FDIC Issues Frequently Asked Questions to Provide Additional Guidance Regarding Sweep Account Disclosure Requirements
On July 6, 2009 the FDIC issued a list of Frequently Asked Questions (FAQs) in response to industry questions regarding sweep account disclosure requirements in 12 C.F.R. § 360.8. These FAQs can be found here in FDIC FIL-39-2009. Notably, the FAQs address the requirements for a properly executed repo sweep arrangement, such that the customer has a perfected security interest in the underlying securities upon the event of a bank failure, which is significant, because otherwise the customer’s funds could be treated as uninsured deposits.