contributable
resources to execute its U.S. resolution
strategy, unless it has only one U.S. IHC
subsidiary that is an operating subsidiary.
The Plan should describe the positioning of
internal LAC among the U.S. IHC and the
U.S. IHC subsidiaries, along with analysis
supporting such positioning.
Finally, to the extent that pre-positioned
internal LAC at a U.S. IHC subsidiary is in
the form of intercompany debt and there are
one or more entities between the lender and
the borrower, the firm should structure the
instruments so as to ensure that the U.S. IHC
subsidiary can be recapitalized.
Resolution Capital Execution Need
(RCEN). To the extent necessitated by the
firm’s U.S. resolution strategy, U.S. nonbranch material entities need to be
recapitalized to a level that allows for an
orderly resolution. The firm should have a
methodology for periodically estimating the
6 The terms ‘‘material entities,’’ ‘‘identified
critical operations,’’ and ‘‘core business lines’’ have
the same meaning as in the Rule. The term ‘‘U.S.
material entity’’ means any subsidiary, branch, or
agency that is a material entity and is domiciled in
the United States. The term ‘‘U.S. non-branch
material entity’’ means a material entity organized
or incorporated in the U.S. including, in all cases,
the U.S. IHC. The term ‘‘U.S. IHC subsidiaries’’
means all U.S. non-branch material entities other
than the U.S. IHC.
7 Total Loss-Absorbing Capacity, Long-Term Debt,
and Clean Holding Company Requirements for
Systemically Important U.S. Bank Holding
Companies and Intermediate Holding Companies of
Systemically Important Foreign Banking
Organizations, 82 FR 8266 (January 24, 2017); LTD
proposal.

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amount of capital that may be needed to
support each U.S. IHC subsidiary after the
U.S. IHC bankruptcy filing (RCEN). The
firm’s positioning of IHC LAC should be able
to support the RCEN estimates.
The firm’s RCEN methodology should use
conservative forecasts for losses and riskweighted assets and incorporate estimates of
potential additional capital needs through
the resolution period,8 consistent with the
firm’s resolution strategy for its U.S.
operations. The RCEN methodology should
be calibrated such that recapitalized U.S. IHC
subsidiaries will have sufficient capital to
maintain market confidence as required
under the U.S resolution strategy. Capital
levels should meet or exceed all applicable
regulatory capital requirements for ‘‘wellcapitalized’’ status and meet estimated
additional capital needs throughout
resolution. U.S. IHC subsidiaries that are not
subject to capital requirements may be
considered sufficiently recapitalized when
they have achieved capital levels typically
required to obtain an investment-grade credit
rating or, if the entity is not rated, an
equivalent level of financial soundness.
Finally, the methodology should be
independently reviewed, consistent with the
firm’s corporate governance processes and
controls for the use of models and
methodologies.
U.S. MPOE
The agencies do not propose issuing
guidance on this topic to firms whose Plans
contemplate a U.S. MPOE resolution strategy.
IV. Liquidity
U.S. SPOE
The firm should have the liquidity
capabilities necessary to execute its U.S
resolution strategy, including those described
below. For resolution purposes, these
capabilities should include having an
appropriate model and process for estimating
and maintaining sufficient liquidity at—or
readily available from the U.S. IHC to—U.S.
IHC subsidiaries, and a methodology for
estimating the liquidity needed to
successfully execute the U.S. resolution
strategy, as described below.
Capabilities. A firm is expected to have a
comprehensive understanding of funding
sources, uses, and risks at material entities
and identified critical operations, including
how funding sources may be affected under
stress. For example, a firm should have and
describe its capabilities to:
(A) Evaluate the funding requirements
necessary to perform identified critical
operations, including shared and outsourced
services and access to financial market
utilities (FMUs); 9
(B) Monitor liquidity reserves and relevant
custodial arrangements by jurisdiction and
material entity; 10
(C) Routinely test funding and liquidity
outflows and inflows for U.S. non-branch
material entities at the legal entity level
8 The resolution period begins immediately after
the U.S. IHC bankruptcy filing and extends through
the completion of the U.S. resolution strategy.
9 12 CFR 252.156(g)(3).
10 12 CFR 252.156(g)(2).

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under a range of adverse stress scenarios,
taking into account the effect on intra-day,
overnight, and term funding flows between
affiliates and across jurisdictions;
(D) Assess existing and potential
restrictions on the transfer of liquidity
between U.S. non-branch material entities; 11
and
(E) Develop contingency strategies to
maintain funding for U.S. non-branch
material entities and identified critical
operations in the event of a disruption in the
specified firm’s current funding model.12
Resolution Liquidity Adequacy and
Positioning (RLAP). With respect to RLAP,
the firm should be able to measure the standalone liquidity position of each U.S. nonbranch material entity—i.e., the high-quality
liquid assets (HQLA) at the U.S. non-branch
material entity less net outflows to third
parties and affiliates—and ensure that
liquidity is readily available to meet any
deficits. The RLAP model should cover a
period of at least 30 days and reflect the
idiosyncratic liquidity profile of the U.S. IHC
and risk of each U.S. IHC subsidiary. The
model should balance the reduction in
frictions associated with holding liquidity
directly at the U.S. IHC subsidiary with the
flexibility provided by holding HQLA at the
U.S. IHC or at a U.S. IHC subsidiary available
to meet unanticipated outflows at other U.S.
IHC subsidiaries.13 The firm should not rely
exclusively on either full pre-positioning or
U.S. IHC contributable resources to execute
its U.S. resolution strategy, unless it has only
one U.S. IHC subsidiary that is an operating
subsidiary.
The model 14 should ensure that on a
consolidated basis the U.S. IHC holds
sufficient HQLA to cover net liquidity
outflows of the U.S. non-branch material
entities. The model should also measure the
stand-alone net liquidity positions of each
U.S. non-branch material entity. The standalone net liquidity position of each U.S. nonbranch material entity (HQLA less net
outflows) should be measured using the
firm’s internal liquidity stress test
assumptions and should treat inter-affiliate
exposures in the same manner as third-party
exposures. For example, an overnight
unsecured exposure to a non-U.S. affiliate
should be assumed to mature. Finally, the
firm should not assume that a net liquidity
surplus at any U.S. IHC subsidiary that is a
depository institution could be moved to
meet net liquidity deficits at an affiliate, or
to augment U.S. IHC resources, consistent
with Regulation W.
Additionally, the RLAP methodology
should take into account for each of the U.S.
IHC, U.S. IHC subsidiaries, and any branch
that is a material entity (A) the daily

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11 Id.
12 12

CFR 252.156(e).
the extent HQLA is held at the U.S. IHC or
at a U.S. IHC subsidiary, the model must consider
whether such funds are freely available. To be
freely available, the HQLA must be free of legal,
regulatory, contractual, and other restrictions on the
ability of the material entity to liquidate, sell, or
transfer the asset.
14 ‘‘Model’’ refers to the set of calculations
required by Regulation YY that estimate the U.S.
IHC’s liquidity position.
13 To

