SEC published corrections to certain sections of the final rule on capital and margin requirements for security-based swap dealers and major security-based swap participants, segregation requirements for security-based swap dealers, and notification requirements with respect to segregation for security-based swap dealers and major security-based swap participants. The final rule was published in the Federal Register on August 22, 2019 and became effective on October 21, 2019.
The rule on capital and margin requirements for swaps addresses the following key areas:
- It establishes minimum capital requirements for security-based swap dealers and major security-based swap participants, for which there is no prudential regulator (non-bank security-based swap dealers and major security-based swap participants). This also increases the minimum net capital requirements for broker-dealers that use internal models to compute net capital (ANC broker-dealers). In addition, it establishes capital requirements tailored to security-based swaps and swaps for broker-dealers that are not registered as an security-based swap dealer or major security-based swap participant to the extent they trade these instruments.
- It establishes margin requirements for non-bank security-based swap dealers and major security-based swap participants with respect to non-cleared security-based swaps.
- It establishes segregation requirements for security-based swap dealers and stand-alone broker-dealers for cleared and non-cleared security-based swaps.
- It amends the existing cross-border rule of SEC to provide a means to request substituted compliance with respect to the capital and margin requirements for foreign security-based swap dealers and major security-based swap participants and provide guidance on how SEC will evaluate requests for substituted compliance.
Effective Date: October 21, 2019
Keywords: Americas, US, Banking, Securities, Capital Requirements, Dodd-Frank Act, Security-Based Swaps, Margin Requirements, Segregation Requirements, Reporting, Swap Dealers, Swap Participants, Cross-Border Treatment, SEC
Previous ArticlePRA Tightens Limit for Large Exposures to Certain French NFCs
PRA published a set of questions and answers (Q&A) covering common queries regarding residential and commercial property valuations, for the purpose of the Capital Requirements Regulation (CRR), during the period of disruption caused by COVID-19 pandemic.
IOSCO proposed updates to its principles for regulated entities that outsource tasks to service providers.
MAS announced that the first phase of the Veritas initiative will commence with the development of fairness metrics in credit risk scoring and customer marketing.
BoE published the Statistical Notice 2020/4 to update the buy-to-let (BTL) Phase 2 and Phase 3 definitions for the Interest Rate Type data item.
FSI published a brief note that examines challenges facing the banking sector as a result of the payment deferral programs put in place to support borrowers affected by the COVID-19 pandemic.
PRA published the policy statement PS14/20, which contains the supervisory statement SS1/20 and the feedback to responses to the consultation paper CP22/19 on expectations for investment by firms in accordance with the Prudent Person Principle, or PPP, as set out in the Investments Part of the PRA Rulebook.
EBA published an opinion following the notification by the French macro-prudential authority, the Haut Conseil de Stabilité Financière (HCSF), of its intention to extend a measure introduced in 2018 on the use of Article 458(9) of the Capital Requirements Regulation (CRR).
As part of a Research Bulletin on the recent policy-relevant work, ECB published an article that examines the lessons learned from past crises for nonperforming loan resolution in the post COVID-19 period.
RBNZ published the financial stability report for May 2020. This review of the financial system in the country highlights that the economic disruption associated with COVID-19 will present challenges to the financial system.
ECB updated the guidance notes for reporting related to the statistics on holdings of securities by reporting banking groups (SHSG).