CFTC approved amendments to Regulations 23.700 through 23.704, which govern the segregation of assets held as collateral in uncleared swap transactions. The amendments will become effective from May 03, 2019.
The final amendments require that a swap dealer’s (SD) or major swap participant’s (MSP) counterparty be notified of its right to require segregation at the beginning of the swap trading relationship rather than prior to each swap transaction or no less than annually. The final amendments also permit the notification to be provided to an appropriate person at the counterparty who can evaluate and act on it instead of specifying the job title of the person. Additionally, the final amendments allow the parties to negotiate and agree to the terms pursuant to which margin will be segregated and to negotiate and agree as to the types of investments permitted for segregated margin. Finally, the final amendments eliminate the requirement to identify in advance the custodian who will hold segregated margin and permitting the parties to make that selection if the counterparty elects to segregate.
The final rule originated as proposal from the Project KISS initiative, which is intended to simplify and reduce burden by revisiting the rules based on implementation experience and public comment. By reducing the unnecessary complexity and prescriptiveness of these rules, CFTC is providing additional flexibility for market participants, without reducing the effectiveness of its rules.
Related Link: Federal Register Notice
Effective Date: May 03, 2019
Keywords: Americas, US, Banking, Securities, Uncleared Swaps, Major Swap Participant, Swap Dealer, Project KISS, CFTC
Previous ArticleDietrich Domanski of FSB on Priorities for International Cooperation
The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.
The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.
The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.
The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.
The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.
The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.
The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.
The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.
The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.