The American Bankers Association joined several financial trade organizations in a letter to the prudential regulators earlier this week calling on them to modify the margin rules for non-cleared swaps and security-based swaps to better align them with international standards.
With uncertainty rising around the United Kingdom’s pending withdrawal from the European Union, five federal regulatory agencies today issued an interim final rule to allow qualifying swaps to be transferred from a UK entity to an affiliate in the EU or the U.S. without triggering new requirements.
ABA today commented on a joint proposed rulemaking issued by the OCC, Federal Reserve and FDIC, Farm Credit Administration and the Federal Housing Finance Administration that would align the agencies’ margin rules with restrictions on qualified financial contracts that took effect last year.
As the ABA Securities Association and other trade groups have urged, the Federal Reserve and the OCC today issued guidance on how examiners will review compliance with the requirement for when swap dealers and major swap participants must exchange variation margin for swaps not cleared through a central counterparty.
With a March 1 compliance deadline looming for when swap dealers and major swap participants must exchange variation margin for swaps not cleared through a central counterparty, the ABA Securities Association and several other trade groups have urged regulators to provide a transition period to facilitate compliance.
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 Commodity Futures Trading Commission today approved a final rule requiring swap dealers and major swap participants to exchange initial margin and variation margin with counterparties to swaps not cleared through a central counterparty.