October 12, 2012

Supervisory and Company-Run Stress Test Requirements for Covered Companies; Final Rule (FRB - Fed. Reg. Version)

The Dodd-Frank Act requires the Federal Reserve Board to conduct annual stress tests of bank holding companies with total consolidated assets of $50 billion or more and nonbank financial companies that the Financial Stability Oversight Council (Council) designates for supervision by the Board (nonbank covered companies, and together, with bank holding companies with total consolidated assets of $50 billion or more, covered companies) and also requires the Board to issue regulations that require covered companies to conduct stress tests semi-annually. The Board is adopting this final rule to implement the stress test requirements for covered companies established in the Dodd-Frank Act. This final rule does not apply to any banking organization with total consolidated assets of less than $50 billion.

Implementation of the stress testing requirements for bank holding companies that did not participate in the Supervisory Capital Assessment Program ("SCAP") is delayed until September 2013, while bank holding companies that participated in the SCAP will be required to comply with the stress test requirements on the cycle beginning November 15, 2012. Additionally, a U.S.-domiciled bank holding company subsidiary of a foreign banking organization that is currently relying on SR Letter 01-01 issued by the Board is not required to comply with the final rule's requirements until July 21, 2015.

Effective Date: November 15, 2012.

View rule release here: 77 FR 62377.

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