The U.S. Department of the Treasury has issued interim final rules for reporting and record-keeping requirements under the executive compensation standards of the Troubled Asset Relief Program's (TARP) Capital Purchase Program.
The new rule requires the CEO to certify within 135 days after the financial institution's fiscal year-end that the financial institution and its compensation committee have complied with these executive compensation standards.
In addition, 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 these 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 the 120-day and annual certifications to the TARP chief compliance officer.
The financial institution is also required 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.
SOURCE: U.S. Department of the Treasury