Hybrid RBC (E) Working Group
November 28, 2007
The Hybrid RBC (E) Working Group met via conference call on Wednesday, November 28, 2007. During this meeting the Hybrid RBC (E) Working Group:
- Adopted minutes from the October 18, 2007 conference call in which the Working Group continued discussion on the accounting and reporting options related to Hybrids. The Working Group voted to expose a recommendation that hybrid securities be reported, for year end 2008, in Schedule D Part 1 with a separate “line number” (e.g. XX99999) for hybrids. Note X will also be eliminated. The exposure was for a 21 day period ending November 8, 2007.
- Adopted minutes from the November 13, 2007 conference call, in which the Working Group continued discussions on the hybrid accounting and reporting options. The Working Group adopted the recommendation that hybrid securities be reported, for year end 2008, in Schedule D Part 1 with a separate “line number” (e.g. XX99999) for hybrids with note X eliminated. The Working Group also adopted the AAA report excluding the notching recommendation (which was modified on November 28, 2007).
- Agreed to reconsider the November 13, 2007 decision on excluding the notching and subsequently adopted the AAA report with a one year deferral on the notching recommendation.
- Adopted a motion to continue the short-term solution (notching) for a one year period ending January 1, 2009.
- The Working Group will hold conference calls during December and January to finalize a wrap up memo to the Financial Condition (E) Committee that will recommend referrals back to the Capital Adequacy (E) Task Force and the Valuations of Securities (E) Task Force. In addition, the Working Group will work to finalize responses to an industry frequently asked questions document.
Action Items:
- Exposed and adopted a recommendation that hybrid securities be reported, for year end 2008, in Schedule D Part 1 with a separate “line number” (e.g. XX99999) for hybrids. Note X will also be eliminated.
- Adopted the AAA report with a one year deferral on the notching recommendation.
- Adopted a motion to continue the short-term solution for an addition year ending January 1, 2009.