FRB and OCC Announce Rules to Reflect ISDA Protocol in Regulatory Capital and Liquidity Coverage Ratio Rules

The Board of Governors of the Federal Reserve System and Office of the Comptroller of the Currency (together, the "Agencies") issued an interim final rule to provide that the treatment of over-the-counter derivatives, eligible margin loans and repo-style transactions under the Agencies' regulatory capital and liquidity coverage ratio rules would be unaffected by the implementation of certain foreign special resolution regimes for financial companies, or by a banking organization's adherence to the ISDA Resolution Stay Protocol.

The interim final rule also ensures that the lending limits of affected national banks and Federal savings associations will remain unchanged.

The interim final rule, which applies to banking organizations other than state nonmember banks, will be effective as of January 1, 2015.

See: FRB Press Release. Related news: G-18 Banks Agree to Sign ISDA Resolution Stay Protocol (October 13, 2014).