Regulatory Alerts2020-08-31 | 2020-16468Covered Broker-Dealer Provisions Under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act
The Federal Deposit Insurance Corporation and the Securities and Exchange Commission jointly adopted a final rule to implement orderly liquidation procedures for covered broker-dealers under Title II of the Dodd-Frank Act. The regulation clarifies how Securities Investor Protection Act provisions apply, establishes the FDIC’s authority to create bridge broker-dealers and transfer assets, and defines customer claim satisfaction alongside Securities Investor Protection Corporation trustee responsibilities. By governing qualified financial contracts exclusively under Title II and preserving customer status comparable to traditional proceedings, the rule ensures prompt asset allocation while mitigating systemic risk during financial company failures.