12 USC 5466 - Examination of and enforcement actions against designated financial market utilities

U.S Code last checked for updates: Nov 22, 2024

§ 5466.

Examination of and enforcement actions against designated financial market utilities

(a)

Examination

Notwithstanding any other provision of law and subject to subsection (d), the Supervisory Agency shall conduct examinations of a designated financial market utility at least once annually in order to determine the following:

(1)

The nature of the operations of, and the risks borne by, the designated financial market utility.

(2)

The financial and operational risks presented by the designated financial market utility to financial institutions, critical markets, or the broader financial system.

(3)

The resources and capabilities of the designated financial market utility to monitor and control such risks.

(4)

The safety and soundness of the designated financial market utility.

(5)

The designated financial market utility’s compliance with—

(A)

this subchapter; and

(B)

the rules and orders prescribed under this subchapter.

(b)

Service providers

(c)

Enforcement

(d)

Board of Governors involvement in examinations

(1)

Board of Governors consultation on examination planning

(2)

Board of Governors participation in examination

(e)

Board of Governors enforcement recommendations

(1)

Recommendation

(2)

Consideration

(3)

Binding arbitration

(4)

Enforcement action

Upon an affirmative vote by a majority of the Council in favor of the Board of Governors’ recommendation under paragraph (3), the Council may require the Supervisory Agency to—

(A)

exercise the enforcement authority referenced in subsection (c); and

(B)

take enforcement action against the designated financial market utility.

(f)

Emergency enforcement actions by the Board of Governors

(1)

Imminent risk of substantial harm

The Board of Governors may, after consulting with the Supervisory Agency and upon an affirmative vote by a majority the Council, take enforcement action against a designated financial market utility if the Board of Governors has reasonable cause to conclude that—

(A)

either—

(i)

an action engaged in, or contemplated by, a designated financial market utility (including any change proposed by the designated financial market utility to its rules, procedures, or operations that would otherwise be subject to section 5465(e) of this title) poses an imminent risk of substantial harm to financial institutions, critical markets, or the broader financial system of the United States; or

(ii)

the condition of a designated financial market utility poses an imminent risk of substantial harm to financial institutions, critical markets, or the broader financial system; and

(B)

the imminent risk of substantial harm precludes the Board of Governors’ use of the procedures in subsection (e).

(2)

Enforcement authority

(Pub. L. 111–203, title VIII, § 807, July 21, 2010, 124 Stat. 1814.)

cite as: 12 USC 5466