Agencies issue interim rule on legacy swaps transfers

The Federal Reserve, FDIC, OCC, Farm Credit Administration, and Federal Housing Finance Agency have issued a joint press release announcing an interim final rule [84 FR 9940, 3/19/2019] to ensure that qualifying swaps may be transferred from a United Kingdom entity to an affiliate in the European Union 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 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 the 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.

This rule was effective on publication (3/19/2019), with a comment period ending 4/18/2019.

[Updated with publication information, effective and comment dates]