Five US Agencies approved final amendments to swap margin requirements. These amendments conform with the recent rule changes that impose new restrictions on certain qualified financial contracts of systemically important banking organizations (QFC Rules). The five US agencies are Farm Credit Administration, FDIC, FED, FHFA, and OCC. The final rule will be effective from November 09, 2018.
Under the amendments, legacy swaps entered into before the applicable compliance date will not become subject to the margin requirements if they are amended solely to comply with the requirements of the QFC Rules. The amendments harmonize the definition of "Eligible Master Netting Agreement" in the swap margin rule with recent changes to the definition of "Qualifying Master Netting Agreement" in the respective capital and liquidity regulations of FED, FDIC, and OCC by recognizing the restrictions that were adopted by these agencies with respect to the QFC Rules.
US Agencies issued the swap margin rule in November 2015 and 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.
Effective Date: November 09, 2018
Keywords: Americas, US, Banking, Securities, Swap Margin Rule, Qualified Financial Contracts, Master Netting Agreement, US Agencies
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