occ investment management handbook

611 Industrial Way W. Eatontown, NJ 07724, Partner is your source for understanding the science of real estate.. 957 0 obj 0000005851 00000 n The newsletter explains federal emergency programs that have provided loans, grants, and other resources for low- and moderate-income and minority communities and businesses recovering from the disproportionate effects of the pandemic. 0000001056 00000 n Engineers who understand your business isnt just a motto.

Interagency Statement on Retail Sales of Nondeposit Products n n Adopted in 1994 provides familiar NOT FDIC insured; NOT bank guaranteed; and MAY lose value disclosures. establish strategic direction, risk appetite, and an ethical culture consistent with the banks strategic goals and objectives for its funds; establish an appropriate organizational structure for bank CIFs, with clear delineation of authority, responsibility, and accountability through all levels of the organization; develop and implement a comprehensive and effective risk management system; and. endobj Additionally, OCC published the views of the Acting Comptroller Michael J. Hsu on architecture of stablecoins, management of tail risks, and large bank resolvability. 0000004086 00000 n The OCC will look for clear documentation, processes, and policies that demonstrate adherence to guidelines and expectations set out in the CIF Handbook, and national banks that fail to adhere to these standards could face examiner criticism or worse. 958 0 obj This booklet discusses risks and risk management practices associated with commercial real estate.

13, Fiduciary Conflicts Asset Management Divestitures o Post-transaction risk controls: n n o Well documented, disciplined asset selection and monitoring process applied consistently across all advisers and funds used by fiduciary accounts.

A bank must notify OCC after the bank determines that a notification incident has occurred, and OCC must receive this notice as soon as possible and no later than 36 hours after the banks determination. At Partner, good science is only part of the job.

