End-users who conclude a bilateral amendment agreement shall individually modify their covered QFC with each of their counterparties for the covered undertakings, in accordance with the requirements of the final rules. This allows the end-user to be more flexible in meeting compliance, but it is much more management-intensive, as it is necessary to negotiate and conclude individual modification agreements with each of its counterparties in the covered entity. The QFC Rules include the definition of QFC in the Dodd-Frank Act, which includes all securities contracts, securities contracts, futures, repurchase agreements, exchange agreements and other similar agreements that may be considered by U.S. supervisors to fall within the definition of QFC. The definition of QFC also includes security agreements and credit enhancements, such as.B. Credit support commitments, guarantees or repayment obligations that relate to contracts corresponding to the definition of QFC. The Dodd-Frank Wall Street Reform and Consumer Protection Act1, commonly known as the „Dodd-Frank”, broadly defines a QFC. The definition includes all securities contracts, commodity contracts, futures, repurchase agreements, swap agreements and all similar agreements that the Federal Deposit Insurance Corporation (FDIC) establishes as eligible financial contracts by regulation, regulation or injunction.2 As a general rule, framework agreements (as adopted by the International Exchange and Settlement Association (ISDA) relating to QFCs are themselves QFCs. The QFCs that are subject to the QFC residence rules discussed below are those that contain certain provisions that have been or may be deemed unfavourable by U.S. banking supervisors to the orderly resolution of an IMCS. They are called „QFC in-scope” and are the driving force behind the sending of the notification by your financial institution. Title II (but not the FDIA) also requires the suspension of counterparties` performance of „cross-default” remedies under QFCs triggered by the initiation of a mandatory Title II administration for a consolidated related entity (an „insolvent related entity”) of the „direct” GSIB counterparty, including insolvent affiliates that „enhance” such counterparties (mainly collateral and guarantees) and 1999, 1994, 1998, 1998, 1999 Had such a provision been in effect during the 2008 financial crisis, the insolvency application of Lehman Brothers Holdings Inc.
(„LBHI”) would not have resulted in cross-defaults among the QFCs of their trading subsidiaries, many of which were found to be solvent. Title II also authorizes the transfer of „credit improvements” from an insolvent affiliate to a resolution transfer. If such a provision had been in effect during the 2008 financial crisis and if LBHI`s assets had been transferred to a draw-down, the lehman subsidiaries would have been subsidiaries of the resolution beneficiary and the borrower would have assumed the related liabilities in the context of credit improvements previously provided by LBHI. Compliance with QFC rules can also be achieved through negotiated bilateral agreements. The parties may use bilateral amendments in cases where, for example, they wish to opt only for the United States special resolution regime, but do not wish to opt for the other regimes identified. The bilateral amendments would also allow a party to choose certain GSIBs and QFCs for which it wishes to make the necessary changes. . . .