Margin and Capital Requirements for Swap Entities

Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) established a comprehensive regulatory framework for derivatives, which are generally characterized as swaps and security-based swaps. Sections 731 and 764 of the DFA require the registration and regulation of certain “swap entities”. For certain types of swap entities that are prudentially regulated by one of the Agencies ("covered swap entities"), sections 731 and 764 of the DFA require the Agencies to jointly adopt rules for swap entities under their respective jurisdictions imposing capital requirements and initial and variation margin requirements on all non-cleared swaps. The swaps-related provisions are intended to reduce risk, increase transparency, promote market integrity within the financial system, and, in particular, address a number of weaknesses in the regulation and structure of the swaps markets that were revealed during the financial crisis. The opacity of swap transactions among dealers and between dealers and their counterparties created uncertainty about whether market participants were significantly exposed to the risk of a default by a swap counterparty. The OCC, Board, FDIC, FCA, and FHFA (the Agencies) issued an interim final rule (Brexit Interim Final Rule) that addresses a potential impact of the scenario in which the United Kingdom (U.K.) exits from the European Union (E.U.) without a negotiated withdrawal agreement allowing financial services firms located in the U.K. to continue providing full-scope financial services in the E.U. The Brexit Interim Final Rule includes a new information collection requirement for transfers initiated by a covered swap entity’s counterparty. For those transfers, the counterparty must make a representation to the covered swap entity that the counterparty performed the transfer in compliance with the requirements of the rule.

The latest form for Margin and Capital Requirements for Swap Entities expires 2026-12-31 and can be found here.

§ 349.1(d)(1), (d)(2) Meeting criteria for exemption

Federal Enterprise Architecture: Economic Development - Financial Sector Oversight