On February 5, 2018, the U.S. Office of the Comptroller of the Currency, the U.S. Board of Governors of the Federal Reserve System, the U.S. Federal Deposit Insurance Corporation, the U.S. Farm Credit Administration and the U.S. Federal Housing Finance Agency issued a joint notice of proposed rulemaking seeking comment regarding the minimum margin requirements for covered swap entities (the “Swap Margin Rule”). The proposed rule would amend swap margin requirements to ensure conformity with rules recently adopted by the Federal Reserve Board, the OCC and the FDIC, which impose restrictions on certain swap and other financial contracts that are deemed to be qualified financial contracts. The proposed rule would amend the definition of “Eligible Master Netting Agreement” to align with the revised definition of “Qualifying Master Netting Agreement” in the recent rules adopted by the Federal Reserve Board, the OCC and the FDIC, and would ensure that a netting agreement for a firm subject to the Swap Margin Rule is not excluded from the definition of “Eligible Master Netting Agreement” solely on the basis of the firm’s compliance with the recently promulgated qualified financial contract rules. The proposed rule would also provide that certain legacy agreements would not become subject to the Swap Margin Rule solely on the basis of their amendment to comply with the qualified financial contract rules recently promulgated by the Federal Reserve Board, the OCC and the FDIC. Comments to the proposed rule are due no later than 60 days following publication in the Federal Register.
The interagency notice of proposed rulemaking is available at: https://www.occ.treas.gov/news-issuances/news-releases/2018/nr-ia-2018-12a.pdf.
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