Alert March 12, 2013

OCC Issues Guidance Concerning Process by Which National Banks and Thrifts Sponsoring a Short-Term Investment Fund Must Make Monthly Disclosures to the OCC

The OCC released a bulletin (the “Bulletin”) providing guidance to national banks and thrifts (“Banks”) that manage short-term investment funds (“STIFs”) on the process such Banks must use for making monthly reports to the OCC.  Pursuant to the OCC rule (12 CFR 9.18(b)(4)(ii)(B), the “STIF Rule”) that imposes additional requirements on Banks managing STIFs that value assets at amortized cost, rather than mark-to-market value, for purposes of admissions and withdrawals, such Banks will be required to provide participating accounts and the OCC with significant portfolio-level and security-level information within five business days after the end of each month.  The STIF Rule was summarized and discussed in the October 30, 2012 Financial Services Alert

Banks managing STIFs will be required to comply with all provisions of the STIF Rule beginning July 1, 2013, with the first monthly reports due August 7, 2013.  These reports will need to include, with respect to each STIF a Bank manages, total assets under management, market value and amortized cost valuations, portfolio maturity measures, and identifying information with respect to each security held by such STIF.  As promised in the preamble to the release of the STIF Rule, the OCC in the Bulletin has informed Banks how to gain access to the secure file transfer protocol website through which they must submit such reports.  The process is explained on the OCC’s website, which provides the registration request form, a template spreadsheet for the monthly reports and related instructions. 

Goodwin Procter  LLP has advised a number of clients on matters related to the STIF Rule and would be pleased to address any questions you have regarding the requirements imposed by the STIF Rule, including those related to avoiding some of the potential adverse consequences of the STIF Rule.  We also would be pleased to address potential alternative approaches to dealing with the significant impact of the STIF Rule on STIFs and their participants.