2154 Torrance Blvd.Torrance, CA 90501 East Coast This submittal request is not for hiring inquiries or solicitations and therefore will not be routed. OTS Trust and Asset Management Handbook This handbook is designed to assist examiners in planning and conducting examinations of trust and asset management products and services provided by a savings association to its customers. <> 0000054862 00000 n 987 0 obj The CIF Handbook references and incorporates previous OCC guidance on a variety of matters, including third-party investment advisory and other outsourcing arrangements. The OCC issues a handbook, which according to the OCC Handbook itself, The Office of the Comptroller of the Currencys (OCC) Comptrollers Handbook booklet, 'Commercial Real Estate Lending,' provides guidance for bank examiners and bankers on Commercial Real Estate (CRE) lending activities., It specifically cites risk, The booklet addresses the risks inherent in CRE lending as well as risks unique to specific lending activities and property types. 0000003911 00000 n Ensure that each asset is valued using an appropriate valuation process 16, Annual Reviews of Fiduciary Accounts o Automated and Manual Investment Review Process n Manual Reviews - limitations o o o Can be time consuming, particularly if there a large number of discretionary accounts with an array of unique assets Risk that reviews will become a rubber stamp or that they will not be completed on a timely basis Quality of reviews may vary depending upon the individual performing the review 17, Annual Reviews of Fiduciary Accounts o Automated and Manual Investment Review Process n Automated Reviews - limitations o o Wholly automated screening process may not provide independent perspective customarily provided by an effective committee review process Automated systems may not address whether an account's investment objectives have - or need to be - changed over time If account administrators are not included in the automated process, key information (account objectives, cash needs, grantor intent, and beneficiary requests) may not be considered Vendor systems may only identify exceptions limited to a number of pre-set parameters 18, Annual Reviews of Fiduciary Accounts o OCC Expectations n n n Timely and comprehensive annual investment reviews may be performed using either a manual, automated, or combination approach An effective program will be based upon policies and procedures that provide clear standards for the scope, documentation, and exception reporting and tracking Individual assets, as well as the account as a whole, must be reviewed. Asset values for assets that are difficult to price should be obtained from an unaffiliated provider when possible. The French Prudential Control and Resolution Authority (ACPR) finalized Version 1.1.0 of the RUBA taxonomy, issued a statement of compliance with the resolvability guidelines of the European Banking Authority (EBA), Already subscribed? [1] The CIF Handbook revises the 2005 version and provides detailed guidance on the expectations of the OCC regarding the offering and administration of collective investment funds (CIFs)including common trust funds for fiduciary assets, employee benefit plan collective funds, and other pooled investment funds operated under the OCCs fiduciary activities regulationsby national banks and federal savings associations. Enhanced the bonds rating and lowered the cost of debt to the issuers. 955 0 obj Its an integral part of our business practice. They are funded via asset backed commercial paper and medium term notes as well as equity (capital notes). 0000003807 00000 n endobj 12, Fiduciary Conflicts Asset Management Divestitures o Risk Management Guidance n Pre-transaction Risk Controls: o Independent legal opinion that focuses on appropriateness of proposed transaction and effective implementation of any recommended actions o Focus on ERISA issues for ERISA accounts o Affirmative consents where required by applicable law, after timely and meaningful notice o Independent fiduciary to vote proxies for discretionary holdings of affected mutual fund shares. <> xXKoF[ MX8@6CLr(._z(rgwy|;qe6. OCC Investment Management Services Booklet This booklet contains an overview of the investment management business, its associated risks, and an appropriate risk management framework. We look forward to answering your questions and helping you on your next project. Includes all national and state-chartered commercial banks and national trust banks. 0000003239 00000 n 292 0 obj <>/Filter/FlateDecode/ID[<1E09BAE7DE3B240216ED6C723580C011><778EFE02D3A25F41938C8795E5982862>]/Index[284 131]/Info 283 0 R/Length 73/Prev 175427/Root 285 0 R/Size 415/Type/XRef/W[1 2 1]>>stream 30, Monoline Insurance Issues o o o Monoline insurers such as MBIA, AMBAC, and FGIC initially provided insurance to muni bonds. Sign up for the latest industry news, thought leadership, and Partner happenings. 6(c) n OCC Bulletin (March 2008) o o o Expectations Automated vs. Manual Reviews Unique Assets 10, Fiduciary Conflicts Asset Management Divestitures o o o Reinforces existing OCC guidance that a conflict exists when a fiduciary receives an incentive to place or retain customer assets in a specific fund. 0000001801 00000 n The OCC is particularly concerned with the risks presented by the nature of collateral accepted by the bank in exchange for the lent security. Losses on sub-prime led to downgrades and threatened downgrades of major monolines companies. PKlPx g |h Trust Examination Rating System Read the letter that announced the current Trust Examination Rating System. trailer o Inability to roll ABCP, and drop in prices at which assets could be liquidated, quickly tripped NAV triggers, forcing many SIVs into limited operating states or enforcement status. 0000003859 00000 n o Credit Support o Reputation Risk vs. purchasing assets Reputation, liquidity, credit and compliance risks may increase due to these BC activities. Interagency effort underway to consider what revisions, if any, should now be made to the Interagency Statement. 0000001993 00000 n <> 0000006468 00000 n 961 0 obj In 2009, OCC examiners will focus on bank compliance with the recordkeeping rule. OCC Publishes Multiple Updates for Financial Sector Entities. Fund support should come from the holding company, not the FDIC -insured bank.

