Summary: |
The federal banking agencies, along with the U.S.
Securities and Exchange Commission (the Agencies), have issued a statement regarding the treatment of
Collateralized Debt Obligations (CDOs) that contain Trust Preferred Securities (TruPS) under section
13 of the Bank Holding Company Act, which implements section 619 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (Dodd-Frank Act), also known as the "Volcker Rule." The Agencies are
currently considering whether it would be appropriate and consistent with the Dodd-Frank Act not to
subject TruPS CDOs to the investment prohibitions of the Volcker Rule.
Statement of Applicability to Institutions with Total Assets Under $1 Billion: This Financial Institution Letter is applicable to all institutions holding TruPS CDOs regardless of asset size. |
Highlights:
The attached statement notes that:
The FDIC recommends that banking organizations consider this statement of pending regulatory action and, once it is taken, the action itself when making any accounting or economic decisions related to their holdings of TruPS CDOs and their treatment under the Volcker Rule.
Distribution:
Suggested Routing:
Karl Reitz, Chief, Capital Markets Strategies, at kreitz@fdic.gov or (202) 898-6888 Michael Spencer, Senior Policy Analyst, at michspencer@fdic.gov or (202) 898-6888
Note:
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Additional Related Topics:
- Dodd-Frank Wall Street Reform and Consumer Protection Act
- Bank Holding Company Act