Bank Prudential Regulators Seek New Comments on Proposed Capital and Margin Rules for Non-Cleared Swaps and Security-Based Swaps

15 September 2014
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  • The FRB, FDIC, OCC and other prudential regulators (the “Agencies”) have proposed a new set of initial and variation margin rules for non-cleared swaps and security based swaps of certain CFTC- or SEC-registered entities for which one of those agencies is the prudential regulator.
  • The compliance date for variation margin requirements is December 1, 2015 in all cases, while the compliance dates for the initial margin requirements range from December 1, 2015 to December 1, 2019, depending on the measured swaps exposure of the counterparties (and their affiliates).
  • The proposed margin requirements apply only to CFTC-registered swap dealers and major swap participants, and SEC-registered security-based swap dealers and major security-based swap participants, for which one of the Agencies is the prudential regulator (“Covered Swap Entities”). A Covered Swap Entity’s counterparty will not itself be subject to the margin requirements in the new proposed rules (unless it is also a Covered Swap Entity), but if an entity enters into a Covered Swap with a Covered Swap Entity, it will be indirectly impacted by the margin requirements imposed on the Covered Swap Entity.