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contractual mismatches between their
respective inflows and outflows; (B) their
respective daily flows from movement of
cash and collateral for all inter-affiliate
transactions; and (C) their respective daily
stressed liquidity flows and trapped liquidity
as a result of actions taken by clients,
counterparties, key FMUs, and foreign
supervisors, among others.
In calculating its RLAP estimate, the U.S.
IHC should calculate its liquidity position
with respect to its foreign parent, branches
and agencies, and other affiliates (together,
affiliates) separately from its liquidity
position with respect to third parties, and
should not offset inflows from affiliated
parties against outflows to external parties. In
addition, a U.S. IHC should use cash-flow
sources from its affiliates to offset cash-flow
needs of its affiliates only to the extent that
the term of the cash-flow source from its
affiliates is the same as, or shorter than, the
term of the cash-flow need of its affiliates.15
Resolution Liquidity Execution Need
(RLEN). The firm should have a methodology
for estimating the liquidity needed after the
U.S. IHC’s bankruptcy filing to stabilize any
surviving U.S. IHC subsidiaries and to allow
those entities to operate post-filing, in
accordance with the U.S. strategy.
The firm’s RLEN methodology should:
A. Estimate the minimum operating
liquidity (MOL) needed at each U.S. IHC
subsidiary that is a material entity to ensure
those entities could continue to operate, to
the extent relied upon in the U.S. resolution
strategy, after implementation of the U.S.
resolution strategy and/or to support a winddown strategy;
B. Provide daily cash flow forecasts by U.S.
IHC subsidiary to support estimation of peak
funding needs to stabilize each entity under
resolution;
C. Provide a comprehensive breakout of all
inter-affiliate transactions and arrangements
that could impact the MOL or peak funding
needs estimates for the U.S. IHC subsidiaries;
and
D. Estimate the minimum amount of
liquidity required at each U.S. IHC subsidiary
to meet the MOL and peak needs noted
above, which would inform the provision of
financial resources from the foreign parent to
the U.S. IHC, or if the foreign parent is
unable or unwilling to provide such financial
support, any preparatory resolution-related
actions.
The MOL estimates should capture U.S.
IHC subsidiaries’ intraday liquidity
requirements, operating expenses, working
capital needs, and inter-affiliate funding
frictions to ensure that U.S. IHC subsidiaries
could operate without disruption during the
resolution.
The peak funding needs estimates should
be projected for each U.S. IHC subsidiary and
cover the length of time the firm expects it
would take to stabilize that U.S. IHC
subsidiary. Inter-affiliate funding frictions
should be taken into account in the
estimation process.
15 The U.S. IHC should calculate its cash-flow
sources from its affiliates consistent with the net
internal stressed cash-flow need calculation in
§ 252.157(c)(2)(iv) of Regulation YY.

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The firm’s forecasts of MOL and peak
funding needs should ensure that U.S. IHC
subsidiaries could operate through resolution
consistent with regulatory requirements,
market expectations, and the firm’s postfailure strategy. These forecasts should
inform the RLEN estimate, i.e., the minimum
amount of HQLA required to facilitate the
execution of the firm’s strategy for the U.S.
IHC subsidiaries.
For nonsurviving U.S. IHC subsidiaries, the
firm should provide analysis and an
explanation of how the material entity’s
resolution could be accomplished within a
reasonable period of time and in a manner
that substantially mitigates the risk of serious
adverse effects on U.S. financial stability. For
example, if a U.S. IHC subsidiary that is a
broker-dealer is assumed to fail and enter
resolution under the Securities Investor
Protection Act, the firm should provide an
analysis of the potential impacts on funding
and asset markets and on prime brokerage
clients, bearing in mind the objective of an
orderly resolution.
U.S. MPOE
The firm should have the liquidity
capabilities necessary to execute its U.S.
resolution strategy. A Plan with a U.S. MPOE
strategy should include analysis and
projections of a range of liquidity needs
during resolution, including intraday; reflect
likely failure and resolution scenarios; and
consider the guidance on assumptions
provided in Section X, Format and Structure
of Plans; Assumptions.
V. Governance Mechanisms
U.S. SPOE
A firm should identify the governance
mechanisms that would ensure that
communication and coordination occur
between the boards of the U.S. IHC or a U.S.
subsidiary and the foreign parent to facilitate
the provision of financial support, or if not
forthcoming, any preparatory resolutionrelated actions to facilitate an orderly
resolution. Playbooks, Foreign Parent
Support, and Triggers. Governance playbooks
should detail the board and senior
management actions of U.S. non-branch
material entities that would be needed under
the firm’s U.S. resolution strategy. The
governance playbooks should also include a
discussion of: (A) the firm’s proposed U.S.
communications strategy, both internal and
external; 16 (B) the fiduciary responsibilities
of the applicable board(s) of directors or
other similar governing bodies and how
planned actions would be consistent with
such responsibilities applicable at the time
actions are expected to be taken; (C) potential
conflicts of interest, including interlocking
boards of directors; (D) any employee
retention policy; and (E) any other
limitations on the authority of the U.S. IHC
and the U.S. IHC subsidiary boards and
senior management to implement the U.S.
resolution strategy. All responsible parties
and timeframes for action should be
identified. Governance playbooks should be
16 External communications include those with
U.S. and foreign authorities and other external
stakeholders.

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updated periodically for each entity whose
governing body would need to act under the
firm’s U.S. resolution strategy.
In order to meet liquidity needs at the U.S.
non-branch material entities, the firm may
either fully pre-position liquidity in the U.S.
non-branch material entities or develop a
mechanism for planned foreign parent
support, of any amount not pre-positioned,
for the successful execution of the U.S.
strategy. Mechanisms to support readily
available liquidity may include a term
liquidity facility between the U.S. IHC and
the foreign parent that can be drawn as
needed and as informed by the firm’s RLEN
estimates and liquidity positioning. To the
extent the preferred global resolution strategy
for the firm is a home country SPOE
resolution, the mechanism should be
designed so as to not interfere with the
execution of that strategy. The Plan should
include analysis of how the U.S. IHC/foreign
parent facility is funded or buffered for by
the foreign parent. The sufficiency of the
liquidity should be informed by the firm’s
RLAP and RLEN estimates for the U.S. nonbranch material entities. Additionally, the
Plan should include analysis of the potential
challenges to the planned foreign parent
support mechanism and associated mitigants.
Where applicable, the analysis should
discuss applicable non-U.S. law and crossborder legal challenges (e.g., challenges
related to enforcing contracts governed by
foreign law). The analysis should identify the
mitigant(s) to such challenges that the firm
considers most effective.
The firm should be prepared to increase
communication and coordination at the
appropriate time in order to mitigate
financial, operational, legal, and regulatory
vulnerabilities. To facilitate this
communication and coordination, the firm
should establish clearly identified triggers
linked to specific actions for:
(A) The escalation of information to U.S.
senior management, U.S. risk committee and
U.S. governing bodies to potentially take the
corresponding actions as the U.S. operations
experience material financial distress,
leading eventually to the decision to
implement the U.S. resolution strategy.
i. Triggers should identify when and under
what conditions the U.S. material entities
would transition from business-as-usual
conditions to a stress period.
ii. Triggers should also take into
consideration changes in the foreign parent’s
condition from business-as-usual conditions
through resolution.
(B) The escalation of information to and
discussions with the appropriate governing
bodies to confirm whether the governing
bodies are able and willing to provide
financial resources to support U.S.
operations.
i. Triggers should be based on the firm’s
methodology for forecasting the liquidity and
capital needed to facilitate the U.S. strategy.
For example, triggers may be established that
reflect U.S. non-branch material entities’
financial resources approaching RCEN/RLEN
estimates, with corresponding actions to
confirm the foreign parent’s financial
capability and willingness to provide
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Corresponding escalation procedures,
actions, and timeframes should be
constructed so that breach of the triggers will
allow prerequisite actions to be completed.
For example, breach of the triggers needs to
occur early enough to provide for
communication, coordination, and
confirmation of the provision of resources
from the foreign parent.
Support Within the United States. If the
Plan provides for the provision of capital and
liquidity by a U.S. material entity (e.g., the
U.S. IHC) to its U.S. affiliates prior to the U.S.
IHC’s bankruptcy filing (Support), the Plan
should also include a detailed legal analysis
of the potential state law and bankruptcy law
challenges and mitigants to providing the
Support. Specifically, the analysis should
identify potential legal obstacles and explain
how the firm would seek to ensure that
Support would be provided as planned. Legal
obstacles include claims of fraudulent
transfer, preference, breach of fiduciary duty,
and any other applicable legal theory
identified by the firm. The analysis also
should include related claims that may
prevent or delay an effective recapitalization,
such as equitable claims to enjoin the transfer
(e.g., imposition of a constructive trust by the
court). The analysis should apply the actions
contemplated in the Plan regarding each
element of the claim, the anticipated timing
for commencement and resolution of the
claims, and the extent to which adjudication
of such claim could affect execution of the
firm’s U.S. resolution strategy. The analysis
should include mitigants to the potential
challenges to the planned Support. The Plan
should identify the mitigant(s) to such
challenges that the firm considers most
effective.
Furthermore, the Plan should describe key
motions to be filed at the initiation of any
bankruptcy proceeding related to (as
appropriate) asset sales and other nonroutine matters.
U.S. MPOE
A firm should identify the governance
mechanisms that would ensure that
communication and coordination occur
between the governing body of the U.S.
operations (for example, the boards of the
U.S. IHC or a U.S. subsidiary) and the foreign
parent to facilitate any preparatory
resolution-related actions to facilitate an
orderly resolution. The Plan should also
detail the board and senior management
actions of U.S. material entities that would be
needed under the firm’s U.S. resolution
strategy.
The firm should be prepared to increase
communication and coordination at the
appropriate time in order to mitigate
financial, operational, legal, and regulatory
vulnerabilities. To facilitate this
communication and coordination, the firm
should establish clearly identified triggers
linked to specific actions for the escalation of
information to U.S. senior management, U.S.
risk committee and U.S. governing bodies to
potentially take the corresponding actions as
the U.S. operations experience material
financial distress, leading eventually to the
decision to implement the U.S. resolution
strategy. The triggers should:

