Featured Product

    CFTC Approves Rules on Swap Clearing and Margin Requirements

    May 12, 2020

    CFTC, at its open meeting in April 2020, approved certain proposed rules and final rules. One of the proposed rules includes amendments to part 50 clearing requirements for central banks, sovereigns, international financial institutions, bank holding companies, and community development financial institutions. The comment period for this proposed rule ends on July 13, 2020. One of the adopted final rules amends the margin requirements for uncleared swaps for swap dealers and major swap participants for which there is no prudential regulator; the rule is being amended to add the European Stability Mechanism to the list of entities that are expressly excluded from the definition of financial end-user under CFTC regulation 23.151. This final rule will become effective on June 10, 2020.

    Proposed Amendments to Part 50 Clearing Requirements

    CFTC approved proposed amendments to the regulations governing which swaps are exempt from the clearing requirement in section 2(h)(1) of the Commodity Exchange Act. The proposed amendments would address the treatment of swaps entered into by certain central banks, sovereign entities, and international financial institutions. The proposed rulemaking also addresses four no-action letters that the Division of Clearing and Risk of CFTC issued in 2013 and 2017. CFTC is also proposing amendments to exempt from required clearing swaps entered into by certain bank holding companies, savings and loan holding companies, and community development financial institutions. CFTC is proposing to re-codify the regulatory provisions exempting eligible banks, savings associations, farm credit institutions, and credit unions from the definition of “financial entity” for purposes of section 2(h)(7)(A) of the Commodity Exchange Act by moving the current requirements to a separate rule. Additionally, CFTC is proposing to publish a compliance schedule setting forth all the past compliance dates for the 2012 and 2016 swap clearing requirement regulations. The proposal also includes other non-substantive technical amendments.

    Final Rule on Amendments to Part 23 Margin Requirements for the European Stability Mechanism

    CFTC approved a final rule that codifies a CFTC No-Action Letter 19-22 concerning the European Stability Mechanism (ESM). Letter 19-22 states that the Division of Swap Dealer and Intermediary Oversight (DSIO) will not recommend an enforcement action against a registered swap dealer that does not follow the uncleared margin rules with respect to swaps entered into with the European Stability Mechanism. In October 2019, CFTC proposed to codify CFTC Letter No. 17-34 and amend regulation 23.151 to exclude the European Stability Mechanism from the definition of financial end-user and thus exempt from the CFTC Margin Rule uncleared swaps entered into by the European Stability Mechanism. On CFTC approval of the publication of the proposal, DSIO issued staff no-action letter 19-22, which modified the no-action relief under Letter 17-34. CFTC also proposed to correct a typographical error in CFTC regulation 23.157. CFTC is adopting the amendments to regulations 23.151 and 23.157 as proposed.

     

    Related Links

    Comment Due Date: July 13, 2020

    Effective Date: June 10, 2020

    Keywords: Americas, US, Banking, Securities, Swaps, Clearing Requirement, Commodity Exchange Act, Margin Requirements, Margin Rules, Derivatives, CFTC

    Related Articles
    News

    EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package

    EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.

    February 26, 2021 WebPage Regulatory News
    News

    EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway

    The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.

    February 25, 2021 WebPage Regulatory News
    News

    PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks

    In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.

    February 25, 2021 WebPage Regulatory News
    News

    FSB Sets Out Work Priorities for 2021

    In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.

    February 25, 2021 WebPage Regulatory News
    News

    EU Publishes Corrigendum to Revised Capital Requirements Regulation

    EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).

    February 25, 2021 WebPage Regulatory News
    News

    ESAs Issue Statement on Application of Sustainability Disclosures Rule

    ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).

    February 25, 2021 WebPage Regulatory News
    News

    EC Consults on Crisis Management and Deposit Insurance Frameworks

    EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.

    February 25, 2021 WebPage Regulatory News
    News

    HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs

    HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.

    February 24, 2021 WebPage Regulatory News
    News

    EBA Proposes Standards for Supervisory Cooperation Under IFD

    EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.

    February 24, 2021 WebPage Regulatory News
    News

    BoE Addresses Banks in Scope of First Resolvability Assessment

    BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.

    February 24, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6629