Featured Product

    CFTC Seeks Comments on Swap Clearing Requirements for IBOR Transition

    November 23, 2021

    The Commodity Futures Trading Commission (CFTC) is seeking comments on how it could amend the swap clearing requirement to address the cessation of certain interbank offered rates (IBORs) used as benchmark reference rates and the market adoption of alternative reference rates—namely, the overnight, nearly risk-free reference rates. It also includes enumerated requests for data and other information related to IBOR and alternative reference rate swaps and enumerated requests for comment related to the CFTC’s current swap clearing requirement, alternative reference rate swaps, new swap product documentation, and swap clearing requirement specifications. CFTC will use the information and comments received to inform modifications to the CFTC’s swap clearing requirement to address ongoing benchmark transition efforts. The feedback period ends on January 24, 2022.

    CFTC recognizes that information related to the transition away from IBORs is changing daily. Thus, it invites commenters to provide new or updated information related to any aspect of the transition away from IBORs that may offer additional background for CFTC to consider. CFTC requests information related to a derivatives clearing organization's ability to continue clearing or offering clearing services for swaps that reference GBP LIBOR, JPY LIBOR, CHF LIBOR as well as 1-week and 2-month USD LIBOR after December 31, 2021, EONIA after January 03, 2022, or, in the case of remaining USD LIBOR tenors and SGD SOR-VWAP, after June 30, 2023. CFTC also requests comments on actions or regulatory amendments that could facilitate the IBOR transition for market participants. If CFTC recommends to modify the termination date range, or any other specifications, with respect to SONIA overnight index swaps (OIS), AONIA OIS, CORRA OIS or any other OIS that are subject to the Clearing Requirement and for which the index has been nominated as an alternative reference rate, please discuss a potential timeline for considering and adopting a modification and the reasons for adopting such timeline.

    CFTC requests that registered swap dealers and other market participants provide data related to market participants' outstanding net LIBOR risk as of November 30, 2021. In general, CTC requests comment on all aspects of the swap clearing requirement and any related regulations that may be affected by the transition away from LIBOR and the other IBORs to alternative reference rates. CFTC seeks comments on these matters generally and commenters are also encouraged to address any relevant matters that are not specifically identified in the requests for comment in this Federal Register notice. CFTC recognizes that, at this time, a majority of the swaps subject to the Clearing Requirement fall within the fixed-to-floating swap class. However, this may change as new alternative reference rates are adopted and will be characterized as OIS or other types of swaps. Among other factors, CFTC is seeking comments on whether it should designate any additional classes of swaps or specifications for purposes of classifying swaps under the CFTC regulation 50.4 or whether derivatives clearing organizations or market participants have suggestions about how to reorganize or structure the classes of swaps subject to the clearing requirement under this regulation.

     

    Related Link: Federal Register Notice

    Comment Due Date: January 24, 2022

    Keywords: Americas, US, Banking, Securities, Derivatives, Swaps, LIBOR Transition, Benchmark Reforms, LIBOR, IBORs, Alternative Reference Rates, Overnight Index Swaps, EONIA, Swap Clearing, CFTC

    Related Articles
    News

    BIS Bulletin Examines Cognitive Limits of Large Language Models

    The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.

    January 25, 2024 WebPage Regulatory News
    News

    ECB is Conducting First Cyber Risk Stress Test for Banks

    As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.

    January 24, 2024 WebPage Regulatory News
    News

    EBA Continues Momentum Toward Strengthening Prudential Rules for Banks

    A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.

    January 24, 2024 WebPage Regulatory News
    News

    EU and UK Agencies Issue Updates on Final Basel III Rules

    The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards

    December 19, 2023 WebPage Regulatory News
    News

    Industry Agency Expects Considerable Uptake for Swiss Climate Scores

    The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.

    December 18, 2023 WebPage Regulatory News
    News

    BCBS Consults on Disclosure of Climate Risks, Issues Other Updates

    The Basel Committee on Banking Supervision (BCBS) launched consultation on a Pillar 3 disclosure framework for climate-related financial risks, with the comment period ending on February 29, 2024.

    December 18, 2023 WebPage Regulatory News
    News

    US Government Moves to Regulate Development and Use of AI Models

    The U.S. President Joe Biden signed an Executive Order, dated October 30, 2023, to ensure safe, secure, and trustworthy development and use of artificial intelligence (AI).

    December 18, 2023 WebPage Regulatory News
    News

    MAS Launches Gprnt Digital Platform for ESG Reporting for SMEs

    The Monetary Authority of Singapore (MAS) launched an integrated digital platform, Gprnt, also known as “Greenprint.”

    November 29, 2023 WebPage Regulatory News
    News

    EBA Finalizes Templates for One-Off Climate Risk Scenario Analysis

    The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.

    November 28, 2023 WebPage Regulatory News
    News

    NGFS Publishes Phase IV Long-term Climate Scenarios for Banks

    The Network for Greening the Financial System (NGFS) published its latest set of long-term climate macro-financial scenarios (Phase IV) for assessing forward-looking climate risks.

    November 28, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8947