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A. Identify when and under what
conditions the U.S. material entities would
transition from business-as-usual conditions
to a stress period.
B. Take into consideration changes in the
foreign parent’s condition from business-asusual conditions through resolution.
VI. Operational
U.S. SPOE
Payment, Clearing, and Settlement Activities
Framework. Maintaining continuity of
payment, clearing, and settlement (PCS)
services is critical for the orderly resolution
of firms that are either users or providers,17
or both, of PCS services. A firm should
demonstrate capabilities for continued access
to PCS services essential to an orderly
resolution under its U.S. resolution strategy
through a framework to support such access
by:
• Identifying clients,18 FMUs, and agent
banks as key from the firm’s perspective for
the firm’s U.S. material entities, identified
critical operations, and core business lines,
using both quantitative (volume and value) 19
and qualitative criteria;
• Mapping U.S. material entities,
identified critical operations, core business
lines, and key clients of the firm’s U.S.
operations to both key FMUs and key agent
banks; and
• Developing a playbook for each key FMU
and key agent bank essential to an orderly
resolution under its U.S. resolution strategy
that reflects the firm’s role(s) as a user and/
or provider of PCS services.
The framework should address direct
relationships (e.g., a firm’s direct
membership in an FMU, a firm’s provision of
clients with PCS services through its own
operations in the United States, or a firm’s
contractual relationship with an agent bank)
and indirect relationships (e.g., a firm’s
provision of clients with access to the
relevant FMU or agent bank through the firm’
membership in or relationship with that
FMU or agent bank, or a firm’s U.S. affiliate
and branch provision of U.S. material entities
and key clients of the firm’s U.S. operations
17 A firm is a user of PCS services if it accesses
PCS services through an agent bank or it uses the
services of a financial market utility (FMU) through
its membership in that FMU or through an agent
bank. A firm is a provider of PCS services if it
provides PCS services to clients as an agent bank
or it provides clients with access to an FMU or
agent bank through the firm’s membership in or
relationship with that service provider. A firm is
also a provider if it provides clients with PCS
services through the firm’s own operations (e.g.,
payment services or custody services).
18 For purposes of this section, a client is an
individual or entity, including affiliates of the firm,
to whom the firm provides PCS services and any
related credit or liquidity offered in connection
with those services.
19 In identifying entities as key, examples of
quantitative criteria may include: for a client,
transaction volume/value, market value of
exposures, assets under custody, usage of PCS
services, and any extension of related intraday
credit or liquidity; for an FMU, the aggregate
volumes and values of all transactions processed
through such FMU; and for an agent bank, assets
under custody, the value of cash and securities
settled, and extensions of intraday credit.

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with access to an FMU or agent bank). The
framework also should address the potential
impact of any disruption to, curtailment of,
or termination of such direct and indirect
relationships on the firm’s U.S. material
entities, identified critical operations, and
core business lines, as well as any
corresponding impact on key clients of the
firm’s U.S. operations.
Playbooks for Continued Access to PCS
Services. The firm is expected to provide a
playbook for each key FMU and key agent
bank that addresses considerations that
would assist the firm and key clients of the
firm’s U.S. operations in maintaining
continued access to PCS services in the
period leading up to and including the firm’s
resolution under its U.S. resolution strategy.
Each playbook should provide analysis of
the financial and operational impact to the
firm’s U.S. material entities and key clients
of the firm’s U.S. operations due to adverse
actions that may be taken by a key FMU or
a key agent bank and contingency actions
that may be taken by the firm. Each playbook
also should discuss any possible alternative
arrangements that would allow continued
access to PCS services for the firm’s U.S.
material entities, identified critical
operations and core business lines, and key
clients of the firm’s U.S. operations, while
the firm is in resolution under its U.S.
resolution strategy. The firm is not expected
to incorporate a scenario in which it loses
key FMU or key agent bank access into its
U.S. resolution strategy or its RLEN and
RCEN estimates. The firm should continue to
engage with key FMUs, key agent banks, and
key clients of the firm’s U.S. operations, and
playbooks should reflect any feedback
received during such ongoing outreach.
Content Related to Users of PCS Services.
Individual key FMU and key agent bank
playbooks should include:
• Descriptions of the firm’s relationship as
a user, including through indirect access,
with the key FMU or key agent bank and the
identification and mapping of PCS services to
the firm’s U.S. material entities, identified
critical operations, and core business lines
that use those PCS services;
• Discussion of the potential range of
adverse actions that may be taken by that key
FMU or key agent bank when the firm is in
resolution under its U.S. resolution
strategy,20 the operational and financial
impact of such actions on the firm’s U.S.
material entities, identified critical
operations, and core business lines, and
contingency arrangements that may be
initiated by the firm in response to potential
adverse actions by the key FMU or key agent
bank; and
• Discussion of PCS-related liquidity
sources and uses in business-as-usual (BAU),
in stress, and in the resolution period,
presented by currency type (with U.S. dollar
equivalent) and by U.S. material entity.
Æ PCS Liquidity Sources: These may
include the amounts of intraday extensions
of credit, liquidity buffer, inflows from FMU
20 Examples of potential adverse actions may
include increased collateral and margin
requirements and enhanced reporting and
monitoring.

