What are the results for different types of sweeps?
The funds in Eurodollar accounts after the completion of a sweep will not be protected for any amount under the FDIC’s general deposit insurance regulations or transaction account guarantee component of the Temporary Liquidity Guarantee Program. Rather, the customer will be treated as a general unsecured creditor. (Eurodollar accounts—except for Eurodollar accounts owed to a bank—also do not qualify as senior unsecured debt and, thus, will not be guaranteed under the debt guarantee component of the program). In the case of a repurchase sweep, under the interim rule published in July of 2008, the FDIC will recognize the customer’s ownership interest in securities to the extent that the 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 noninterest-bearing transaction
