Out of respect for readers' time demands, I try to never blog twice in the same day. However, today the U.S. Department of the Treasury issued additional interim final rules for reporting and recordkeeping requirements under the executive compensation standards of the TARP Capital Purchase Program (CPP).
The new rule requires the CEO of a participating institution to certify annually within 135 days after the institution's fiscal year end that the institution and its compensation committee have complied with these executive compensation standards. Additionally, within 120 days of the closing date of the Securities Purchase Agreement between the financial institution and the Treasury, the CEO is required to certify that the compensation committee has reviewed the senior executives' incentive compensation arrangements with the senior risk officers to ensure that the arrangements do not encourage senior executives to take unnecessary and excessive risks that could threaten the value of the financial institution. The CEO must provide this 120-day and annual certifications to the TARP Chief Compliance Officer.
The new rules also require the financial institution to keep records to substantiate these certifications for at least six years following each certification and provide these records to the TARP Chief Compliance Officer upon request.