October 6, the OCC released a notice of proposed rulemaking to establish minimum requirements for the exchange of initial and variation margin between registered swap dealers, major swap participants, security-based swap dealers and major security-based swap participants (covered swap entities) and their counterparties to non-cleared swaps and non-cleared security-based swaps. Comments should be received on or before November 24. Press Release. NPR.
On August 13, the CFTC issued a final rule to exempt swaps entered into by qualified cooperatives from certain clearing requirements. The rule will be effective 30 days after publication in the Federal Register; however, the CFTC granted no-action relief to cover the interim period. CFTC Release. CFTC Final Rule. CFTC No-Action Letter.
On November 8, Fitch updated its criteria for ABCP. Fitch Report.
On November 7, Moody’s updated its approach for incorporating GIC provider ratings in U.S. state revolving fund and pool programs. Moody’s Report.
On November 7, Moody’s updated its approach to incorporating GIC and swap provider ratings in HFA programs. Moody’s Report.
On November 7, S&P released its European CMBS methodology and assumptions. S&P Report.
On November 5, DBRS released its preferred share and hybrid criteria for corporate issuers (excluding financial institutions). DBRS Report.
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On September 26, the CFTC announced an extension of time for compliance for market participants to coordinate on the communication of limits for give-ups and bunched orders for futures and swaps. The extension is intended to provide sufficient time to transition to fully compliant pre-trade screening no later than June 1, 2013. CFTC Release.
On August 16, the CFTC proposed an exemption from clearing requirements under Section 723 of the Dodd-Frank Act for swaps between certain affiliated entities within a corporate group. The proposed exemption would be limited to swaps between majority-owned affiliates and would require centralized risk management, swap trading relationship documentation, variation margin payments, and satisfaction of certain reporting requirements. Comments on the proposed rule must be submitted within 30 days of publication in the Federal Register. CFTC Release. CFTC Proposed Rule.
On June 29, the CFTC approved for public comment proposed interpretive guidance on the cross-border application of the swaps provisions of Title VII of the Dodd-Frank Act. The proposed guidance interprets Section 2(i) of the Commodity Exchange Act (CEA), which states that the swaps provisions of the CEA shall not apply to activities outside the United States unless those activities have a direct and significant connection with activities in, or effect on, commerce of the United States. Comments must be submitted within 45 days after publication in the Federal Register. CFTC Release.
On 23 May 2012, the Treasury Select Committee published a press release on correspondence between its chairman, Andrew Tyrie, and Lord Turner, chair of the FSA, and Sir Nicholas Montagu, Financial Ombudsman Service (FOS) chairman, on the potential mis-selling of interest rate swap products to small businesses by major banks. In his letter, Lord Turner stated that the FSA is “doing more work to understand…the types of products that have been sold” and that if the FSA finds “widespread evidence” of breaches of its rules or mis-selling it “will take action”. Press Release and Correspondence.
On May 18, the CFTC approved a proposed rule that would modify the aggregation provisions for limits on futures and swaps. The proposed rule would permit any person with greater than 10% ownership or equity interest in an entity to disaggregate the owned entity’s positions, provided that protections and firewalls are in place to ensure trading decisions are made independently from one another. CFTC Release.
On May 1, the CFTC voted to issue a proposed interpretative statement to clarify that, in certain instances, foreign regulators are exempt from requirements under the Dodd-Frank Act to enter into confidentiality and indemnification agreements with Swap Data Repositories in connection with its access to swap data. Comments may be submitted for 30 days from publication in the Federal Register. CFTC Release.
On March 30, the SEC issued final rules adopting exemptions for certain security-based swaps under the Securities Act (other than the Section 17(a) anti-fraud provisions), the Securities Exchange Act, and the Trust Indenture Act. Exempt security-based swaps must be issued by certain clearing agencies and satisfy certain conditions. The final rules are effective April 16. Final Rules.