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Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

Financial Institution Letters

FIL-61-2015
December 16, 2015

Margin and Capital Requirements for Covered Swap Entities

Printable Format:

FIL-61-2015 - PDF (PDF Help)

Summary:

The FDIC, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Farm Credit Administration, and the Federal Housing Finance Agency (the Agencies) have adopted a final rule to implement Sections 731 and 764 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). These sections require the agencies to adopt rules jointly to establish capital requirements and initial and variation margin requirements for all non-cleared swaps and non-cleared security-based swaps of dealers and major participants. The capital requirements under these sections have been previously incorporated in the Agencies' capital rules.

Statement of Applicability to Institutions with Total Assets Under $10 Billion: In conjunction with the final rule, the Agencies have adopted an interim final rule that would exempt swaps entered into by financial institutions with total assets of $10 billion or less from the final rule, provided the swaps were entered into for hedging purposes. The Agencies seek comments on the interim final rule, for which the comment period closes January 31, 2016.

Highlights:

The final rule imposes certain margin requirements on insured depository institutions and other entities regulated by the Agencies that have registered as swap dealers and major swap participants with the Commodity Futures Trading Commission or as security-based swap dealers and major security-based swap participants with the U.S. Securities and Exchange Commission. These organizations are referred to in the final rule as "covered swap entities" (CSEs). Generally, the final rule would require CSEs to:

In addition, the final rule:

Distribution:

Suggested Routing:

Attachments:

Related Topics:

Contact:

Note:

FDIC Financial Institution Letters (FILs) may be accessed from the FDIC's Web site at https://www.fdic.gov/news/news/financial/2015/.

To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.

Paper copies may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).

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