OCC finalizes CIF withdrawal period extensions
On May 21, the OCC issued an interim final rule, which finalizes a rule applicable to national banks and federal savings associations administering a collective investment fund (CIF) invested primarily in real estate or other assets that are not readily marketable. Specifically, under the OCC’s fiduciary activities regulation (12 CFR 9.18), a bank that is administering a CIF invested “primarily in real estate or other assets that are not readily marketable” may require a prior notice period of up to one year for withdrawals. As previously covered by Infobytes, in August 2020, the OCC issued an interim final rule which clarified rules regarding account withdrawals from CIFs in response to the Covid-19 pandemic. The recently released interim final rule codifies the August rule by allowing banks to request to extend the one-year redemption period by another year due to “unanticipated and severe market conditions for specific assets held by the fund,” subject to meeting certain conditions.
The interim final rule will be effective upon publication in the Federal Register.