The FRB adopted a final rule (the “ Final Rule”) concerning the requirement under Section 165(d) of the Dodd-Frank Act that large bank holding companies with assets of $50 billion or more and other financial companies designated by the Financial Stability Oversight Counsel as “systematically important” annually submit formal resolution plans referred to as “living wills.” Each such plan must describe the covered company’s strategy for rapid and orderly resolution in bankruptcy during times of financial distress. A resolution plan must include 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, interconnections and interdependencies, and management information systems.
Under the Final Rule, covered companies will submit their initial resolution plans on a staggered basis. The first group of covered companies, generally those with $250 billion or more in non-bank assets, must submit their initial plans on or before July 1, 2012; the second group, generally those with $100 billion or more, but less than $250 billion, in total non-bank assets, must submit their initial plans on or before July 1, 2013; and the remaining covered companies, generally those subject to the rule with less than $100 billion in total non-bank assets, must submit their initial plans on or before December 31, 2013.
The Final Rule was developed jointly with the FDIC, which issued its final rule in September 2011 (as discussed in the September 20, 2011 Financial Services Alert). The Final Rule will take effect November 30, 2011.