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participants, and prefunded amounts of key
clients of the firm’s U.S. operations in BAU,
in stress, and in the resolution period. The
playbook also should describe intraday credit
arrangements (e.g., facilities of the key FMU,
key agent bank, or a central bank) and any
similar custodial arrangements that allow
ready access to a firm’s funds for PCS-related
key FMU and key agent bank obligations
(including margin requirements) in all
currencies relevant to the firm’s
participation, including placements of firm
liquidity at central banks, key FMUs, and key
agent banks.
Æ PCS Liquidity Uses: These may include
margin and prefunding by the firm and key
clients of the firm’s U.S. operations, and
intraday extensions of credit, including
incremental amounts required during
resolution.
Æ Intraday Liquidity Inflows and Outflows:
The playbook should describe the firm’s
ability to control intraday liquidity inflows
and outflows and to identify and prioritize
time-specific payments. The playbook also
should describe any account features that
might restrict the firm’s ready access to its
liquidity sources.
Content Related to Providers of PCS
Services.21 Individual key FMU and key
agent bank playbooks should include:
• Identification and mapping of PCS
services to the firm’s U.S. material entities,
identified critical operations, and core
business lines that provide those PCS
services, and a description of the scale and
the way in which each provides PCS
services;
• Identification and mapping of PCS
services to key clients of the firm’s U.S.
operations to whom the firm’s U.S. material
entities, identified critical operations, and
core business lines provide such PCS
services and any related credit or liquidity
offered in connection with such services;
• Discussion of the potential range of firm
contingency arrangements available to
minimize disruption to the provision of PCS
services to key clients of the firm’s U.S.
operations, including the viability of
transferring activity and any related assets of
key clients of the firm’s U.S. operations, as
well as any alternative arrangements that
would allow the key clients of the firm’s U.S.
operations continued access to PCS services
if the firm could no longer provide such
access (e.g., due to the firm’s loss of key FMU
or key agent bank access), and the financial
and operational impacts of such
arrangements from the firm’s perspective;
• Descriptions of the range of contingency
actions that the firm may take concerning its
provision of intraday credit to key clients of
the firm’s U.S. operations, including analysis
quantifying the potential liquidity the firm
could generate by taking such actions in
21 Where a firm is a provider of PCS services
through the firm’s own operations in the United
States, the firm is expected to produce a playbook
for the U.S. material entities that provide those
services, addressing each of the items described
under ‘‘Content Related to Providers of PCS
Services,’’ which include contingency arrangements
to permit the firm’s key clients of the firm’s U.S.
operations to maintain continued access to PCS
services.

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stress and in the resolution period, such as
(i) requiring key clients of the firm’s U.S.
operations to designate or appropriately preposition liquidity, including through
prefunding of settlement activity, for PCSrelated key FMU and key agent bank
obligations at specific material entities of the
firm (e.g., direct members of key FMUs) or
any similar custodial arrangements that allow
ready access to funds for such obligations in
all relevant currencies of key clients of the
firm’s U.S. operations; (ii) delaying or
restricting PCS activity of key clients of the
firm’s U.S. operations; and (iii) restricting,
imposing conditions upon (e.g., requiring
collateral), or eliminating the provision of
intraday credit or liquidity to key clients of
the firm’s U.S. operations; and
• Descriptions of how the firm will
communicate to key clients of the firm’s U.S.
operations the potential impacts of
implementation of any identified
contingency arrangements or alternatives,
including a description of the firm’s
methodology for determining whether any
additional communication should be
provided to some or all key clients of the
firm’s U.S. operations (e.g., due to BAU usage
of that access and/or related intraday credit
or liquidity of the key client of the firm’s U.S.
operations), and the expected timing and
form of such communication.
Capabilities. The firm is expected to have
and describe capabilities to understand, for
each U.S. material entity, the obligations and
exposures associated with PCS activities,
including contractual obligations and
commitments. The firm should be able to:
• Track the following items by (i) U.S.
material entity and, (ii) with respect to
customers, counterparties, and agents and
service providers, by location and
jurisdiction:
Æ PCS activities, with each activity
mapped to the relevant material entities,
identified critical operations, and core
business lines; 22
Æ Customers and counterparties for PCS
activities, including values and volumes of
various transaction types, as well as used and
unused capacity for all lines of credit; 23
Æ Exposures to and volumes transacted
with FMUs, nostro agents, and custodians;
and 24
Æ Services provided and service level
agreements, as applicable, for other current
agents and service providers (internal and
external); 25
• Assess the potential effects of adverse
actions by FMUs, nostro agents, custodians,
and other agents and service providers,
including suspension or termination of
membership or services, on the firm’s U.S.
operations and customers and counterparties
of those U.S. operations; 26
• Develop contingency arrangements in
the event of such adverse actions; 27 and
• Quantify the liquidity needs and
operational capacity required to meet all PCS
22 12

CFR 243.5(e)(12) and 12 CFR 381.5(e)(12).

23 Id.
24 12

CFR 252.156(g).
CFR 243.5(f)(l)(i) and 12 CFR 381.5(f)(1)(i).
26 12 CFR 252.156(e).
27 Id.
25 12

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obligations, including any change in demand
for and sources of liquidity needed to meet
such obligations.
Managing, Identifying, and Valuing
Collateral. The firm is expected to have and
describe its capabilities to manage, identify,
and value the collateral that the U.S. nonbranch material entities receive from and
post to external parties and affiliates.
Specifically, the firm should:
• Be able to query and provide aggregate
statistics for all qualified financial contracts
concerning cross-default clauses, downgrade
triggers, and other key collateral-related
contract terms—not just those terms that may
be impacted in an adverse economic
environment—across contract types, business
lines, legal entities, and jurisdictions;
• Be able to track both collateral sources
(i.e., counterparties that have pledged
collateral) and uses (i.e., counterparties to
whom collateral has been pledged) at the
CUSIP level on at least a t+1 basis;
• Have robust risk measurements for crossentity and cross-contract netting, including
consideration of where collateral is held and
pledged;
• Be able to identify CUSIP and asset class
level information on collateral pledged to
specific central counterparties by legal entity
on at least a t+1 basis;
• Be able to track and report on interbranch collateral pledged and received on at
least a t+1 basis and have clear policies
explaining the rationale for such inter-branch
pledges, including any regulatory
considerations; and
• Have a comprehensive collateral
management policy that outlines how the
firm as a whole approaches collateral and
serves as a single source for governance.28
In addition, as of the conclusion of any
business day, the firm should be able to:
• Identify the legal entity and geographic
jurisdiction where counterparty collateral is
held;
• Document all netting and rehypothecation arrangements with affiliates
and external parties, by legal entity; and
• Track and manage collateral
requirements associated with counterparty
credit risk exposures between affiliates,
including foreign branches.
At least on a quarterly basis, the firm
should be able to:
• Review the material terms and
provisions of International Swaps and
Derivatives Association Master Agreements
and the Credit Support Annexes, such as
termination events, for triggers that may be
breached as a result of changes in market
conditions;
• Identify legal and operational differences
and potential challenges in managing
collateral within specific jurisdictions,
agreement types, counterparty types,
collateral forms, or other distinguishing
characteristics; and
• Forecast changes in collateral
requirements and cash and non-cash
collateral flows under a variety of stress
scenarios.
28 The

policy may reference subsidiary or related
policies already in place, as implementation may
differ based on business line or other factors.

