On December 19, 2016, the US Federal Reserve Board approved a final rule requiring large (generally defined as consolidated assets of $50 billion or more) depository institution holding companies, and certain nonbank financial companies supervised by the Federal Reserve, to publicly disclose their liquidity coverage ratio. The final rule requires these covered financial institutions to publicly disclose quantitative and qualitative information regarding their liquidity coverage ratio calculation on a quarterly basis. The disclosures must be made in a direct and prominent manner on the company's public internet site or in a public financial or other public regulatory report and must remain available for five years. The Federal Reserve stated that requiring institutions to report their medium-term liquidity position would provide "a better indication of the overall strengths and weaknesses of a company's liquidity position" rather than an examination of short-term swings in a company's liquidity position. The final rule is similar to the rule proposed in November 2015; however, the rule as adopted extends the implementation timeline of the public disclosure requirements by nine months. Under the new rule, covered companies, which include those that have $700 billion or more in total consolidated assets or those that have $10 trillion or more in assets under custody, will need to start complying with the public disclosure requirements beginning on April 1, 2017. Other covered companies will be required to comply with the public disclosure requirements beginning on April 1, 2018.
The text of the final rule is available at: https://www.federalreserve.gov/newsevents/press/bcreg/bcreg20161219a1.pdf.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
