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OCC Bulletin 2020-66
July 1, 2020
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Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches and Agencies; Department and Division Heads; All Examining Personnel; and Other Interested Parties
On June 25, 2020, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Farm Credit Administration, and the Federal Housing Finance Agency (collectively, the agencies) issued a final rule to amend their regulations regarding the minimum margin and capital requirements for registered swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants (Swap Margin Rule). The OCC’s Swap Margin Rule applies to certain national banks, federal savings associations, and federal branches and agencies of foreign banking organizations (collectively, banks).
The final rule is effective on August 31, 2020.
The OCC expects the proposed rule to have minimal impact on community banks.
The Swap Margin Rule was issued in 2015 with a phased compliance schedule ranging from 2016 to 2020. On November 8, 2019, the agencies proposed amendments to the existing rule and requested public comment. The agencies are finalizing the proposed amendments with certain revisions:
The final rule preserves the status of legacy swaps that are amended to
In addition, the final rule makes certain non-substantive, clarifying amendments to the Swap Margin Rule’s documentation requirements for the exchange of initial margin, which may not become applicable for smaller counterparty relationships until after the counterparty begins trading swaps with a covered bank and exhausts its initial margin threshold amount credit.
Finally, the final rule makes technical changes within the rule addressing amendments to legacy swaps that are made to comply with the qualified financial contract rules and address comments received in response to the agencies’ publication of the interim final rule dealing with Brexit-related issues.
Please contact Christopher McBride, Director for Market Risk, Treasury and Market Risk Policy, at (202) 649-6360, or Jamey Basham, Assistant Director, Chief Counsel’s Office, at (202) 649-5490.
Jonathan V. Gould
Senior Deputy Comptroller and Chief Counsel