What is the coverage level for repurchase sweeps?
In July 2008 the FDIC issued an Interim Rule establishing the FDIC’s practices for determining deposit and other liability account balances at a failed depositary institution. Under the Interim Rule, the FDIC will recognize the customer’s ownership interest in securities to the extent that a repo sweep customer is the legal owner of identified securities subject to the repurchase agreement. If the customer is not the legal owner of identified securities, the customer’s rights will depend upon the nature of the customer’s account. Assuming that the account is a non-interest-bearing transaction deposit account, the customer’s funds will be fully protected under the TAG component of the Program.