Noncompete clauses or penalties for declines in AUM levels. <> endobj All rights reserved. endobj Purchaser payment of transaction costs -contingent on maintenance of specific AUM level. o SIVs are sponsored by banks such as Citi, HSBC, Societe Generale, as well as non-banks. %PDF-1.3 % h1 01\{eA'M-j~~|O dm The OCC expects banks offering and managing a CIF to determine the appropriateness of fund investments and to have a well-defined process for evaluating the potential performance of the proposed fund portfolios to ensure they follow the funds documented risk limits. o NAVs, which averaged 102% in June 07, declined to 55% in December 07, signaling a decrease in the ability of capital note holders to cushion senior note holders from loss. 951 0 obj [1]. What is banks stake in these sales? The OCC notes that a manager of a CIF must balance ensuring adequate liquidity to meet customer redemption needs with the need to ensure that the fund meet its benchmarks and provides a competitive return. 952 0 obj 953 0 obj The updated booklet reflects changes made to laws and regulations since this booklet was last updated, reflects OCC issuances published and rescinded since this booklet was last updated, and revises certain content for general clarity. 0 [342 0 0 0 0 0 862 0 543 543 0 0 361 480 361 689 0 711 711 711 711 711 711 0 0 711 402 0 0 0 0 0 0 776 762 724 830 683 650 811 837 546 0 771 637 948 847 850 733 0 782 710 682 812 764 1128 0 737 0 0 0 0 0 0 0 668 699 588 699 664 422 699 712 342 0 671 342 1058 712 687 699 699 497 593 456 712 650 980 669 651] 35. 0000006010 00000 n 19, UITRS o o Adopted interagency in 1998 OCC believes n o Disclosure of the five component ratings is not critical to effectively supervise a banks trust operations OCCs supervision by risk approach means we identify significant risks and aggregate them in a composite rating, rather than focus on individual component ratings 20, UITRS o OCC will: n n Rely upon risk-based supervision Continue to rate each component, but examiner disclosure of each component rating is optional Disclose composite ratings Revise UITRS policy in the forthcoming Community Bank Supervision Handbook 21, National Trust Banks o NTB Capital & Liquidity Guidance (OCC Bulletin 2007 -21) n n n NTBs need a system to analyze and maintain adequate capital and liquidity.