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Management Information Systems. The
firm should have the management
information systems (MIS) capabilities to
readily produce data on a U.S. legal entity
basis (including any U.S. branch) and have
controls to ensure data integrity and
reliability. The firm also should perform a
detailed analysis of the specific types of
financial and risk data that would be
required to execute the U.S. resolution
strategy and how frequently the firm would
need to produce the information, with the
appropriate level of granularity. The firm
should have the capabilities to produce the
following types of information in a timely
manner and describe these capabilities in the
Plan:
• Financial statements for each material
entity (at least monthly);
• External and inter-affiliate credit
exposures, both on- and off-balance sheet, by
type of exposure, counterparty, maturity, and
gross payable and receivable;
• Gross and net risk positions with
internal and external counterparties;
• Guarantees, cross holdings, financial
commitments and other transactions between
material entities;
• Data to facilitate third-party valuation of
assets and businesses, including risk metrics;
• Key third-party contracts, including the
provider, provider’s location, service(s)
provided, legal entities that are a party to or
a beneficiary of the contract, and key
contractual rights (for example, termination
and change in control clauses);
• Legal agreement information, including
parties to the agreement and key terms and
interdependencies (for example, change in
control, collateralization, governing law,
termination events, guarantees, and crossdefault provisions);
• Service level agreements between
affiliates, including the service(s) provided,
the legal entity providing the service, legal
entities receiving the service, and any
termination/transferability provisions;
• Licenses and memberships to all
exchanges and value transfer networks,
including FMUs;
• Key management and support personnel,
including dual-hatted employees, and any
associated retention agreements;
• Agreements and other legal documents
related to property, including facilities,
technology systems, software, and
intellectual property rights. The information
should include ownership, physical location,
where the property is managed and names of
legal entities and lines of business that the
property supports; and
• Updated legal records for domestic and
foreign entities, including entity type and
purpose (for example, holding company,
bank, broker dealer, and service entity),
jurisdiction(s), ownership, and regulator(s).
Shared and Outsourced Services. The firm
should maintain a fully actionable
implementation plan to ensure the continuity
of shared services that support identified
critical operations 29 or core business lines
29 ‘‘Shared services that support identified critical
operations’’ or ‘‘critical shared services’’ are those
that support identified critical operations
conducted in whole or in material part in the
United States.

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and robust arrangements to support the
continuity of shared and outsourced services,
including, without limitation, appropriate
plans to retain key personnel relevant to the
execution of the firm’s strategy. For example,
specified firms should evaluate internal and
external dependencies and develop
documented strategies and contingency
arrangements for the continuity or
replacement of the shared and outsourced
services that are necessary to maintain
identified critical operations or core business
lines. Examples may include personnel,
facilities, systems, data warehouses, and
intellectual property. Specified firms also
should maintain current cost estimates for
implementing such strategies and
contingency arrangements.
If a material entity provides shared services
that support identified critical operations or
core business lines, and the continuity of
these shared services relies on the assumed
cooperation, forbearance, or other nonintervention of regulator(s) in any
jurisdiction, the Plan should discuss the
extent to which the resolution or insolvency
of any other group entities operating in that
same jurisdiction may adversely affect the
assumed cooperation, forbearance, or other
regulatory non-intervention. If a material
entity providing shared services that support
identified critical operations or core business
lines is located outside of the United States,
the Plan should discuss how the firm will
ensure the operational continuity of such
shared services through resolution.
The firm should (A) maintain an
identification of all shared services that
support identified critical operations or core
business lines; (B) maintain a mapping of
how/where these services support its core
business lines and identified critical
operations; (C) incorporate such mapping
into legal entity rationalization criteria and
implementation efforts; and (D) mitigate
identified continuity risks through
establishment of service-level agreements
(SLAs) for all shared services that support
identified critical operations or core business
lines.
SLAs should fully describe the services
provided, reflect pricing considerations on an
arm’s-length basis where appropriate, and
incorporate appropriate terms and conditions
to (A) prevent automatic termination upon
certain resolution-related events and (B)
achieve continued provision of such services
during resolution.30 The firm should also
store SLAs in a central repository or
repositories located in or immediately
accessible from the U.S. at all times,
including in resolution (and subject to
enforceable access arrangements) in a
searchable format. In addition, the firm
should ensure the financial resilience of
internal shared service providers by
maintaining working capital for six months
(or through the period of stabilization as
required in the firm’s U.S. resolution
strategy) in such entities sufficient to cover
contract costs, consistent with the U.S.
30 The firm should consider whether these SLAs
should be governed by the laws of a U.S. state and
expressly subject to the jurisdiction of a court in the
U.S.

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resolution strategy. The firm should
demonstrate that such working capital is held
in a manner that ensures its availability for
its intended purpose.
The firm should identify all critical service
providers and outsourced services that
support identified critical operations or core
business lines and identify any that could not
be promptly substituted. The firm should (A)
evaluate the agreements governing these
services to determine whether there are any
that could be terminated upon
commencement of any resolution despite
continued performance, and (B) update
contracts to incorporate appropriate terms
and conditions to prevent automatic
termination upon commencement of any
resolution proceeding and facilitate
continued provision of such services. Relying
on entities projected to survive during
resolution to avoid contract termination is
insufficient to ensure continuity. In the Plan,
the firm should document the amendment of
any such agreements governing these
services.
Qualified Financial Contracts. The Plan
should reflect the current state of how the
early termination of qualified financial
contracts could impact the resolution of the
firm’s operations, including potential
termination of any contracts that are not
subject to contractual or regulatory stays of
cross-default rights. Specifically, the Plan is
expected to reflect the firm’s progress
regarding contractual stays in qualified
financial contracts as of the date the firm
submits its Plan or as of a specified earlier
date. A firm that has adhered to the
International Swaps and Derivatives
Association’s (ISDA) 2018 U.S. Resolution
Stay Protocol or its antecedent, ISDA’s 2015
Universal Resolution Stay Protocol (together,
the Protocols) should discuss the extent of
the firm’s adherence to the Protocols in its
Plan (and may also discuss the impact on
U.S. operations of the firm’s adherence to
ISDA’s 2016 Jurisdictional Modular Protocol
on its non-U.S. operations). A Plan should
also explain the firm’s processes for entering
bilateral contracts with third-party entities
that do not adhere to the Protocols and
provide examples of the contractual language
that is used under those circumstances.
U.S. MPOE
Payment, Clearing, and Settlement (PCS)
Capabilities. Firms are expected to have and
describe capabilities to understand, for each
U.S. material entity, its obligations and
exposures associated with PCS activities,
including contractual obligations and
commitments. For example, firms should be
able to:
• As users of PCS services:
Æ Track the following items by: (i) U.S.
material entity; and (ii) with respect to
customers, counterparties, and agents and
service providers, location and jurisdiction:
D PCS activities, with each activity
mapped to the relevant material entities,
identified critical operations, and core
business lines;
D Customers and counterparties for PCS
activities, including values and volumes of
various transaction types, as well as used and
unused capacity for all lines of credit;

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D Exposures to and volumes transacted
with FMUs, nostro agents, and custodians;
and
D Services provided and service level
agreements, as applicable, for other current
agents and service providers (internal and
external).
Æ Assess the potential effects of adverse
actions by FMUs, nostro agents, custodians,
and other agents and service providers,
including suspension or termination of
membership or services, on the firm’s U.S.
operations and customers and counterparties
of those U.S. operations;
Æ Develop contingency arrangements in
the event of such adverse actions; and
Æ Quantify the liquidity needs and
operational capacity required to meet all PCS
obligations, including intraday requirements.
• As providers of PCS services:
Æ Identify their PCS clients of their U.S
operations and the services they provide to
these clients, including volumes and values
of transactions;
Æ Quantify and explain time-sensitive
payments; and
Æ Quantify and explain intraday credit
provided.
Managing, Identifying and Valuing
Collateral. The firm should have appropriate
capabilities related to managing, identifying,
and valuing the collateral that the U.S. nonbranch material entities receive from and
posts to external parties and its affiliates,
including tracking collateral received,
pledged, and available at the CUSIP level and
measuring exposures.
Management Information Systems. The
firm should have the management
information systems (MIS) capabilities to
readily produce data on a U.S. legal entity
basis (including any U.S. branch) and have
controls to ensure data integrity and
reliability. The firm also should perform a
detailed analysis of the specific types of
financial and risk data that would be
required to execute the U.S. resolution
strategy. The firm should have the
capabilities to produce the following types of
information, as appropriate for its U.S.
resolution strategy, in a timely manner and
describe these capabilities in the Plan:
• Financial statements for each material
entity (at least monthly);
• External and inter-affiliate credit
exposures, both on- and off-balance sheet, by
type of exposure, counterparty, maturity, and
gross payable and receivable;
• Gross and net risk positions with
internal and external counterparties;
• Guarantees, cross holdings, financial
commitments and other transactions between
material entities;
• Data to facilitate third-party valuation of
assets and businesses, including risk metrics;
• Key third-party contracts, including the
provider, provider’s location, service(s)
provided, legal entities that are a party to or
a beneficiary of the contract, and key
contractual rights (for example, termination
and change in control clauses);
• Legal agreement information, including
parties to the agreement and key terms and
interdependencies (for example, change in
control, collateralization, governing law,
termination events, guarantees, and crossdefault provisions);

