Regulatory AlertsSR 20-29: Treatment of Certain Legacy Swaps Affected by Brexit and the Swap Margin Rule
The Federal Reserve and the OCC issued a joint statement exercising discretion to not recommend enforcement action against covered swap entities that amend legacy swaps to transfer them from the UK to the EU or US. This relief ensures these swaps maintain grandfathered treatment under the Swap Margin Rule, addressing regulatory uncertainty following the expiration of the Brexit Transition Period. The accommodation applies specifically to modifications made solely for the purpose of transferring swaps to affiliates in jurisdictions where passporting rights may be lost.
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