OCC, under new interim final rule, lets banks temporarily extend short-term investment fund maturities

Maturity limits for short-term investment funds (STIFs) were extended Sunday under an interim final rule responding to the market effects of the coronavirus (COVID-19), the Office of the Comptroller of the Currency (OCC) announced.

The OCC on Sunday approved an interim final rule facilitating these changes for banks acting in a fiduciary capacity. The interim rule is out for a 45-day comment period but is in effect now and applicable as of March 20, 2020 (last Friday).

In keeping with the interim final rule, the OCC has ordered that a bank will be deemed in compliance with the rule if:

  • the STIF maintains a dollar-weighted average portfolio maturity of 120 days or less;
  • the STIF maintains a dollar-weighted average portfolio life maturity of 180 days or less;
  • the bank determines that using these temporary limits would be in the best interests of the STIF under applicable law;
  • the bank makes any necessary amendments to the written plan for the STIF to reflect these temporary changes.

The OCC also determined that the relief provided by this administrative order terminates on July 20, 2020, unless the OCC revises this order to provide otherwise before that date.

Order of extension of maturity limits for STIFs (slated for March 25 publication in the Federal Register)

Interim final rule and request for comments (slated for March 25 publication in the Federal Register)

OCC Revises Short-Term Investment Fund Rule (announcement)

OCC Bulletin 2020-22 (summarizes temporary maturity limit extensions)