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Banker Resource Center

Derivatives

Derivatives contracts generally represent agreements between parties either to make or receive payments or to buy or sell an underlying asset on a certain date (or dates) in the future. Parties generally use derivative contracts to mitigate risk, although such transactions may serve other purposes.

Laws and Regulations

Key laws and regulations that pertain to FDIC-supervised institutions; note that other laws and regulations also may apply.

  • Part 349 Derivatives — Appendix A Margin and Capital Requirements for Covered Swap Entities (also known as the Swap Margin Rule) establishes initial and variation margin requirements for covered swap entities
  • Part 324 — Capital Adequacy of FDIC-Supervised Institutions includes provisions regarding the capital treatment of derivatives exposures for the purpose of risk-based capital requirements and the supplementary leverage ratio
  • Part 327 Subpart A — Appendix A — Description of Scorecard Measures — Assessments includes provisions regarding the treatment of derivatives in deposit insurance assessments
  • Relevant Federal Register Notices incorporated into Parts 349, 324, and 327 that describe the basis and purpose of the rules and their revisions
    • Margin and Capital Requirements for Covered Swap Entities changes requirements to the Swap Margin Rule that (1) permit swaps entered into prior to an applicable compliance date (legacy swaps) to retain their legacy status in the event that they are amended to replace an interbank offered rate (IBOR) or other discontinued rate, (2) modify initial margin requirements for non-cleared swaps between covered swap entities and their affiliates, (3) introduce an additional compliance date for initial margin requirements, (4) clarify the point in time at which trading documentation must be in place, (5) permit legacy swaps to retain their legacy status in the event that they are amended due to technical amendments, notional reductions, or portfolio compression exercises, (6) make technical changes to relocate the provision within the rule addressing amendments to legacy swaps that are made to comply with the qualified financial contract rules, and (7) address comments received in response to the agencies’ publication of the interim final rule dealing with Brexit-related issues
    • Amendments that conform the Swap Margin Rule to rules that impose restrictions on certain qualified financial contracts, including non-cleared swaps
    • Swap Margin Rule establishes margin and capital requirements for swap covered entities
    • Standardized Approach for Calculating the Exposure Amount of Derivative Contracts implements the standardized approach for counterparty credit risk (SA-CCR), to calculate the exposure amount of derivative contracts for risk-based capital requirements and supplementary leverage ratio under Part 324 and for FDIC assessments under Part 327

Supervisory Resources

Frequently asked questions, advisories, statements of policy, and other information issued by the FDIC alone, or on an interagency basis, provided to promote safe-and-sound operations.

Other Resources

Supplemental information and guidance related to safe and sound banking operations.

Videos/Webcasts/Teleconferences

Informational videos and recordings of prior webcasts and teleconferences.