Liquidity Coverage Ratio – Treatment of Certain Municipal Obligations as High-Quality Liquid Assets

Published on:
September 28, 2018
Submitted to:
Federal Reserve, the OCC and the FDIC
Submitted by:
SIFMA

Summary

SIFMA provided comments to the Federal Reserve, the OCC and the FDIC on their interim final rule providing Level 2B HQLA treatment for certain municipal securities. SIFMA believes the Rule represents a sound regulatory implementation of Section 403 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (PL 115-174, the “Act”).

See also: Liquidity Coverage Ratio: Treatment of Certain Municipal Obligations as High-Quality Liquid Assets

Excerpt

Legislative and Regulatory Activities Division

Office of the Comptroller of the Currency

400 7th Street SW, Suite 3E-218

Washington, DC 20219

Docket ID OCC-2018-0013 

Ann E. Misback, Secretary

Board of Governors of the Federal Reserve System

20th Street and Constitution Avenue NW

Washington, DC 20551

Docket No. R-1616

Robert E. Feldman, Executive Secretary

Attention: Comments/Legal ESS

Federal Deposit Insurance Corporation

550 17th Street NW

Washington, DC 20429

FDIC RIN 3064-AE77

Transmitted via the Federal eRulemaking Portal

To Whom It May Concern:

SIFMA1 is pleased to comment on the recent interim final rule on “Liquidity Coverage Ratio: Treatment of Certain Municipal Obligations as High-Quality Liquid Assets” (the “Rule”) published by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (together the “Agencies”).

SIFMA believes the Rule represents a sound regulatory implementation of Section 403 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (PL 115-174, the “Act”). Section 403 of the Act requires the Agencies to amend their Liquidity Coverage Ratio rules to provide Level 2B High Quality Liquid Asset (“HQLA”) treatment for municipal securities that are investment grade and liquid and readily marketable. The Rule effectively carries out this provision without applying any restrictions on municipal securities as HQLA that do not also apply to other Level 2B HQLA. We believe the Rule is consistent with congressional intent and effectively implements the new statute. SIFMA fully supports the interim final Rule and we thank the principals and staff of the Agencies for their work on this issue.

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