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2020-07-01
article
Margin and Capital Requirements for Covered Swap Entities
Part III
Rules and Regulations
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D09002ee1bdb553d0
United States
Department of the Treasury
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United States Government Agency or Subagency
United States
Office of the Comptroller of the Currency
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org
United States Government Agency or Subagency
United States
Federal Reserve System
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org
United States Government Agency or Subagency
United States
Federal Deposit Insurance Corporation
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United States Government Agency or Subagency
United States
Farm Credit Administration
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United States Government Agency or Subagency
United States
Federal Housing Finance Agency
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United States Government Agency or Subagency
The OCC, Board, FDIC, FCA, and FHFA (each, an agency, and collectively, the agencies) are adopting a final rule that amends the agencies' regulations requiring 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). The Swap Margin Rule as adopted in 2015 takes effect under a phased compliance schedule spanning from 2016 through 2020, and the entities covered by the rule continue to hold swaps in their portfolios that were entered into before the effective dates of the rule. Such swaps are grandfathered from the Swap Margin Rule's requirements until they expire according to their terms. The final rule permits swaps entered into prior to an applicable compliance date (legacy swaps) to retain their legacy status in the event that they are amended to replace an interbank offered rate (IBOR) or other discontinued rate, modifies initial margin requirements for non-cleared swaps between affiliates, introduces an additional compliance date for initial margin requirements, clarifies the point in time at which trading documentation must be in place, permits legacy swaps to retain their legacy status in the event that they are amended due to technical amendments, notional reductions, or portfolio compression exercises, and makes technical changes to relocate the provision addressing amendments to legacy swaps that are made to comply with the Qualified Financial Contract Rules, as defined in the Supplementary Information section. In addition, the final rule addresses comments received in response to the agencies' publication of the interim final rule that would preserve the status of legacy swaps meeting certain criteria if the United Kingdom withdraws from the European Union (hereafter ``Brexit) without a negotiated settlement agreement.
85 FR 39754
https://www.govinfo.gov/app/details/FR-2020-07-01/2020-14097
2020-14097
fr01jy20-13
RIN 1557-AE69
RIN 7100-AF62
RIN 3064-AF08
RIN 3052-AD38
RIN 2590-AB03
4810-33; 6210-01; 6705-01; 6714-01; 7535-01-P
Docket No. OCC-2019-0023
Docket No. R-1682
https://www.govinfo.gov/app/details/FR-2020-07-01/2020-14097
https://www.govinfo.gov/content/pkg/FR-2020-07-01/html/2020-14097.htm
https://www.govinfo.gov/content/pkg/FR-2020-07-01/pdf/2020-14097.pdf
Government-Sponsored Enterprises
Mortgages
Securities
Banks
Banking
Foreign Banking
Holding Companies
Swaps
Savings Associations
Administrative Practice and Procedure
Capital
Margin Requirements
National Banks
Federal Savings Associations
Reporting and Recordkeeping Requirements
Risk
Accounting
Agriculture
Cooperatives
Credit
Rural Areas
27 p.
39754
39780
85 FR 39754
Code of Federal Regulations
Title 12 Part 1221
12 CFR Part 1221
Code of Federal Regulations
Title 12 Part 237
12 CFR Part 237
Code of Federal Regulations
Title 12 Part 349
12 CFR Part 349
Code of Federal Regulations
Title 12 Part 45
12 CFR Part 45
Code of Federal Regulations
Title 12 Part 624
12 CFR Part 624
Regulation Identification Number 1557-AE69
RIN 1557-AE69
Regulation Identification Number 7100-AF62
RIN 7100-AF62
Regulation Identification Number 3064-AF08
RIN 3064-AF08
Regulation Identification Number 3052-AD38
RIN 3052-AD38
Regulation Identification Number 2590-AB03
RIN 2590-AB03
Margin and Capital Requirements for Covered Swap Entities; Federal Register Vol. 85, Issue
RULE
2020-14097
III
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
FEDERAL RESERVE SYSTEM
FEDERAL DEPOSIT INSURANCE CORPORATION
FARM CREDIT ADMINISTRATION
FEDERAL HOUSING FINANCE AGENCY
2020-08-31
Docket No. OCC-2019-0023
Docket No. R-1682
4810-33; 6210-01; 6705-01; 6714-01; 7535-01-P
2020-14097
Final rule.
