On December 11, 2017, the US Federal Reserve Board announced that it is seeking comments regarding a proposed change to its Payment System Risk Policy. In a related action, the Federal Reserve Board has also announced that it is eliminating the strength of support assessment (SOSA) ranking used for FBOs because the information that informs such rankings (such as information on parent banks, home country accounting practices and financial systems, and international regulatory developments) has become more readily available to US supervisors. The proposed changes to the PSR Policy would affect US branches and agencies of foreign banking organizations, and result in changes to the methods used in determining the net debit cap of an FBO and its ability to request a streamlined procedure with regard to the FBO's maximum daylight overdraft capacity. The calculation method currently takes into account whether the FBO is a financial holding company, as well as the FBO's SOSA ranking. The Federal Reserve Board notes that the changes to the PSR Policy may result in a reduction of the net debit cap for some FBOs, but contends that the changes will not constrain the US operations of FBOs generally, while more accurately reflecting the usage of intraday credit by FBOs. Comments to the proposal are due on or before February 12, 2018.
The Federal Reserve Board's PSR Policy proposal is available at: https://www.gpo.gov/fdsys/pkg/FR-2017-12-14/pdf/2017-26923.pdf and the Federal Reserve Board's SR Letter regarding SOSA is available at: https://www.federalreserve.gov/supervisionreg/srletters/sr1713.htm .
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