On August 1, 2016, the US Federal Reserve Board, FDIC, OCC, Federal Housing Finance Agency and Farm Credit Administration announced a final rule exempting from the agencies’ margin requirements certain non-cleared swaps with commercial end users, small banks, savings associations, Farm Credit System institutions and credit unions with $10 billion or less in total assets. Certain non-cleared swaps with certain treasury affiliates, certain financial cooperatives and captive finance companies also are exempted. In all cases, the non-cleared swaps must hedge or mitigate commercial risk of these counterparties and satisfy the applicable requirements for an exemption from mandatory clearing.
The exemptions were first adopted by interim final rule published in the Federal Register in November 2015. The final rule adopts the earlier interim final rule as final without change. The agencies established initial and variation margin requirements for non-cleared swaps, as required by the Dodd-Frank Act, in a separate rulemaking published in November 2015.
The final rule is available at: https://www.fdic.gov/news/news/press/2016/pr16062a.pdf.