Re: OCC Interim Final Rule and Request for Comment, Collective Investment Funds: Prior Notice Period for Withdrawals; Docket ID OCC-2020-0031; 85 FR 49229 (August 13, 2020).
Chief Counsel's Office
Office of the Comptroller of the Currency
400 7th Street SW, Suite 3E-218
Washington, DC 20219
Dear Ladies and Gentlemen:
The American Bankers Association (ABA) appreciates this opportunity to comment on the Office of the Comptroller of the Currency's (OCC) interim final rule (IFR) amending the rules governing prior notice periods for withdrawals from collective investment funds that are primarily invested in real estate or other assets that are not readily marketable. The OCC issued the Release to "[clarify] the standard withdrawal period and [establish] a limited exception to that withdrawal period" when a bank is unable to satisfy redemption requests during "ongoing severe market conditions."
On behalf of ABA members that sponsor and maintain collective investment funds invested primarily in real estate and other assets not readily marketable, we appreciate the OCC's effort to codify a modified version of the guidance provided in Interpretive Letter 1121. Our letter raises concerns about some of the new concepts introduced in the IFR and offers suggested changes to facilitate the ability of banks to manage these funds in the best interest of their fiduciary clients.
The IFR amends the existing regulation in 9.18(b)(5)(iii) on prior notice periods for withdrawals from 9.18(a)(2) funds that are primarily invested in real estate or other assets that are not readily marketable. The standard withdrawal period for these funds is one year. In 2009, the OCC issued Interpretive Letter 1121 outlining the following conditions in order to extend, beyond the standard period, the period for acting upon requests to withdraw from a fund:
Under the IFR, the OCC modified the Letter's approach by narrowing the circumstances under which the additional one-year extension would be available and requiring commitment to a specific course of action, by adding the following additional conditions:
Download the comment letter to read the full text.