February 05, 2018

US Agencies (OCC, FED, FDIC, FHFA, and Farm Credit Administration) proposed amendments to the swap margin requirements. The proposed amendments are intended to conform with the recent rule changes that impose new restrictions on certain qualified financial contracts (QFCs) of systemically important banking organizations. US Agencies request comments on the proposed amendments no later than 60 days after the date of their publication in the Federal Register.

Under the proposed amendments, legacy swaps that have been entered into before the applicable compliance date would not become subject to the margin requirements, if they are amended solely to comply with the requirements of the QFC Rules. The proposed amendments would also harmonize the definition of Eligible Master Netting Agreement in the Swap Margin Rule with the recent changes to the definition of Qualifying Master Netting Agreement in the respective capital and liquidity regulations of the FED, FDIC, and OCC by recognizing the restrictions that were adopted by these agencies with respect to the QFC Rules.

The Swap Margin Rule was issued in November 2015 by the US Agencies; the rule established minimum margin requirements for swaps and security-based swaps that are not cleared through a clearinghouse. The margin requirements are designed to help ensure the safety and soundness of swap entities and reduce risks to the stability of the financial system associated with non-cleared swaps activity.


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Keywords: Americas, US, Banking, Swap Margin Rule, QFC, QFC Rules, US Agencies

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