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• Service level agreements between
affiliates, including the service(s) provided,
the legal entity providing the service, legal
entities receiving the service, and any
termination/transferability provisions;
• Licenses and memberships to all
exchanges and value transfer networks,
including FMUs;
• Key management and support personnel,
including dual-hatted employees, and any
associated retention agreements;
• Agreements and other legal documents
related to property, including facilities,
technology systems, software, and
intellectual property rights. The information
should include ownership, physical location,
where the property is managed and names of
legal entities and lines of business that the
property supports; and
• Updated legal records for domestic and
foreign entities, including entity type and
purpose (for example, holding company,
bank, broker dealer, and service entity),
jurisdiction(s), ownership, and regulator(s).
Shared and Outsourced Services. The firm
should maintain robust arrangements to
support the continuity of shared and
outsourced services that support any
identified critical operations or are material
to the execution of the U.S. resolution
strategy, including appropriate plans to
retain key personnel relevant to the
execution of the firm’s strategy. For example,
specified firms should evaluate internal and
external dependencies and develop
documented strategies and contingency
arrangements for the continuity or
replacement of the shared and outsourced
services that are necessary to maintain
identified critical operations or are material
to the execution of the U.S. resolution
strategy. Examples may include personnel,
facilities, systems, data warehouses, and
intellectual property. Specified firms also
should maintain current cost estimates for
implementing such strategies and
contingency arrangements. If a material
entity provides shared services that support
identified critical operations,31 or are
material to the execution of the U.S.
resolution strategy, and the continuity of
these shared services relies on the assumed
cooperation, forbearance, or other nonintervention of regulator(s) in any
jurisdiction, the Plan should discuss the
extent to which the resolution or insolvency
of any other group entities operating in that
same jurisdiction may adversely affect the
assumed cooperation, forbearance, or other
regulatory non-intervention. If a material
entity providing shared services that support
identified critical operations, or are material
to the execution of the U.S. resolution
strategy, is located outside of the United
States, the Plan should discuss how the firm
will ensure the operational continuity of
such shared services through resolution.
The firm should (A) maintain an
identification of all shared services that
support identified critical operations or are
material to the execution of the U.S.
resolution strategy, and (B) mitigate
identified continuity risks through
31 This should be interpreted to include data
access and intellectual property rights.

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establishment of SLAs for all shared services
supporting identified critical operations or
are material to the execution of the U.S.
resolution strategy. SLAs should fully
describe the services provided and
incorporate appropriate terms and conditions
to: (A) prevent automatic termination upon
certain resolution-related events; and (B)
achieve continued provision of such services
during resolution.32
The firm should identify all critical service
providers and outsourced services that
support identified critical operations or are
material to the execution of the U.S.
resolution strategy. Any of these services that
cannot be promptly substituted should be
identified in a firm’s Plan. The firm should:
(A) evaluate the agreements governing these
services to determine whether there are any
that could be terminated upon
commencement of any resolution despite
continued performance; and (B) update
contracts to incorporate appropriate terms
and conditions to prevent automatic
termination upon commencement of any
resolution proceeding and facilitate
continued provision of such services. Relying
on entities projected to survive during
resolution to avoid contract termination is
insufficient to ensure continuity. In the Plan,
the firm should document the amendment of
any such agreements governing these
services.

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VII. Branches
U.S. SPOE & U.S. MPOE
Continuity of Operations. If the Plan
assumes that federal or state regulators, as
applicable, do not take possession of any U.S.
branch that is a material entity, the Plan
should support that assumption.
For any U.S. branch that is a material
entity, the Plan should describe and
demonstrate how the branch would continue
to facilitate FMU access for identified critical
operations and meet funding needs. For such
a U.S. branch, the Plan should describe how
it would meet supervisory requirements
imposed by state regulators or the
appropriate Federal banking agency, as
appropriate, including maintaining a net due
to position and complying with heightened
asset maintenance requirements.33 In
addition, the Plan should describe how such
a U.S. branch’s third-party creditors would
be protected such that the state regulator or
appropriate Federal banking agency would
allow the branch to continue operations.
Impact of the Cessation of Operations. The
Plan should provide an analysis of the
impact of the cessation of operations of any
U.S. branch that is a material entity on the
firm’s FMU access and identified critical
operations, even if such scenario is not
contemplated as part of the U.S. resolution
strategy. The analysis should include a
description of how identified critical
operations could be transferred to a U.S. IHC
32 The firm should consider whether these SLAs
should be governed by the laws of a U.S. state and
expressly subject to the jurisdiction of a court in the
United States.
33 Firms should take into consideration historical
practice, by applicable regulators, regarding asset
maintenance requirements imposed during stress.

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subsidiary or sold in resolution, the obstacles
presented by the cessation of shared services
that support identified critical operations
provided by any U.S. branch that is a
material entity, and mitigants that could
address such obstacles in a timely manner.
VIII. Legal Entity Rationalization &
Separability
Legal Entity Rationalization
U.S. SPOE
Legal Entity Rationalization Criteria (LER
Criteria). A firm should develop and
implement legal entity rationalization criteria
that support the firm’s U.S. resolution
strategy and minimize risk to U.S. financial
stability in the event of resolution. LER
Criteria should consider the best alignment of
legal entities and business lines to improve
the resolvability of U.S. operations under
different market conditions. LER Criteria
should govern the corporate structure and
arrangements between the U.S. subsidiaries
and U.S. branches in a way that facilitates
resolvability of the firm’s U.S. operations as
the firm’s U.S. activities, technology,
business models, or geographic footprint
change over time.
Specifically, application of the criteria
should:
(A) Ensure that the allocation of activities
across the firm’s U.S. branches and U.S. nonbranch material entities support the firm’s
U.S. resolution strategy and minimize risk to
U.S. financial stability in the event of
resolution;
(B) Facilitate the recapitalization and
liquidity support of U.S. IHC subsidiaries, as
required by the firm’s U.S. resolution
strategy. Such criteria should include clean
lines of ownership and clean funding
pathways between the foreign parent, the
U.S. IHC, and U.S. IHC subsidiaries;
(C) Facilitate the sale, transfer, or winddown of certain discrete operations within a
timeframe that would meaningfully increase
the likelihood of an orderly resolution in the
United States, including provisions for the
continuity of associated services and
mitigation of financial, operational, and legal
challenges to separation and disposition;
(D) Adequately protect U.S. subsidiary
insured depository institutions from risks
arising from the activities of any nonbank
U.S. subsidiaries (other than those that are
subsidiaries of an insured depository
institution); and
(E) Minimize complexity that could
impede an orderly resolution in the United
States and minimize redundant and dormant
entities.
These criteria should be built into the
firm’s ongoing process for creating,
maintaining, and optimizing the firm’s U.S.
structure and operations on a continuous
basis.
U.S. MPOE
Legal Entity Structure. A firm should
maintain a legal entity structure that supports
the firm’s U.S. resolution strategy and
minimizes risk to U.S. financial stability in
the event of the resolution of the firm’s U.S.
operations. The firm should consider factors
such as business activities; banking group
structures and booking models and practices;

