A „qualified financial contract“ (QFC) has the same meaning as in the Dodd-Frank Act and would include, among others, derivatives, deposits, securities lending and lending transactions, commodity contracts, and futures contracts.19 This definition would also include framework contracts applicable to QFCs (for example. B an ISDA framework contract). However, if, according to the rules of the Federal Final Reserve and the OCC Final Rules20, a framework contract with a foreign GSIB allows transactions to be entered into in one or more U.S. branches or agencies of foreign GSIBs, the framework contract is subject only to these rules for QFCs reserved with a U.S. institution or a U.S. agency of the foreign GSIB (i.e. reserved in the case of a covered entity). By requiring the inclusion of these provisions in the terms of these coverage QFCs, the final rules would help a court in a foreign jurisdiction enforce the effect of those provisions, whether the court had otherwise decided to apply the legal provisions of the United States itself. As a result, the contractual provisions effectively export the U.S.
regulatory system to the foreign jurisdiction in order to achieve a consistent regulatory outcome. Prevent counterparties from using direct default rights against covered companies subject to settlement under the Federal Deposit Insurance Act (FDIA) or Title II of the Dodd-Frank Act, as administered by the Orderly Liquidation Authority (which regulates certain systemically important financial institutions) (collectively referred to as the U.S. Special Settlement Regime) and managed by the U.S. Special Settlement Regime Conditions permitted to delegate Q FC to a company engaged in a settlement procedure under these rules. In order to allow sufficient time for the FDIC to make such a transfer, the QFC counterparties of the bankrupt company temporarily maintain that they have rights of termination, set-off and liquidation of guarantees, solely because of the company`s entry into the resolution proceedings, due to its insolvency or financial situation. However, we find that while Title II of the Dodd-Frank Act maintains direct rights by default and cross default, the FDIA remains only direct rights by default. Limiting the use of cross default rights against covered entities subject to liquidation under a U.S. or non-U.S. insolvency regime, including bankruptcy law and FDIA24 The final rules also contain authorized creditor protection rights that allow creditors to exercise certain cross-default rights outside of an ordered resolution of a covered entity and therefore did not expect them to undermine such a resolution.
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