June 4, 2020

Via electronic mail

Ann E. Misback, Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue NW
Washington, DC 20551

Executive Secretary, Attention: Comments
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, DC 20429

Re: Guidance for Resolution Plan Submissions of Certain Foreign-Based Covered Companies (FRB Docket No. OP-1699; FDIC RIN 3064-ZA15)

Ladies and Gentlemen,

The Securities Industry and Financial Markets Association (SIFMA)1 appreciates the opportunity to respond to the request from the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (“the Agencies”) for feedback on proposed guidance for the 2021 and subsequent resolution plan submissions by certain foreign banking organizations (“Specified FBOs”).2 We have joined with the Bank Policy Institute and the American Bankers Association in a more detailed comment letter, and we agree with all of the comments in that letter. In this letter, however, we want to underscore the likely negative impact of this proposal on the U.S. capital markets.

Recommendations:
We respectfully request that the Agencies not adopt the approach in the Proposed Guidance and instead change the scoping methodology, eliminate the extraterritorial expectations, and show heightened consideration for the fundamental differences that make resolving an intermediate holding company (“IHC”) of an FBO with a broker dealer as its material legal entity in the U.S. (“MLE”) less systemically risky than resolving a bank.

In the joint trade associations letter, we recommend several ways to accomplish these goals, namely: (a) conduct a holistic review of the prudential regulations applicable to the U.S. operations of the FBOs; (b) engage in bilateral discussions with the impacted FBOs to consider alternative approaches; and (c) give greater consideration to the substantial home country resolution planning requirements applicable to the impacted FBOs, including plans for the resolution of the firms’ U.S. operations which are material to these firms, and therefore to the home country’s resolution plans.