[Federal Register Volume 84, Number 249 (Monday, December 30, 2019)]
[Proposed Rules]
[Pages 71833-71834]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-28052]



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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 45

[Docket No. OCC-2019-0023]
RIN 1557-AE69

FEDERAL RESERVE SYSTEM

12 CFR Part 237

[Docket No. R-1682]
RIN 7100-AF62

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 349

RIN 3064-AF08

FARM CREDIT ADMINISTRATION

12 CFR Part 624

RIN 3052-AD38

FEDERAL HOUSING FINANCE AGENCY

12 CFR Part 1221

RIN 2590-AB03


Margin and Capital Requirements for Covered Swap Entities

AGENCY: Office of the Comptroller of the Currency, Treasury (OCC); 
Board of Governors of the Federal Reserve System (Board); Federal 
Deposit Insurance Corporation (FDIC); Farm Credit Administration (FCA); 
and the Federal Housing Finance Agency (FHFA).

ACTION: Proposed rule; reopening of comment period.

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SUMMARY: The OCC, Board, FDIC, FCA, and FHFA (collectively, the 
agencies) are reopening the comment period for the notice of proposed 
rulemaking published in the Federal Register on November 7, 2019, to 
amend the agencies' regulations that require swap dealers and security-
based swap dealers under the agencies' respective jurisdictions to 
exchange margin with their counterparties for swaps that are not 
centrally cleared (Proposed Swap Margin Amendments). Reopening the 
comment period that closed on December 9, 2019, will allow interested 
persons additional time to analyze and comment on the Proposed Swap 
Margin Amendments.

DATES: The comment period for the notice of proposed rulemaking 
published on November 7, 2019 at 84 FR 59970, is reopened from December 
9, 2019, to January 23, 2020.

ADDRESSES: You may submit comments by any of the methods identified in 
the notice of proposed rulemaking, except that the FCA is no longer 
accepting comments through the Federal eRulemaking Portal at 
www.regulations.gov. Commenters may submit comments to the FCA through 
any of the other methods that FCA identified in the notice of proposed 
rulemaking.

FOR FURTHER INFORMATION CONTACT: 
    OCC: Chris McBride, Director for Market Risk, Treasury and Market 
Risk Policy, (202) 649-6402, or Allison Hester-Haddad, Counsel, Chief 
Counsel's Office, (202) 649-5490, for persons who are deaf or hearing 
impaired, TTY (202) 649-5597, Office of the Comptroller of the 
Currency, 400 7th Street SW, Washington, DC 20219.
    Board: Constance Horsley, Deputy Associate Director, (202) 452-
5239, Lesley Chao, Lead Financial Institution Policy Analyst, (202) 
974-7063, or John Feid, Principal Economist, (202) 452-2385, Division 
of Supervision and Regulation; Patricia Yeh, Senior Counsel, (202) 452-
3089, Jason Shafer, Senior Counsel, (202) 728-5811, or Justyna Bolter, 
Senior Attorney, (202) 452-2686, Legal Division; for users of 
Telecommunication Devices for the Deaf (TDD) only, contact 202-263-
4869; Board of Governors of the Federal Reserve System, 20th and C 
Streets NW, Washington, DC 20551.
    FDIC: Irina Leonova, Senior Policy Analyst, [email protected], 
Capital Markets Branch, Division of Risk Management Supervision, (202) 
898-3843; Thomas F. Hearn, Counsel, [email protected], Legal Division, 
Federal Deposit Insurance Corporation, 550 17th Street NW, Washington, 
DC 20429.
    FCA: Jeremy R. Edelstein, Associate Director, Finance & Capital 
Market Team, Timothy T. Nerdahl, Senior Policy Analyst, Clayton D. 
Milburn, Senior Financial Analyst, Office of Regulatory Policy, (703) 
883-4414, TTY (703) 883-4056, or Richard A. Katz, Senior Counsel, 
Office of General Counsel, (703) 883-4020, TTY (703) 883-4056, Farm 
Credit Administration, 1501 Farm Credit Drive, McLean, VA 22102-5090.
    FHFA: Christopher Vincent, Senior Financial Analyst, Office of 
Financial Analysis, Modeling & Simulations, (202) 649-3685, 
[email protected], or James P. Jordan, Associate General 
Counsel, Office of General Counsel, (202) 649-3075, 
[email protected], Federal Housing Finance Agency, Constitution 
Center, 400 7th St. SW, Washington, DC 20219. The telephone number for 
the Telecommunications Device for the Hearing Impaired is (800) 877-
8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    On November 7, 2019, the agencies published in the Federal Register 
a notice of proposed rulemaking (the NPR) that would amend the 
agencies' regulations that require swap dealers and security-based swap 
dealers under the agencies' respective jurisdictions to exchange margin 
with their counterparties for swaps that are not centrally cleared 
(Swap Margin Rule).\1\ Specifically, the NPR proposed to make the 
following changes to the Swap Margin Rule:
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    \1\ 84 FR 59970 (Nov. 7, 2019).
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    First, the proposal would provide relief by allowing legacy swaps--
swaps that were entered into before the applicable compliance date of 
the Swap Margin Rule- to be amended to replace existing interest rate 
provisions based on certain interbank offered rates (IBORs) and other 
interest rates that are reasonably expected to be discontinued or are 
reasonably determined to have lost their relevance as a reliable 
benchmark due to a significant impairment, without such swaps losing 
their legacy status.
    Second, the proposal would amend the Swap Margin Rule's 
requirements for inter-affiliate swaps. The proposal would repeal the 
requirement for a covered swap entity to collect initial margin from 
its affiliates, but would retain the requirement that variation margin 
be exchanged for affiliate transactions.
    Third, the proposal would add an additional initial margin 
compliance period for certain smaller counterparties, and clarify the 
existing trading documentation requirements in Sec.  __.10 of the Rule.
    Fourth, the proposal would amend the Swap Margin Rule to permit 
amendments caused by conducting certain routine life-cycle activities 
that covered swap entities may conduct for legacy swaps, such as 
reduction of

[[Page 71834]]

notional amounts and portfolio compression exercises, without 
triggering margin requirements.

II. Reopening of Comment Period and Request for Comment

    The original comment period for the NPR closed on December 9, 
2019.\2\ The agencies received public comments requesting an extension 
of the comment period, noting that the commenters did not have 
sufficient time to analyze fully the agencies' notice of proposed 
rulemaking during the original 30-day comment period. To give these, 
and similarly situated, commenters additional time, the agencies are 
re-opening the comment period through January 23, 2020, until which 
time interested parties may submit public comments on the rule 
amendments proposed and the questions presented in the NPR.
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    \2\ See 84 FR 59970 (November 7, 2019).

    Dated: December 20, 2019.
Jonathan V. Gould,
Senior Deputy Comptroller and Chief Counsel, Office of the Comptroller 
of the Currency.
    By order of the Board of Governors of the Federal Reserve 
System, acting through the Secretary of the Board under delegated 
authority, December 20, 2019.
Margaret McCloskey Shanks,
Deputy Secretary of the Board.
Federal Deposit Insurance Corporation.

    Dated at Washington, DC, on December 19, 2019.
Annmarie H. Boyd,
Assistant Executive Secretary.
    By order of the Board of the Farm Credit Administration.

    Dated at McLean, VA, this 20th day of December, 2019.
Dale L. Aultman,
Secretary.
    December 12, 2019.
Mark A. Calabria,
Director, Federal Housing Finance Agency.
[FR Doc. 2019-28052 Filed 12-27-19; 8:45 am]
 BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P; 8070-01-P; 6705-01-P