In case they have forgotten, medium-sized securities firms with total consolidated assets between $10 billion and $50 billion have been reminded by regulators about the disclosure requirements for the annual stress tests that they are required to conduct.
“These medium-sized companies are required to conduct annual, company-run stress tests implementing a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act — with the results disclosed to the public for the first time this year,” according to a joint statement from the board of governors of the Federal Reserve System, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency.
“The firms are required to disclose certain information, including: a description of the types of risks included in the stress test; a summary description of the methodologies used in the stress test; estimates of losses, revenue, and net income; post-stress capital ratios; and an explanation of the most significant causes for the changes in regulatory capital ratios,” according to the statement.
“As the agencies have previously stated, medium-sized companies are not subject to stress tests conducted by the agencies or the Federal Reserve’s annual Comprehensive Capital Assessment and Review. The company-run stress tests are hypothetical results and are not intended to be forecasts or expected outcomes, and the agencies will not make any public statements about the results,” officials say.
The stress test results must be disclosed by the companies between June 15 and June 30 of this year, regulators say.
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