Uncleared Swap Margin Exemptions Finalized for Small Banks and End Users

The federal banking agencies are issuing a final rule affirming that swaps and security-based swaps that are not cleared through a central counterparty and are entered into for hedging purposes by banks with less than $10 billion in assets and commercial end users are not subject to requirements to exchange initial margin and variation margin with prudentially-regulated swap dealers and major swap participants.

The final rule, to be published in the Federal Register tomorrow, leaves unchanged an interim final rule approved last fall. The interim final rule has been in effect since April 1, and the final rule takes effect Oct. 1. For more information, contact ABA’s Jason Shafer.