US Office of the Comptroller of the Currency Publishes Final Rule Regarding Mandatory Contractual Stay Requirements for Qualified Financial Contracts

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The OCC published a final rule requiring all covered qualified financial contracts of covered banks to contain a contractual stay-and-transfer provision. This provision is similar to the stay-and-transfer provision that is statutorily required under Title II of the Dodd-Frank Act and the Federal Deposit Insurance Act. The OCC final rule also limits the exercise of default rights in the event of the insolvency of a covered bank’s affiliate. In connection with these provisions, the final rule makes conforming changes to the OCC’s capital adequacy standards and liquidity risk measurement standards. The Federal Register notice notes that the final rule is substantively identical to the provision adopted by the Federal Reserve Board and by the FDIC. The OCC final rule will take effect January 1, 2018.

View the final rule.
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