§5463 Designation of Systemic Importance

Summary

The Council must decide, by a vote of at least two-thirds of its members then serving and with a yes from the Chairperson, which financial market utilities or payment, clearing, or settlement activities are or could become systemically important. When making that choice, the Council must consider the total dollar value moved, how much exposure parties have to each other, how the utility or activity is linked to others, what would happen to markets or firms if it failed or was disrupted, and any other factors the Council finds relevant. The Council must talk with the relevant Supervisory Agency and the Board of Governors before deciding. Before naming or removing a designation, the Council must give advance notice by publishing it in the Federal Register and let the affected utility or financial institutions ask for a hearing within 30 days. If a hearing is requested, the Council must set a time and place within 30 days (unless extended) and send a written final decision within 60 days after the hearing with the facts behind the choice. If no hearing is asked for, the Council must send a written final decision within 30 days after the deadline to request a hearing. The Council can remove a designation with the same voting rule, which ends the entity’s coverage under these rules. In an emergency, the Council can skip or change notice and hearing steps by the same two-thirds-plus-Chair vote, then notify affected parties within 24 hours for a utility and within 3 business days for financial institutions, posting the notice on its website and in the Federal Register. The Council may extend these time limits if needed.