Latest Articles

On April 29, Commodity Futures Trading Commission Chairman Chris Giancarlo sent a letter to Randy Quarles, the Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, in which he proposed that the US regulators responsible for the administering the margin rules for uncleared swaps should collaborate in providing some relief to non-dealer swap market participants who may become subject to initial margin requirements in 2020. The specific relief would be…
Although the pending reforms to the European Market Infrastructure Regulation (EMIR), commonly referred to as EMIR REFIT, have not yet gone into effect, US and other non-EU managers of non-EU alternative investment funds (AIFs) should start determining now whether they will be affected, and, if so, commence preparations for compliance. Any non-EU AIF that is currently classified as a third-country non-financial counterparty (NFC) that is below the applicable EMIR clearing thresholds (NFC-) is likely to be affected. For…
On April 23, the Board of Governors of the Federal Reserve System proposed revisions to the portions of its regulations that relate to determinations of whether a company has the ability to exercise a controlling influence over another company for purposes of the Bank Holding Company Act or the Home Owners’ Loan Act. The highlight of the proposal is a tiered framework that would substantially revise and clarify the Board’s existing regulatory presumptions of control.…
The Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission has issued no-action relief to swap dealers (SDs) for certain swaps with prime brokerage customers where the customer initiates the swap by executing a trade as agent for the SD on a swap execution facility (SEF).…
On March 15, the five US regulators (the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Farm Credit Administration, the Federal Housing Finance Agency and the Federal Deposit Insurance Corporation) that are responsible for the margin rules for uncleared swaps that apply to prudentially regulated swap dealers adopted an interim final rule designed to ensure that qualifying swaps may be transferred from a UK entity to…
On March 5, the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) issued guidance on two issues that have been identified in connection with the implementation of the framework for margin requirements for non-centrally cleared derivatives previously adopted by the two groups that initially went into effect in 2016. This framework is embodied in the margin rules for uncleared swaps that were adopted in the United States by the…
On March 6, the International Swaps and Derivatives Association (ISDA) published for public comment some proposed amendments to the 2014 ISDA Credit Derivatives Definitions to address the issue of “narrowly tailored” or “manufactured” credit events. This type of credit event came under scrutiny by ISDA because of a few situations in which a company was apparently induced to default on some of its debt in return for advantageous financing, thus creating a credit event for…
On December 19, the US Securities and Exchange Commission voted to issue proposed rules that would require the mandatory use of certain risk mitigation techniques by security-based swap dealers and major security-based swap participants (collectively, SBS Entities). Under the proposed rules, SBS Entities will be required to: Reconcile outstanding security-based swaps with applicable counterparties on a periodic basis; Engage in certain forms of portfolio compression exercises, as appropriate; and Execute written security-based swap trading relationship…