2 billion reported in 2006. Training will be provided to OCC examiners. Similarly, the OCC devotes materially more attention to the issue of third-party service provider retention and oversight and sets forth, in considerable detail, its expectations and requirements for bank managers. 9.18(b) (CIF Regulations). 0000007328 00000 n n Overlapping rules and regulations o o n Interagency Statement Regulation R (Networking) and GLBA OCC Regulation 14 (Insurance Sales) NASD (FINRA) Rule 2350 How should these bank and broker/dealer requirements mesh? endobj Capital and liquidity are not interchangeable. All banks, including NTBs, need contingent sources of liquidity. The International Organization of Securities Commissions (IOSCO) and the Committee on Payments and Market Infrastructures (CPMI) published a report to assess the implementation the Principles for Financial Market Infrastructures (PFMI) in Turkey. OCC Bulletin 2004 -2: Banks/Thrifts Providing Financial Support to Funds Advised by the Banking Organization or its Affiliates: Interagency Guidance. BCs may manage Mutual Funds and other Asset Management portfolios which have invested in SIVs. How does bank document its oversight? 960 0 obj Historically, there has been a strong correlation between the rise in the S&P 500 and an increase in fiduciary revenue. 0000055023 00000 n 866.928.7418 fax[emailprotected] email. 732.380.1700phone, General Info n n o How effective is banks oversight of the B/D? FDIC Trust Examination Manual This page provides a link to an online version of the manual, as well as anorder form to request a free copy of the manual on CD-ROM. startxref 866.928.7418 fax[emailprotected]. The statement highlights the importance of progressing ongoing work of the FSB. This booklet also provides examiners with a framework for evaluating commercial real estate lending activities. [2]. 0000071733 00000 n endobj 28, SIVs in Money Market Funds o o Faced with valuation dilemmas, downgrades and/or breaking the buck MMMF and STIF sponsors considered supporting their funds. As of August, 2007, 32 SIVs with assets totaling $400 Billion. 0000000016 00000 n The Danish Financial Supervisory Authority (Danish FSA) designated certain institutions as systemically important financial institutions (SIFIs) in Denmark, the Faroe Islands, and the Greenland. o Develop a strategic initiative to organize and conduct bank securities activities in compliance with the new requirements. Trust o US Bank (First American Funds) o Morgan Stanley o Legg Mason (Western Asset Mgt. <> Contact Us | Privacy Statement Fiduciary Revenue (All Banks) o o Banks reported a combined $31. Bank fiduciaries acting as investment advisors should focus on timely and fair valuation and be mindful of the potential impact of prospective monoline downgrades on the rating of portfolio holdings. The Comptrollers Handbook was updated in August of 2013, and replaces the OCCs Commercial Real Estate and Construction Lending booklet from 1995. 4, Regulation R OCC Action o Reg R jointly issued by SEC and Fed September 2007. o Banking Agencies to adopt a recordkeeping rule that covers compliance with Title II of GLBA and Reg R Expect final rule to be issued late summer 2008. o OCC will update policy guidance and examination procedures to reflect the changes. hbbd``b`@`$[&$^2012)a`A0';JGq.x@ Effective May 01, 2022, banks must use the designated points of contact to satisfy the incident notification requirements established in the interagency final rule for banks and their bank service providers dated November 23, 2021. In a letter to the G20 Leaders, ahead of the July 2022 meeting, the Financial Stability Board (FSB) Chair set out an overview of the key work done by FSB. 284 0 obj <> endobj o SIVs are limited-purpose investment companies that purchase higher yielding long term credit assets. 25, Market Disruption Impact on SIVs o Liquidity tested last August when ABCP market froze. Below are key highlights of the recent updates: Keywords:Americas, US, Banking, Covid-19, Credit Risk, Suspicious Activity Report, AML CFT, Comptroller Handbook, Licensing, Large Banks, Commercial Real Estate, Lending, Incident Reporting, Stablecoins, Cyber Risk, Resolution Framework, Basel, Too-big-to-fail, Regulatory Capital, OCC, Skilled market researcher; growth strategist; successful go-to-market campaign developer. Partner is ready to help you with your career. The latest edition of Community Developments Investments highlights how banks can collaborate with community development financial institutions, minority depository institutions, and other community-based groups to help rebuild communities recovering from the COVID-19 pandemic and natural disasters. gov Phone: 202 -874 -4493 Fax: 301 -433 -7903 43, Service improvement plan for service desk, American academy of allergy asthma and immunology 2018, OCC Asset Management Initiatives Joel Miller Asset Management, The Crucible Arthur Miller 1953 Arthur Miller Miller, Sensys Asset Expert Effective Asset Management Asset Expert, Asset Expert Effective Asset Management Software Sensys Asset, Chapter 3 Asset Management Asset management infrastructure management, WILLIAM MARTIN JOEL BILLY JOEL 1949 PRESENT Billy, RTEMS Status and Roadmap Joel Sherrill Joel Sherrilloarcorp, The Book of the Prophet Joel Joel OUTLINE, Draftietfsupagenericpolicydatamodel02 Joel Halpern jmhjoelhalpern com joel halpernericsson com, BEWARE THE LAMB JOEL Joel Outline Chapter 1, Some thoughts on readout Joel Ullom NIST joel, Designed Learning Joel Rosenberg Chapter 28 Summary Joel, SESSION CODE DPR 307 Joel Semeniuk Telerik Joel, Hamvaz szerda Olvasmny Joel knyvbl Joel 2 12. endstream 963 0 obj Also discussed are supervisory expectations and regulatory requirements for prudent risk management.

Funds) o Janus o Toronto-Dominion Bank (TDAM Funds) o Northern Trust 29, Asset Mgt.

Whats the scope? SIV assets now below $300 Billion. It also includes clarifying edits regarding supervisory guidance, sound risk management practices, and legal language. 5. The OCC, however, also continues to focus on recurring regulatory issues, such as CIF admission and withdrawal activities, compliance with bank and securities regulatory requirements for common and collective fund management activities, and participant eligibility requirements, albeit again with a greater degree of detail.