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and potential sales, transfers, or wind-downs
during resolution. The Plan should describe
how the firm’s U.S. legal entity structure
aligns core business lines and any identified
critical operations with the firm’s material
entities to support the firm’s U.S. resolution
strategy. To the extent a material entity IDI
relies upon an affiliate that is not the IDI’s
subsidiary during resolution of its U.S.
entities, including for the provision of shared
services, the firm should discuss its rationale
for the legal entity structure and associated
resolution risks and potential mitigants.
The firm’s corporate structure and
arrangements among U.S. legal entities
should be considered and maintained in a
way that facilitates the firm’s resolvability as
its activities, technology, business models, or
geographic footprint change over time.
Separability
U.S. SPOE
Separability. The firm should identify
discrete U.S. operations that could be sold or
transferred in resolution, with the objective
of providing optionality in resolution under
different market conditions.
A firm’s separability options should be
actionable, and impediments to their
projected mitigation strategies should be
identified in advance. Firms should consider
potential consequences for U.S. financial
stability of executing each option, taking into
consideration impacts on counterparties,
creditors, clients, depositors, and markets for
specific assets. The level of detail and
analysis should vary based on a firm’s risk
profile and scope of operations. Additionally,
information systems should be robust enough
to produce the required data and information
needed to execute separability options.
Further, the firm should have, and be able
to demonstrate, the capability to populate in
a timely manner a data room with
information pertinent to a potential
divestiture of the identified separability
options (including, but not limited to, carveout financial statements, valuation analysis,
and a legal risk assessment). Within the Plan,
the firm should demonstrate how the firm’s
LER Criteria and implementation efforts
support meeting the separability-related
guidance above. The Plan should also
provide the separability analysis noted
above. Finally, the Plan should include a
description of the firm’s legal entity
rationalization governance process.
U.S. MPOE
A Plan should include options for the sale,
transfer, or disposal of U.S. significant assets,
portfolios, legal entities, or business lines in
resolution that may be executed in a
reasonable period of time. For each option,
supporting analysis should include: an
execution plan that includes an estimated
time frame for implementation, a description
of any impediments to execution of the
option, and mitigation strategies to address
those impediments; a description of the
assumptions underpinning the option; a
financial impact assessment that describes
the impact of executing the option; and an
identified critical operation impact
assessment that describes how execution of
the option may affect the provision of any

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identified critical operation. Information
systems should be robust enough to produce
the required data and information needed to
execute the options.

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IX. Insured Depository Institution (IDI)
Resolution
MPOE
If the Plan includes a strategy that
contemplates the separate resolution of a U.S.
IDI that is a material entity, the Plan should
demonstrate how this could be achieved in
a manner that is consistent with the overall
objective of the Plan to substantially mitigate
the risk that the failure of the specified firm
would have serious adverse effects on
financial stability in the United States while
also complying with the statutory and
regulatory requirements governing IDI
resolution. More specifically,
• If the strategy is other than payout
liquidation (e.g., a bridge depository
institution (BDI)), the Plan should provide
information supporting the feasibility of this
strategy. Under the FDI Act, the FDIC
generally would complete a least-cost
analysis when resolving a failed bank at the
time of entry into resolution. A Plan may use
an approach such as one of the following in
lieu of performing a complete least-cost
analysis to demonstrate the feasibility of the
proposed strategy.34
Æ A Plan may demonstrate that a strategy
involving an all-deposit BDI would be
permissible under the least-cost test of the
FDI Act by presenting an analysis which
shows that the strategy results in no loss to
the Deposit Insurance Fund (DIF) by
demonstrating that the incremental estimated
cost to the DIF by having the BDI assume all
uninsured deposits is offset by the
preservation of franchise value connected to
the uninsured deposits after accounting for
the amount of any loss-absorbing debt
instruments and other liabilities subordinate
to the depositor class that would be left
behind in the receivership.
Æ A Plan may demonstrate the feasibility
of a strategy involving a BDI that assumes all
insured deposits and a portion of uninsured
deposits by providing an advance dividend
to uninsured depositors for a portion of their
deposit claim, as well as the basis for that
dividend, and pursuant to which a loss to the
DIF occurs, by presenting an analysis
comparing the cost of the proposed strategy
to the cost of payout liquidation and
demonstrating:
D The incremental estimated cost to the
DIF created by the BDI’s assumption of the
portion of uninsured deposits assumed is
offset by the franchise value preserved by
maintaining the assumed uninsured deposits,
after accounting for the amount of any longterm debt and other liabilities subordinate to
the depositor class that would be left behind
in the receivership; 35
D The loss to the DIF under the proposed
strategy (including the amounts paid by the
DIF for more favorable treatment, relative to
a payout liquidation, of a portion of
uninsured deposits) is less than or equal to
34 See 12 U.S.C. 1823(c)(4)(A)(ii) and 12 U.S.C.
1821(n)(2)(A).
35 See 12 U.S.C. 1821(d)(11).

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the loss to the DIF that would be incurred
through a payout liquidation of the IDI; and
Æ The deposit payout process for any
uninsured deposits that remain in the
receivership may be executed in a manner
that substantially mitigates the risk of serious
adverse effects on U.S. financial stability.
• If the Plan’s strategy envisions a payout
liquidation for the IDI, with or without use
of a Deposit Insurance National Bank or a
paying agent, the Plan should demonstrate
how the deposit payout and asset liquidation
process would be executed in a manner that
substantially mitigates the risk of serious
adverse effects on U.S. financial stability.
• In all cases, the Plan should show that
implementation of the resolution, including
the impact on depositors whose accounts are
not transferred in whole or in part to the BDI,
would not create the risk of serious adverse
effects on U.S. financial stability.
Regardless of the IDI resolution strategy
chosen, the Plan should assume asset
valuations consistent with the severely
adverse stress economic scenario and the
IDI’s condition as a failed institution, as
referenced in ‘‘Guidance regarding
Assumptions,’’ Items 4 and 7 below. The
Plan, in light of such conditions, should
explain the process for determining asset or
business franchise values, including
providing detailed supporting descriptions
such as references to historical pricing,
benchmarks, or recognized models; evidence
supporting client attrition rates; and other
relevant information.
With respect to exit from IDI resolution
proceedings, a Plan could support the
feasibility of an asset liquidation or BDI exit
strategy by, for example, describing an
actionable process, based on historical
precedent or otherwise supportable
projections, that winds down certain
businesses, includes the sale of assets and
deposits to multiple acquirers, or culminates
in a capital markets transaction, such as an
initial public offering or a private placement
of securities.
X. Format and Structure of Plans;
Assumptions
U.S. SPOE & U.S. MPOE
Format of Plan
Executive Summary. The Plan should
contain an executive summary consistent
with the Rule, which must include, among
other things, a concise description of the key
elements of the firm’s strategy for an orderly
resolution. In addition, the executive
summary should include a discussion of the
firm’s assessment of any impediments to the
firm’s U.S. resolution strategy and its
execution, as well as the steps it has taken
to address any identified impediments.
Narrative. The Plan should include a
strategic analysis consistent with the Rule.
This analysis should take the form of a
concise narrative that enhances the
readability and understanding of the firm’s
discussion of its strategy for an orderly
resolution in bankruptcy or other applicable
insolvency regimes (Narrative).
Appendices. The Plan should contain a
sufficient level of detail and analysis to
substantiate and support the strategy

