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The Office of the Comptroller of the Currency ("OCC") reported that derivatives trading revenue of insured U.S. commercial banks and savings associations dropped to $4.2 billion in the fourth quarter of 2018. This represented a $2.9 billion (or 41 percent) decrease over revenue compared to the previous quarter and $1.7 billion less (or 28.5 percent) than last year. In addition, the report found that derivative notional amounts went down in the fourth quarter of 2018 14.8 percent to $176.4 trillion and that derivative contracts continued to be concentrated in interest rate products. The report

U.S. prudential regulators, including the Federal Reserve Board, Office of the Comptroller of the Currency, FDIC, Farm Credit Administration and the Federal Housing Finance Agency issued an interim final rule to create certain Brexit-related swap margin requirement exceptions. The interim final rule was published in the Federal Register (see here for previous coverage). The interim final rule is effective on March 19, 2019. Comments must be submitted to the regulators by April 18, 2019.

Commentary by Nihal Patel

U.S. prudential regulators adopted an interim final rule to add certain Brexit-related exceptions from swaps margin requirements. According to the prudential regulators ( i.e. , the Federal Reserve Board, Office of the Comptroller of the Currency, FDIC, Farm Credit Administration, and the Federal Housing Finance Agency), the new provision is intended to preserve the status quo for "legacy" swaps in the event of a "no-deal" Brexit. The new rule provides that certain swaps will not lose their "legacy" status ( i.e. , excluded from the scope of margin rules) as a result of changes made in

The Comptroller of the Currency, the Federal Reserve Board and the FDIC extended the comment period on a proposal allowing "advanced-approaches" banking organizations ( i.e. , those with $250 billion or more in total consolidated assets, or $10 billion or more in on-balance sheet foreign exposure) to use an alternative approach for calculating derivative exposures under regulatory capital rules. The comment period deadline was extended from February 15, 2019 to March 18, 2019.