Effective Date Set for FRB Expansion of "Netting" Protection Eligibility for Financial Institutions
A Federal Reserve Board final rule that expands the number of financial institutions that fall under the "netting" provisions of the Federal Deposit Insurance Corporation Improvement Act of 1991 was published in the Federal Register. As previously coverage, these provisions ensure that parties to a netting contract (i.e., an agreement to pay or receive the net, rather than gross payment) will have a claim for the netted contract amount even in the event of insolvency.
The final rule goes into effect on March 29, 2021.
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