Featured Product

    CFTC Letter Clarifies Reporting Requirements for Bank Swap Dealers

    August 31, 2021

    The Market Participants Division of the Commodity Futures Trading Commission (CFTC) issued a letter on the capital and financial reporting obligations for swap dealers subject to capital requirements of a prudential regulator under the swap dealers financial reporting rules of CFTC. The letter states that, in lieu of complying with the financial reporting requirements of CFTC and subject to certain specified conditions, bank swap dealers may report utilizing certain alternative forms, filing deadlines, and/or reporting standards that are otherwise applicable to them by their prudential or home-country regulators. The relief granted by the letter would expire on the earlier of October 06, 2023 or on the adoption, by CFTC, of any revised financial reporting and notification requirements applicable to such bank swap dealers.

    The CFTC staff determined that providing the conditional relief on a temporary basis would not adversely impact the ability to monitor the capital position of bank swap dealers to the extent of its obligation under the Commodity Exchange Act and CFTC regulations. The letter was issued in response to a joint request received from the Securities Industry and Financial Markets Association and the International Swaps and Derivatives Association (ISDA) on behalf of their swap dealers members who are otherwise required to comply, by October 06, 2021, with the newly adopted capital and financial reporting requirements of CFTC. In their letter, they requested confirmation that the Market Participants Division of CFTC will not recommend an enforcement action if certain swap dealers subject to capital requirements of a prudential regulator fail to comply with financial reporting requirements set forth in Commission regulation. 

    In this recently published letter, the Market Participants Division of CFTC states that it will not recommend that CFTC take an enforcement action against a bank swap dealer for failure to comply with certain financial reporting requirements if:

    • A bank swap dealer that files a Call Report with its applicable U.S. prudential regulator files the Schedule RC—Balance Sheet and the Schedule RC-R—Regulatory Capital from the Call Report, and Schedule 1 from Appendix C to Subpart E of Part 23 of CFTC's regulations, with CFTC on a quarterly basis in lieu of the Balance Sheet and Statement of Regulatory Capital required under Appendix C, provided that the bank swap dealer files the above schedules with CFTC within the timeframe permitted by its applicable prudential regulator to file its Call Report. 
    • A covered non-U.S. bank swap dealer that does not file a Call Report with a U.S. prudential regulator files a statement of financial condition and a statement of regulatory capital in lieu of the Balance Sheet and Statement of Regulatory Capital required under Appendix C, provided that the statements filed with CFTC contain comparable financial information to the information contained in the Balance Sheet and Statement of Regulatory Capital, and such statements are filed with the covered non-U.S. bank swap dealers home country regulator; and include Schedule 1 of Appendix C with its balance sheet and statement of regulatory capital when filed with CFTC.
    • A covered non-U.S. bank swap dealer that prepares and presents the statement of financial condition, the statement of regulatory capital, and Schedule 1 in accordance with the accounting standards permitted by its applicable home-country regulator, including the accounting principles established in its home jurisdiction, provided the statement of financial condition, statement of regulatory capital, and Schedule 1 are submitted to CFTC in the English language, with balances converted to USD.
    • A covered non-U.S. bank swap dealer files the statement of financial condition, statement of regulatory capital, and Schedule 1 within 15 days of the earlier of the date such financial statements are filed with its home-country regulator or the date such financial statements are required to be filed with its home country regulator. A covered non-U.S. bank swap dealer is required to file the financial statements and Schedule 1 with CFTC as of the end of each quarter, unless the covered non-U.S. bank swap dealer is only required to file such financial statements with its home-country regulator on a semi-annual basis, in which case its financial statements and Schedule 1 must be filed with CFTC on a semi-annual basis.
    • A covered non-U.S. bank swap dealer that is dually registered with the U.S. Securities and Exchange Commission (SEC) as security-based swap dealer files a FOCUS Report Part IIC, or other SEC approved financial reports and schedules, with CFTC in lieu of its reporting obligation under Regulation 23.105(p)(2), provided that the FOCUS Report Part IIC, or other SEC-approved financial reports and schedules, are filed with CFTC on the earlier of the due date for the reports under the SEC rules, or the date the reports were filed with the SEC. The FOCUS Report Part IIC or other SEC-approved financial reports and schedules must be filed with CFTC in the English language with balances converted to USD.

    Keywords: Americas, US, Banking, Reporting, Call Reports, Regulatory Capital, Basel, Swaps, Bank Swap Dealers, ISDA, CFTC

    Featured Experts
    Related Articles
    News

    BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance

    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.

    January 16, 2022 WebPage Regulatory News
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    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.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    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).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    News

    HKMA Extends Repayment for Trade Facilities, Consults on Crypto-Assets

    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.

    January 12, 2022 WebPage Regulatory News
    News

    FCA Registers Securitization Repositories; PRA Issues 2022 Priorities

    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.

    January 12, 2022 WebPage Regulatory News
    News

    EC Regulation Sets Out Methods for Measuring K-Factors Under IFR

    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.

    January 11, 2022 WebPage Regulatory News
    News

    BIS Studies How Platform Models Impact Financial Stability & Inclusion

    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.

    January 10, 2022 WebPage Regulatory News
    News

    CBE Issues Additional Measures to Ease Disruptions from Pandemic

    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.

    January 10, 2022 WebPage Regulatory News
    News

    ESAs Publish List of Financial Conglomerates for 2021

    The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.

    January 07, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7868