Alert April 19, 2011

Banking Agencies Issue Proposal for Swap Margin and Capital Requirements

The FRB, OCC, FDIC, Farm Credit Administration and Federal Housing Finance Agency (the “Agencies”) issued a proposed rule that would establish margin and capital requirements for swap dealers, major swap participants, security-based swap dealers and major security-based swap participants (collectively, “swap entities”) as required by the Dodd-Frank Act.  The proposed rule would require swap entities regulated by the Agencies to (a) collect minimum amounts of initial and variation margin from counterparties  to non‑cleared swaps and non-cleared, security-based swaps (including, in certain cases, end users), and (b) comply with the existing capital standards regarding those instruments.  Comments are due by June 24, 2011.