AIMA

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.

Key legislative documents

FDIC Final Rule - Certain Orderly Liquidation Authority Provisions under Title II of Dodd-Frank Wall Street Reform and Consumer Protection Act (July 2012)

Dodd-Frank Wall Street Reform and Consumer Protection Act 2010

Relevant consultations

FDIC Notice of Proposed Rulemaking - Orderly Liquidation Authority (March 2011)

FDIC consultation on Proposed Rulemaking Implementing Certain Orderly Liquidation Authority Provisions (October 2010)

AIMA documents

Response to FDIC consultation on Proposed Rulemaking Implementing Certain Orderly Liquidation Authority Provisions (January 2011)