Tax exempt MMMFs have moved away from instruments dependent upon monoline ratings - result has been significant drop in yields. Various Parks for Monmouth County Park System, Georgian Court University Athletic Fields, Vapor Intrusion / Vapor Encroachment Assessments, Foreclosure Environmental Site Assessment, Limited Environmental Due Diligence Products, Pre-lease Phase I Environmental Site Assessment report, NJ Licensed Site Remediation Professional, Alternative Financing for Energy Projects, Energy Infrastructure Project Development, Owner's Representation for Energy Projects, Utility and Government Program Management, Streetscapes and Urban Landscape Architecture, Construction Staking and Site Layout Surveys, Lead Paint Inspection and Risk Assessment, Workers Compensation Cost Control Programs, Hazard Communication / Right to Know Compliance, New Jersey Community Right to Know Services, New Jersey Right to Know Public School Services, OCC Handbook/ Commercial Real Estate Booklet, Investment Risk Assessments, Royal Bank Plaza - Canada, Independent Engineering for Floating Solar PV - Healdsburg, CA, Facility Condition Assessments, Construction Risk Management - Florida, Hazardous Materials Assessment, Multifamily - Sacramento, CA, Nationwide Multi-Disciplinary Services for Carvana Portfolio, Bundled Due Diligence, Panera Bread 26 States. 0000071206 00000 n 414 0 obj <>stream 0000072340 00000 n %PDF-1.7 % OCC Asset Management Initiatives Joel Miller Asset Management Group Leader Office of the Comptroller of the Currency April 9, 2008 1, OCC AM Initiatives o o o Regulation R implementation Interagency Statement on Nondeposit Investment Products Asset Divestiture issues Reg 9 Annual Reviews UITRS modifications Fee Transparency issues 2, Asset Management Issues in 08 o Market Disruption - significant impact on AM activities and valuations (in addition to capital markets and credit) n n n Structured Investment Vehicles Money Market and Collective Fund Breaking the Buck issues Monoline Insurance Companies impact on municipal securities 3, AM Initiatives o Regulation R n n Jointly issued by SEC and Fed Banking agencies are finalizing a recordkeeping rule that will detail what records banks must retain to demonstrate compliance with GLBA and Reg R to qualify for exemptions from registration as a broker. The OCC identifies the primary risks associated with offering and managing CIFs as compliance, operational, strategic, and reputation. The CIF Handbook is also important for state banks and trust companies that engage in CIF activities. 732.380.1700 phone, General Info endobj <>stream West Coast Expect final rule to be issued by the Federal banking agencies in late Summer 2008. . The revised licensing booklets reflect recent updates to 12 CFR 5 and other regulations, remove references to outdated guidance and provide current reference, and make other minor modifications and corrections. The update to the Comptrollers Handbook highlights the Office of the Comptroller of the Currencys enhanced expectations regarding the overall risk management of collective investment fund activity and provides insight into areas of current regulatory concern. Bottom line act like a fiduciary! The OCC notes that bank CIF sponsors experienced losses during the 2008 financial crisis because of illiquid collateral. 0000054251 00000 n o AAA rated money market funds holding SIV ABCP in enforcement status risked downgrades. monitor the implementation of investment management risk strategies and the adequacy and effectiveness of risk management processes for the banks CIFs. Bank regulators exam scope is limited by GLBA. o Note, the stakes are highif not in compliance, bank could be operating as an unregistered securities broker in 6 violation of securities laws. n o Whos selling what to the banks customers?

