OCC Stress Testing Guidance and CRE Stress Test Tool
On October 18, the OCC provided guidance to national banks and federal savings associations with assets of $10 billion or less on using stress testing to assess risk in their loan portfolios. The guidance indicates that stress tests do not need to involve sophisticated analysis or third-party consultative support. The OCC is also making available a new portfolio level stress tool for income producing commercial real estate loans. OCC Release.
SEC Proposed Rule for Security-Based Swap Dealers and Major Security-Based Swap Participants
On October 17, the SEC proposed capital, margin, and segregation requirements for security-based swap dealers and major security-based swap participants as required by the Dodd-Frank Act. The proposal: (i) sets minimum capital requirements; (ii) establishes margin requirements with respect to non-cleared security-based swaps; and (iii) establishes segregation requirements for security-based swap dealers and notification requirements with respect to segregation for security-based swap dealers and major security-based swap participants. Comments may be submitted for 60 days following publication in the Federal Register. SEC Release. SEC Proposed Rule.
CFTC Final Rule to Incorporate Swaps into Existing Regulations
On October 16, the CFTC approved a final rule that amends regulations to implement aspects of the Dodd-Frank Act by changing certain definitions and recordkeeping regulations so that they apply to both futures and swaps. The final rule will be effective 60 days after publication in the Federal Register. CFTC Release.
CFTC No-Action Letters
On October 12, the CFTC released a number of no-action letters and interpretive guidance addressing:
- Swap calculation by certain foreign entities for purposes of the swap dealer and major swap participant definitions. CFTC Release. CFTC Letter No.12-22.
- Temporary relief for foreign exchange swaps and foreign exchange forwards in the major swap participant and swap dealer calculations and a related temporary registration exemption for CPO and CTA registration. CFTC Release. CFTC Letter No.12-21.
- Treatment of agricultural and exempt commodities for swap dealer and major swap participant calculations. CFTC Release. CFTC Letter No.12-20.
- The scope of the bona fide hedgingexemption from the trading thresholds as applied to registered investment companies. CFTC Release. CFTC Letter No.12-19.
- The de minimis threshold for swaps with utility special entities. CFTC Release. CFTC Letter No.12-18.
- Interpretation of the eligible contract participant requirements. CFTC Release. CFTC Letter No.12-17.
- Temporary relief from registration for swap intermediaries. CFTC Release. CFTC Letter No.12-15.