Alternative Investment Management Association Representing the global hedge fund industry
Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010 introduces a new Orderly Liquidation Authority (OLA) regime, which will be operated by the Federal Deposit Insurance Corporation (FDIC).
The OLA regime comprises a new set of insolvency rules that will apply to certain financial institutions whose failure may impact the financial stability of the United States. The purpose of the OLA is specifically as a last resort to: (a) supplement the provisions of the US Bankruptcy Code by providing a targeted and controlled mechanism for the resolution of systemically significant financial institutions (SSFIs) when the liquidation cannot be appropriately handled under another applicable law; and (b) ensure risks of failure are borne by shareholders, creditors and other counterparties; and (c) prevent any recourse to taxpayer funding though government bail-outs.
Final Rules were approved by the FDIC on 6 July 2011.