IRS Form 1099, 1099-NEC, and Form 1099-MISC: Advanced Issues and Updates

Regulation EE: Netting Eligibility for Financial Institutions

$69.00

SKU: 410328

Description

Gain insight into the definitions, provisions, and eligibility tests of the bilateral netting provisions of FDICIA and Regulation EE.
Financial contracts often contain provisions that facilitate netting of various payment obligations and entitlements. This netting is important to both credit risk assessments and regulatory capital calibrations. Many counterparties are subject to insolvency regimes that provide special protections to these netting arrangements. However, in some cases, a counterparty may not be eligible for such a regime. The netting provisions of FDICIA may provide certainty that netting rights against these counterparties will be enforced. This presentation will help individuals responsible for assessing the risks associated with various financial contracts assess when FDICIA may apply to protect netting rights. The presentation will explain the definitions and provisions of the bilateral netting provisions of FDICIA and Regulation EE, as well as the two primary tests the Federal Reserve Board of Governors has developed to determine eligibility under FDICIA. This topic is critical for financial institutions to ensure their netting rights are protected during insolvency proceedings.

Date: 2023-06-27 Start Time: 1:00 PM ET End Time: 1:35 PM ET

Learning Objectives

* You will be able to recognize when FDICIA and Regulation EE apply.

* You will be able to define financial institution under FDICIA and Regulation EE.

* You will be able to identify which financial institutions and financial contracts are eligible for protection under FDICIA.

* You will be able to review eligibility under the activitiesbased test and charterbased test of Regulation EE.

FDICIA Background
• FDICIA’s Enactment
• Sections 401• 407 of FDICIA
• Netting Provisions
• FDICIA Provides Certainty to Financial Institutions With Netting Agreements That May Not Be Covered by Safe Harbors Under Other Regimes, Such as the Bankruptcy Code

Key Definitions Under FDICIA
• Review Definitions of Covered Contractual Payment Entitlement, Covered Contractual Payment Obligation, Payment, and Failed Financial Institution
• FDICIA’s Netting Protections Are Applicable to ‘Netting Contracts’
• FDICIA’s Protection Is Only Available If Both Parties to a Particular Agreement Are ‘Financial Institutions’

Regulation EE
• Implements the Board’s Authority to Designate Certain Institutions as Financial Institutions for the Purpose of FDICIA
• Two-Part Activities-Based Test
• The Qualitative Prong
• The Quantitative Prong
• Regulation EE’s Definition of Financial Contract
• The Amendment of Regulation EE in 2021

CLE (Please check the Detailed Credit Information page for states that have already been approved) ,Additional credit may be available upon request. Contact Lorman at 866-352-9540 for further information.

Brandon M. Hammer-Cleary Gottlieb Steen & Hamilton LLP