Shearman & Sterling LLP | Financial Regulatory Developments Focus | US Prudential Regulators Amend Swap Margin Rule to Reflect QFC Stay Requirements
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  • US Prudential Regulators Amend Swap Margin Rule to Reflect QFC Stay Requirements
    09/21/2018
    The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Farm Credit Administration and the Federal Housing Finance Agency (together, the "Prudential Regulators") have approved amendments to their margin requirements for uncleared swaps and security-based swaps to align with regulations of the Board, FDIC and OCC relating to stays on default remedies for certain qualified financial contracts (QFC Rules). The final amendments conform the definition of "eligible master netting agreement" under the Swap Margin Rule with the "qualifying master netting agreement" definition in the QFC Rules. Therefore, master netting agreements that comply with the limitations on default remedies in the QFC Rules are not excluded from the definition of EMNA for purposes of the Swap Margin Rules. Additionally, any legacy uncleared swaps not subject to the Swap Margin Rule would not become subject to the Swap Margin Rule due solely to amendments to comply with the QFC Rules.

    The final amendments are effective 30 days following their publication in the Federal Register.

    View the final amendments.

    View the Prudential Regulators' joint press release.

    Return to main website.
    TOPIC: Derivatives