The OCC, Board, FDIC, FCA, and FHFA (each, an agency, and collectively, the agencies) are adopting a final rule that amends the agencies' regulations requiring 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). The Swap Margin Rule as adopted in 2015 takes effect under a phased compliance schedule spanning from 2016 through 2020, and the entities covered by the rule continue to hold swaps in their portfolios that were entered into before the effective dates of the rule. Such swaps are grandfathered from the Swap Margin Rule's requirements until they expire according to their terms. The final rule permits swaps entered into prior to an applicable compliance date (legacy swaps) to retain their legacy status in the event that they are amended to replace an interbank offered rate (IBOR) or other discontinued rate, modifies initial margin requirements for non-cleared swaps between affiliates, introduces an additional compliance date for initial margin requirements, clarifies the point in time at which trading documentation must be in place, permits legacy swaps to retain their legacy status in the event that they are amended due to technical amendments, notional reductions, or portfolio compression exercises, and makes technical changes to relocate the provision addressing amendments to legacy swaps that are made to comply with the Qualified Financial Contract Rules, as defined in the Supplementary Information section. In addition, the final rule addresses comments received in response to the agencies' publication of the interim final rule that would preserve the status of legacy swaps meeting certain criteria if the United Kingdom withdraws from the European Union (hereafter ``Brexit) without a negotiated settlement agreement.
The final rule is effective August 31, 2020.
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.
Government-Sponsored Enterprises
Mortgages
Securities
Banks
Banking
Foreign Banking
Holding Companies
Swaps
Savings Associations
Administrative Practice and Procedure
Capital
Margin Requirements
National Banks
Federal Savings Associations
Reporting and Recordkeeping Requirements
Risk
Accounting
Agriculture
Cooperatives
Credit
Rural Areas
Margin and Capital Requirements for Covered Swap Entities,
Christopher.Vincent@fhfa.gov
ileonova@fdic.gov
James.Jordan@fhfa.gov
thohearn@fdic.gov
http://www.cftc.gov/LawRegulation/DoddFrankAct/registerswapdealer
https://eba.europa.eu/sites/default/documents/files/document_library//ESAs%202019%2020%20-%20Final%20Report%20-%20Bilateral%20margin%20amendments.pdf
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017D1857&from=ES
https://www.apra.gov.au/sites/default/files/prudential_standard_cps_226_margining_and_risk_mitigation_for_non-centrally_cleared_derivatives.pdf
https://www.bis.org/bcbs/publ/d317.pdf
https://www.bis.org/bcbs/publ/d475.pdf
https://www.bis.org/ifc/publ/ifcb31n.pdf
https://www.bis.org/publ/bcbs261.pdf
https://www.cftc.gov/LawRegulation/DoddFrankAct/registerswapdealer.html
https://www.consilium.europa.eu/en/press/press-releases/2020/01/30/brexit-council-adopts-decision-to-conclude-the-withdrawal-agreement/
https://www.federalreserve.gov/apps/foia/proposedregs.aspx
https://www.hkma.gov.hk/media/eng/doc/key-functions/banking-stability/supervisory-policy-manual/CR-G-14.pdf
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD415.pdf
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD624.pdf
https://www.mas.gov.sg/-/media/MAS/Regulations-and-Financial-Stability/Regulations-Guidance-and-Licensing/Securities-Futures-and-Fund-Management/Regulations-Guidance-and-Licensing/Guidelines/Guidelines-on-Margin-Requirements-for-NonCentrally-Cleared-OTC-Derivatives-Contracts-revised-on-5-October-2018.pdf
https://www.nfa.futures.org/members/sd/index.html
https://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/e22.aspx
Federal Register
Vol. 85, no. 127
Office of the Federal Register, National Archives and Records Administration
2020-07-01
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Table of Contents:
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https://www.govinfo.gov/app/details/FR-2020-07-01
P0b002ee1a74b69e7
0097-6326
0042-1219
0364-1406
769-004-00000-9
000582072
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https://www.govinfo.gov/app/details/FR-2020-07-01
https://www.govinfo.gov/content/pkg/FR-2020-07-01/pdf/FR-2020-07-01.pdf
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