Federal Register: Prudential Regulators Propose Amendments to Swap Margin Rules
U.S. prudential regulators proposed rule amendments governing margin requirements for uncleared swaps and security-based swaps. The proposed rule amendments were published in the Federal Register. Comments on the proposal must be submitted by December 9, 2019.
As previously covered, the proposal would make five substantive changes to the margin rules: (i) removal of inter-affiliate initial margin, (ii) amendments to permit changes to "legacy" swaps relating to benchmarks, (iii) extension of the compliance period for initial margin, (iv) permission of non-material amendments to "legacy" transactions and (v) clarification regarding documentation requirements when initial margin is not exchanged due to the $50 million threshold.
Related Articles
-
The Federal Reserve Board, Farm Credit Administration, Federal Housing Finance Agency and OCC proposed rule amendments governing margin requirements for uncleared swaps and security-based swaps.
-
The FDIC proposed amending its rules governing margin requirements for uncleared swaps and security-based swaps.
-
The Basel Committee on Banking Supervision and IOSCO agreed to a one-year extension of the implementation of derivatives initial margin requirements.
-
The CFTC Division of Swap Dealer and Intermediary Oversight clarified that "Phase Five" initial margin documentation requirements will not apply to trading relationships where initial margin requirements have not gone above the $50 million threshold.
-
The CFTC Division of Swap Dealer and Intermediary Oversight granted no-action relief allowing swap dealers to permit certain amendments to "legacy swaps" without causing them to lose their legacy status under uncleared swaps margin requirements.
-
Trade associations urged U.S. regulators to provide guidance on implementing BCBS-IOSCO recommended exemptions from swaps margin requirements where the amounts to be transferred are below relevant thresholds.
-
House Financial Services Committee Chair Maxine Waters and Senate Banking Committee Ranking Member Sherrod Brown expressed their "strong opposition" to "weakening" initial margin requirements for swaps between banks and their affiliates.
-
Several trade associations asked U.S. prudential regulators to remove the requirement that swap dealers collect initial margin from their affiliates.
-
Seventeen House Democrats urged prudential regulators to ease initial margin requirements for inter-affiliate swap transactions by harmonizing with the CFTC and other major G20 regulators.
-
The FDIC proposed amending its rules governing margin requirements for uncleared swaps and security-based swaps.