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described in the Narrative. Such detail and
analysis should be included in appendices
that are distinct from and clearly referenced
in the related parts of the Narrative
(Appendices).
Public Section. The Plan must be divided
into a public section and a confidential
section consistent with the requirements of
the Rule.
Other Informational Requirements. The
Plan must comply with all other
informational requirements of the Rule. The
firm may incorporate by reference previously
submitted information as provided in the
Rule.
Guidance Regarding Assumptions.
1. The Plan should be based on the current
state of the applicable legal and policy
frameworks. Pending legislation or regulatory
actions may be discussed as additional
considerations.
2. The firm must submit a Plan that does
not rely on the provision of extraordinary
support by the United States or any other
government to the firm or its subsidiaries to
prevent the failure of the firm.36 The firm
should not submit a Plan that assumes the
use of the systemic risk exception to the
least-cost test in the event of a failure of an
IDI requiring resolution under the FDI Act.
3. The firm should not assume that it will
be able to sell identified critical operations or
core business lines, or that unsecured
funding will be available immediately prior
to filing for bankruptcy.
4. The U.S. resolution strategy may be
based on an idiosyncratic event or action,
including a series of compounding events.
The firm should justify use of that
assumption, consistent with the conditions of
the economic scenario.
5. Within the context of the applicable
idiosyncratic scenario, markets are
functioning and competitors are in a position
to take on business. If a firm’s Plan assumes
the sale of assets, the firm should take into
account all issues surrounding its ability to
sell in market conditions present in the
applicable economic condition at the time of
sale (i.e., the firm should take into
consideration the size and scale of its
operations as well as issues of separation and
transfer).
6. For a firm that adopts a U.S. MPOE
strategy, the Plan should demonstrate and
describe how the failure event(s) results in
material financial distress of the U.S.
operations.37 In particular, the Plan should
consider the likelihood that there would be
a diminution of the firm’s liquidity buffer in
the stress period prior to filing for
bankruptcy from high unexpected outflows
of deposits and increased liquidity
requirements from counterparties. Though
the immediate failure event may be liquidityrelated and associated with a lack of market
confidence in the financial condition of the
covered company or its material legal entity
subsidiaries prior to the final recognition of
losses, the demonstration and description of
36 12 CFR 243.4(a)(4)(ii) and 12 CFR
381.4(a)(4)(ii).
37 See Section 11(c)(5) of the FDI Act, codified at
11 U.S.C. 1821(c)(5), which details grounds for
appointing the FDIC as conservator or receiver of
an IDI.

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material financial distress may also include
depletion of capital. Therefore, the Plan
should also consider the likelihood of the
depletion of capital.
7. The firm should not assume any waivers
of section 23A or 23B of the Federal Reserve
Act in connection with the actions proposed
to be taken prior to or in resolution.
8. The Plan should support any
assumptions that the firm will have access to
the Discount Window and/or other
borrowings during the period immediately
prior to entering bankruptcy. To the extent
the firm assumes use of the Discount
Window and/or other borrowings, the Plan
should support that assumption with a
discussion of the operational testing
conducted to facilitate access in a stress
environment, placement of collateral and the
amount of funding accessible to the firm. The
firm may assume that its depository
institutions will have access to the Discount
Window only for a few days after the point
of failure to facilitate orderly resolution.
However, the firm should not assume its
subsidiary depository institutions will have
access to the Discount Window while
critically undercapitalized, in FDIC
receivership, or operating as a bridge bank,
nor should it assume any lending from a
Federal Reserve credit facility to a non-bank
affiliate.
Financial Statements and Projections. The
Plan should include the actual balance sheet
for each material entity and the consolidating
balance sheet adjustments between material
entities as well as pro forma balance sheets
for each material entity at the point of failure
and at key junctures in the execution of the
U.S. resolution strategy. It should also
include statements of projected sources and
uses of funds for the interim periods. The pro
forma financial statements and
accompanying notes in the Plan must clearly
evidence the failure trigger event; the Plan’s
assumptions; and any transactions that are
critical to the execution of the Plan’s
preferred strategy, such as recapitalizations,
the creation of new legal entities, transfers of
assets, and asset sales and unwinds.
Material Entities. Material entities should
encompass those entities, including foreign
offices and branches, which are significant to
the maintenance of an identified critical

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operation or core business line. If the abrupt
disruption or cessation of a core business line
might have systemic consequences to U.S.
financial stability, the entities essential to the
continuation of such core business line
should be considered for material entity
designation. Material entities should include
the following types of entities:
1. Any U.S.-based or non-U.S. affiliates,
including any branches, that are significant
to the activities of an identified critical
operation conducted in whole or material
part in the United States.
2. Subsidiaries or foreign offices whose
provision or support of global treasury
operations, funding, or liquidity activities
(inclusive of intercompany transactions) is
significant to the activities of an identified
critical operation.
3. Subsidiaries or foreign offices that
provide material operational support in
resolution (key personnel, information
technology, data centers, real estate or other
shared services) to the activities of an
identified critical operation.
4. Subsidiaries or foreign offices that are
engaged in derivatives booking activity that
is significant to the activities of an identified
critical operation, including those that
conduct either the internal hedge side or the
client-facing side of a transaction.
5. Subsidiaries or foreign offices engaged in
asset custody or asset management that are
significant to the activities of an identified
critical operation.
6. Subsidiaries or foreign offices holding
licenses or memberships in clearinghouses,
exchanges, or other FMUs that are significant
to the activities of an identified critical
operation.
7. For each material entity (including a
branch), the Plan should enumerate, on a
jurisdiction-by-jurisdiction basis, the specific
mandatory and discretionary actions or
forbearances that regulatory and resolution
authorities would take during resolution,
including any regulatory filings and
notifications that would be required as part
of the preferred strategy, and explain how the
Plan addresses the actions and forbearances.
Describe the consequences for the covered
company’s U.S. resolution strategy if specific
actions in a non-U.S. jurisdiction were not
taken, delayed, or forgone, as relevant.

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XI. Public Section
U.S. SPOE & U.S. MPOE
The purpose of the public section is to
inform the public’s understanding of the
firm’s U.S. resolution strategy and how it
works.
The public section should discuss the steps
that the firm is taking to improve
resolvability under the U.S. Bankruptcy
Code. The public section should provide
background information on each material
entity and should be enhanced by including
the firm’s rationale for designating material
entities. The public section should also
discuss, at a high level, the firm’s intra-group
financial and operational interconnectedness
(including the types of guarantees or support
obligations in place that could impact the
execution of the firm’s strategy).
The discussion of strategy in the public
section should broadly explain how the firm
has addressed any deficiencies,
shortcomings, and other key vulnerabilities
that the agencies have identified in prior plan
submissions. For each material entity, it
should be clear how the strategy provides for
continuity, transfer, or orderly wind-down of
the entity and its operations. There should
also be a description of the resulting
organization upon completion of the
resolution process.
The public section may note that the Plan
is not binding on a bankruptcy court or other
resolution authority and that the proposed
failure scenario and associated assumptions
are hypothetical and do not necessarily
reflect an event or events to which the firm
is or may become subject.
By order of the Board of Governors of the
Federal Reserve System.
Ann E. Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on August 29,
2023.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2023–19268 Filed 9–18–23; 8:45 am]
BILLING CODE 6210–01–6714–01–P

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