Regulatory Alerts2019-05-02 | 2019-08898Netting Eligibility for Financial Institutions
The Board of Governors of the Federal Reserve System proposes to amend Regulation EE to expand the definition of 'financial institution' to include swap dealers, security-based swap dealers, major swap participants, nonbank systemically important financial institutions, designated financial market utilities, and foreign banks. This expansion aims to extend FDICIA's netting protections to these entities, thereby reducing systemic risk and enhancing efficiency in financial markets. The proposal also clarifies how the existing activities-based test for financial institution status applies following the consolidation of legal entities.
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