Thomas Caruso

Associate

New York


Read full biography at www.orrick.com

Thomas Caruso is an associate in the Structured Finance group in the New York office.

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Posts by: Thomas Caruso

Agencies Approve Amendments to Swap Margin Rule

 

On September 21, the Farm Credit Administration, the FDIC, the Federal Housing Finance Agency, the Federal Reserve and the OCC approved final amendments to swap margin requirements to conform with recent rule changes that impose new restrictions on certain qualified financial contracts of systemically important banking organizations. These amendments established minimum margin requirements for swaps and security-based swaps that are not cleared through a clearinghouse. The margin requirements are designed to help ensure the safety and soundness of swap entities and reduce risks to the stability of the financial system associated with non-cleared swaps activity. Rule.

CFTC Reduces Risk for Customer Funds Held by Derivatives Clearing Organizations by Expanding Investment Options

 

On July 19, 2018, the Commodity Futures Trading Commission (the “CFTC“) approved an order that allows registered derivatives clearing organizations (“DCOs“) to invest customer euro cash in French and German sovereign debt. Allowing DCOs to invest customer euro cash in high-quality European sovereign debt poses less risk than the current practice of holding customer euro cash at commercial banks. To read the full release, click here.

Rating Agency Developments

 

On July 25, DBRS published an update in its methodology for rating Canadian public pension funds and related exclusive asset managers. Release.

On July 23, Fitch published a criteria report outlining Fitch’s methodology for rating U.S. residential mortgage-backed securities (“RMBS“). Report.

On July 19, DBRS published an update to its methodology for rating collateralized loan obligations (“CLOs“) backed by loans to European small and medium-sized enterprises (“SMEs“). Release.

On July 19, Fitch published a criteria report detailing Fitch’s methodology for analyzing portfolios of corporate credit for rating CLOs and other collateralized debt obligations (“CDOs“). Report.

On July 19, Fitch published rating criteria for notes that rely on the performance of all parties to a one-, two- or three-party transaction (“credit-linked swaps” or “first-to-default swaps“). Report.

Rating Agency Developments

 

On June 28, 2018, Fitch issued a report entitled: Fitch Updates Rating Criteria for U.S. Mortgage Insurance or Guarantee Fund Programs. Release.

On June 22, Moody’s updated its rating methodology for Insurance Brokers and Service Companies. Release.

On June 21, Fitch published rating criteria for rating asset-backed securities backed by U.S. private student loans. Release.

Rating Agency Developments

 

On June 8, 2018, Moody’s published a report entitled: US Public Housing Authority Capital Fund Bonds. Release.

On June 8, 2018, Moody’s published a report entitled: Distribution & Supply Chain Services Industry. Release.

On June 8, 2018, Moody’s published a report entitled: Regulated Water Utilities. Release.

On June 5, S&P published guidance related to its publication “Foreign Exchange Risk In Structured Finance—Methodology And Assumptions”. Release.

On June 6, Moody’s updated its rating methodology for Government-Related Issuers. Release.

On June 1, KBRA published its rating methodology for U.S. Property Assessed Clean Energy (PACE) ABS. Release.

On May 31, Fitch published an addendum describing Fitch’s approach to analyzing derivative counterparty exposure in structured finance transactions rated on a long-term basis. Release.

Agencies Issue Final Rulemaking to Shorten Settlement Cycle

 

On June 1, 2018, the Office of the Comptroller of the Currency (the “OCC“) and the Federal Deposit Insurance Corporation (the “FDIC“) issued a final rule to shorten the standard settlement cycle for securities purchased or sold by OCC-supervised and FDIC-supervised institutions from T+3 to T+2. This change is consistent with the industry’s transition to T+2 – banks are already complying with a two business day settlement standard. The effective date of the final rule is October 1, 2018. FDIC Press Release. OCC Press Release (dated June 7). Rule.