FDIC Proposes Derivatives Recordkeeping Rule For Troubled Institutions

On July 28, 2008, the Federal Deposit Insurance Corporation ("FDIC") published for comment a proposed rule that would require certain troubled depository institutions to maintain records of their qualified financial contracts ("QFCs") in order to provide the FDIC with basic information when the agency is appointed as receiver. 73 Fed. Reg. 43635. Comments on the proposed rule must be received by the FDIC by September 26, 2008.

QFCs include securities contracts, commodity contracts, forward contracts, repurchase agreements, swap agreements and other agreements that the FDIC so defines by regulation or order. Balancing the needs of the capital markets and of the FDIC as receiver, the Federal Deposit Insurance Act gives the FDIC only until 5 p.m. (Eastern Time) on the business day following the date on which it is appointed as receiver to retain, transfer or as a practical matter repudiate a failed