The Federal Reserve Board adopted a final rule clarifying that uninsured U.S. branches and agencies of foreign banks will be treated as insured depository institutions for purposes of Section 716 of the Dodd-Frank Act -- the “swaps pushout” provision -- which became effective July 16. As adopted, the final rule is unchanged from an interim rule proposed in June.
Insured depository institutions are permitted up to a two-year period to comply with Section 716 with the possibility of an additional one-year extension. The pushout provision prohibits swap dealers from accessing federal assistance, such as the discount window. The rule establishes a procedure for swap dealers that are state member banks or uninsured U.S. branches of foreign banks to request a transition period.
Read the final rule.