FED extended by 18 months the initial compliance dates under the single-counterparty credit limit rule, for bank holding companies and foreign banking organizations. The extension applies to the combined U.S. operations of foreign banks and provides additional time for foreign jurisdictions' implementation of the standard to become effective. Under the final rule, the largest foreign banks need to comply with the single-counterparty credit limit, or SCCL, rule by July 01, 2021, whereas smaller foreign banks need to comply by January 01, 2022. The final rule becomes effective on the date of its publication in the Federal Register.
The initial compliance date for a foreign banking organization that has the characteristics of a global systemically important banking organization has been revised from January 01, 2020 to July 01, 2021; the compliance date for any other foreign banking organization subject to the single-counterparty credit limit rule has been amended from July 01, 2020 to January 01, 2022. FR 2590 is the reporting form associated with the single-counterparty credit limit rule. To implement the revisions to the compliance date for the reporting and recordkeeping requirements, FED is revising the information collection titled "Single-Counterparty Credit Limits" (FR 2590; OMB No. 7100-NEW). The information collected by this reporting form will allow the FED to monitor a covered company’s or a covered foreign entity’s compliance with the final single-counterparty credit limit rule.
In June 2018, FED had adopted a final single-counterparty credit rule to enhance financial stability by limiting the exposure that a large domestic or foreign bank can have to another counterparty. The rule applied these limits to both the intermediate holding company and combined U.S. operations of foreign banks, which includes any U.S. branches. For the limits applied to combined U.S. operations, a foreign bank could comply by certifying that it meets a similar rule or standard of its home country. Certain foreign jurisdictions remain in the process of finalizing their rules or standards. This extension allows additional time for foreign banks to comply with the FED rule via certification with a similar home country rule or standard. All other parts of the FED rule remain unchanged.
Effective Date: FR Publication Date
Keywords: Americas, US, Banking, SCCL, Large Exposures, Credit Risk, Counterparty Credit Risk, FR 2590, FED
Previous ArticleAPRA Publishes Guidance for Reporting Loan Payment Deferrals
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.