Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, DC 20551
Attention: Ann E. Misback, Secretary
Docket No. R-1658; RIN 7100-AF45; and
Docket No. R-1628; RIN 7100-AF21

Office of the Comptroller of the Currency
400 7th Street, SW, Suite 3E-218
Washington, DC 20219
Attention: Legislative and Regulatory Activities Division
Docket ID OCC-2018-0037; RIN 1557-AE56

Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Attention: Robert E. Feldman, Executive Secretary
RIN 3064-AE96

Re:       SIFMA Comment on Liquidity Standards for Large Banking Organizations

Dear Sirs and Madams:

The Securities Industry and Financial Markets Association (“SIFMA”) appreciates the opportunity to comment on the following proposals by the federal banking agencies (the “Agencies”) related to liquidity standards for large banking organizations:

• the proposed rule of the Board of Governors of the Federal Reserve System (the “Board”) to revise the enhanced prudential standards rule (the “EPS Rule”) (the “Board Proposal”);and
• the Agencies’ proposed rule to revise interagency liquidity and capital requirements (the “Interagency Proposal,” and together with the Board Proposal, the “Proposals”).

SIFMA has separately submitted comments to the Agencies related to the impact of the Proposals on foreign banking organizations (“FBOs”).  The purpose of this comment letter is to respond to questions in the Board Proposal related to potential changes in liquidity standards for large banking organizations and to highlight related liquidity management issues raised by the Proposals, including with respect to the U.S. Liquidity Coverage Ratio (“U.S. LCR”).

Our comments in this letter are organized into three sections:

• Section 1 responds to questions raised in the Board Proposal and supports greater alignment between High Quality Liquid Asset (“HQLA”) standards in the U.S. LCR and Highly Liquid Asset (“HLA”) standards in the EPS Rule;
• Section 2 responds to a statement in the preamble of the Interagency Proposal suggesting that the Agencies expect HQLA to be “continually available,” and explains why, if the Agencies consider applying an intraday utilization requirement to HQLA, the Administrative Procedure Act (“APA”) requires them to do so through a notice-and-comment rulemaking; and
• Section 3 provides constructive recommendations, based on nearly five years of operating experience with the U.S. LCR, for ways to strengthen and tailor the U.S. LCR to better promote liquidity resiliency, and make related changes to the U.S. Net Stable Funding Ratio (“U.S. NSFR”).

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