The Board of Governors of the Federal Reserve System has issued an SR letter clarifying expectations regarding confidentiality provisions in agreements between a banking organization and its counterparties (for example, mutual funds, hedge funds and other trading counterparties) or other third parties.

It is contrary to Federal Reserve regulation and policy for agreements to contain confidentiality provisions that:

• restrict the banking organization from providing information to Federal Reserve supervisory staff;
  
  
• require or permit, without the prior approval of the Federal Reserve, the banking organization to disclose to a counterparty that any information will be or was provided to Federal Reserve supervisory staff; and
  
  
• require or permit, without the prior approval of the Federal Reserve, the banking organization to inform a counterparty of a current or upcoming Federal Reserve examination or any nonpublic Federal Reserve supervisory initiative or action.

See SR Letter for full details.

SR Letter 07-19

Contact:
Public Affairs
(212) 720-6130
general.info@ny.frb.org