Federal Banking Agencies Announce Reopening of Comment Period on Margin and Capital Requirements for Swap Dealers et al.

October 3, 2012 at 6:47 pm Leave a comment

The Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Farm Credit Administration, and Federal Housing Finance Agency (referred to collectively as the “Agencies”), announced on Wednesday, September 26, 2012, the reopening of the comment period on a proposed rule to establish margin and capital requirements for swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants for which one of the agencies is the prudential regulator, as required by sections 731 and 764 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The comment period, which originally expired on July 11, 2012, has been reopened until November 26, 2012 to allow interested parties time to analyze and comment on the proposed margin rules in light of the consultative document on margin requirements for non-centrally-cleared derivatives which was recently published by the Basel Committee on Banking Supervision (“BCBS”) and the International Organization of Securities Commissions (“IOSCO”).

On July 6, 2012, the BCBS and IOSCO published a consultative document which outlined possible margin requirements for non-centrally-cleared derivatives which addresses numerous topics, including: (i) the instruments that would be subject to margin requirements; (ii) the market participants that would be subject to margin requirements; (iii) initial margin and variation margin methodology; (iv) eligible collateral; (v) treatment of provided margin; (vi) treatment of inter-affiliate transactions; and (vii) treatment of cross-border transactions.  The BCBS and IOSCO document is available for review at www.bis.org/publ/bcbs226.pdf.  After evaluation of comments received on the consultative document, BCBS and IOSCO will issue a final policy recommendation for margin requirements for non-centrally-cleared derivatives.

The Agencies intend to consider the final policy recommendations propounded by the BCBS and IOSCO when adopting the final Unites States rules as part of an international effort to implement consistent global standards for non-centrally-cleared derivatives.  Therefore, the Agencies reopened the comment period for the proposed rule to establish swap margin and capital requirements to give interested parties additional time to analyze and comment on the proposal from BCBS and IOSCO.

Interested parties are encouraged to submit written comments to the Agencies prior to the closing of the comment period on November 26, 2012.

For additional information, including instructions on how to submit comments to the Agencies, please see:


Entry filed under: FDIC, Financial Institutions.

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