o Investors were spooked by the market, and by a lack of transparency in SIVs were tainted by perception of even small exposure to sub-prime mortgage. OCC Custody Services Booklet This booklet addresses the fundamentals of securities custody and related services, and provides guidance for examining those activities in national banks. The final rule takes effect on May 01, 2022. 27, SIVs and Asset Management o Most SIVs were initially highly rated instruments offering enhanced yields that may have been permissible/prudent investments for: n n n Money market mutual funds Short-term collective investment funds Enhanced cash funds Other pooled funds; securities lending cash collateral pools Other fiduciary accounts o Market disruption has led to increased focus on valuation of assets for which there is little or no current marketability. Thank you! At the same time, the new CIF Handbook is materially more detailed as to the nature of and the risks presented by CIF activities as well as the policies and processes a bank is expected to have in place to manage these risks. OCC Collective Investment Funds Booklet This booklet provides guidance to examiners evaluating the risks of managing collective investment funds. 959 0 obj 7, Interagency Statement o Going forward. The newsletter highlights bank-community partnerships that have helped communities rebuild following disasters and the pandemic. . <> Can only look through the bank into the broker/dealer; cannot examine B/D. FIRMA 2016. 0000071453 00000 n 0000071136 00000 n The Office of the Comptroller of the Currency (OCC) oversees a system of national banks and federal savings associations involved in Commercial Real Estate and Construction Lending, assuring that these institutions are safe, sound, competitive, and capable of providing for the banking needs of customers as best as possible. The level of custody assets has increased by $22 trillion or 61% during the same time period. Some of the specific topics addressed in the CIF Handbook, including CIF liquidity management, conflicts of interest, valuations, and securities lending activities, reflect some of the problems that bank CIFs encountered during the financial crisis, and it is not surprising that the OCC would choose to address, in some detail, these issues. The European Central Bank (ECB) published results of the climate risk stress test, for 2022, among the significant institutions. endobj 0000001602 00000 n [2] The OCC emphasizes that banks may not rent their charters to third parties that wish to engage in offering CIFs and that there must be clear disclosures that the CIF is offered and managed by the sponsoring bank. The Fiduciary & Investment Risk Management Association, Inc. 0000003001 00000 n Accordingly, the new CIF Handbook represents a natural extension of the OCCs overall supervisory emphasis on national bank risk management activities and, in this respect, contains few major surprises for national bank collective fund managers. 988 0 obj

The Financial Sector Supervisory Commission of Luxembourg (CSSF) decided to maintain the countercyclical capital buffer, CCyB, rate for banks at 0.50%, for the third quarter of 2022. To date, there are published reports of ten fund sponsors which have entered into capital support agreements and/or purchased assets from their funds. o First introduced in 1988. The newer SIVs tend to have non-bank sponsors. endstream endobj startxref Banks may satisfy the notification requirement of the final rule by contacting their supervisory office or by using BankNet and/or BankNet Help Desk to communicate a notification incident. 0000001950 00000 n <<0745A7A705B2B2110A00903C18CEFD7F>]/Prev 291760/XRefStm 1602>> View select projects highlighting Partners services. 0000079818 00000 n Hotel Multi-Scope Pre-Acquisition Due Diligence and Construction Management D.C. ATP Testing, Large National Bank - 150 US sites, Vapor Intrusion / Encroachment Assessment, Large Tract Phase I Environmental Site Assessment, Pre-lease Phase I Environmental Site Assessment, Energy, Sustainability and Resilience Consulting, Environmental Health and Safety EHS and Regulatory Compliance, Construction Inspections and Quality Testing. Some BCs providing liquidity facilities to third party SIVs. OCC policy guidance encourages CIFs to either segregate or purchase defaulted assets. The CIF Handbook revises the examination procedures for CIFs and establishes two broad categories of inquiry for examiners, with detailed guidance regarding questions to ask and materials to request: (1) quantity of risk (i.e., low, moderate, high) and (2) quality of risk management (strong, satisfactory, weak). 0 31, Monoline Insurance Issues o o o Many mutual funds, collective investment funds and fiduciary accounts contain municipal bonds for which the price or rating may be affected by the downgrade or default of their financial guarantor. endobj Its an integral part of our business practice. It also describes the OCC's supervisory philosophy and processes, and how they are applied to the asset management activities of national banks. endobj

Banks Exercising Fiduciary Powers All Banks December 31, 2007 36 Source: Call Report. endobj 37 Source: Call Report RC-T S&P 500 data is the quarter-end 90 -day moving average, OCC Asset Management Handbooks & Guidance q q q q q Retirement Plan Services (December 2007) Collective Investment Funds Asset Management Conflicts of Interest Custody Services Investment Management Services Personal Fiduciary Services Retail Nondeposit Investment Sales Insurance Activities 39, OCC Safety & Soundness Handbooks & Guidance o OCC 2008 -X, Fiduciary Activities of National Banks; Annual Reviews of Fiduciary Accounts Pursuant to 12 CFR 9.

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occ investment management handbook