FHFA - Federal Housing Finance Agency

03/15/2019 | Press release | Distributed by Public on 03/15/2019 18:21

Agencies Adopt Interim Final Rule to Facilitate Transfers of Legacy Swaps

Joint Release

Board of Governors of the Federal Reserve System

Farm Credit Administration

Federal Deposit Insurance Corporation

Federal Housing Finance Agency

Office of the Comptroller of the Currency

Five federal agencies today acted to ensure that qualifying swaps may be transferred from a United Kingdom (UK) entity to an affiliate in the European Union (EU) or the United States without triggering new margin requirements. The action is in response to the possibility of a non-negotiated withdrawal of the UK from the EU. This action applies to legacy swaps that were entered into before applicable regulatory margin requirements took effect and is generally consistent with similar relief contemplated by international jurisdictions.

The interim final rule adopted today would ensure that any legacy swap currently exempt from the agencies' rule on margin for non-cleared swaps would not become subject to the rule if such swap is amended solely for the purpose of transferring it to an affiliate as a result of a non-negotiated UK withdrawal from the EU.

Although the interim final rule is effective immediately, the agencies are accepting comments on the rule for 30 days after publication in the Federal Register.