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Daily Archives: October 31, 2015

Agencies Finalize Swap Margin Rule

“Five federal agencies have issued a final rule to establish capital and margin requirements for swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants regulated by one of the agencies (“covered swap entities”), as required by the Dodd-Frank Act. The final rule, issued by the Farm Credit Administration (FCA), the Federal Deposit Insurance Corporation (FDIC), the Federal Housing Finance Agency (FHFA), the Federal Reserve, and the Office of the Comptroller of the Currency (OCC), establishes minimum margin requirements for swaps and security-based swaps that are not cleared through a clearinghouse. The margin requirements help ensure the safety and soundness of swap trading in light of the risk to the financial system associated with non-cleared swaps activity. The margin requirements mandate the exchange of initial and variation margin for non-cleared swaps and non-cleared security-based swaps between covered swap entities and certain counterparties. The amount of margin will vary based on the relative risk of the non-cleared swap or non-cleared security-based swap. The requirements are intended to reduce risk, increase transparency, and promote market integrity. Following a law passed by the Congress in January 2015, the rule would not apply to swaps of small banks, savings associations, Farm Credit System institutions, and credit unions with $10 billion or less in total assets that enter into swaps for hedging purposes and meet the exceptions that are available to these small institutions from the requirement to clear standardized swaps through a clearinghouse. The non-cleared swaps of certain financial cooperatives that hedge or mitigate risks associated with originating loans for their members are also exempt from the initial or variation margin requirements of the final rule. In addition, the rule does not apply to swaps entered into by commercial end users for purposes of hedging commercial risk. The final rule is generally similar to the proposed rule issued by the agencies in September 2014 and includes some modifications that were made in light of comments. For example, the agencies have modified the treatment of inter-affiliate swap transactions. The final rule will still require a covered swap entity to collect initial margin from its affiliates, but will not require the posting of initial margin. Instead, a covered swap entity would calculate the amount that it would have been required to post to an affiliate and provide that information to the affiliate on a daily basis. The agencies believe that these changes will promote the safety and soundness of covered swap entities, make the resulting risks transparent to affiliated counterparties, and incentivize strong risk management. Staff of the five agencies consulted with staff of the Commodity Futures Trading Commission and the Securities and Exchange Commission in developing the final rule, as required by the Dodd-Frank Act. The final rule will phase in the variation margin requirements between September 1, 2016, and March 1, 2017. The initial margin requirements will phase in over four years, beginning on September 1, 2016. Additionally, the agencies also issued an interim final rule relating to the rule’s exemption from margin requirements for certain non-cleared swaps and non-cleared security-based swaps used for hedging purposes by commercial end-users and certain other counterparties. The regulation was issued as an interim final rule, as required by the law passed by the Congress in January 2015. The public is invited to submit comments on the interim final rule through January 31, 2016.”

White House – Cybersecurity Strategy and Implementation Plan

Tony Scott – Federal CIO – Modernizing Federal Sybersecurity – [October 30, 2015] “the Administration directed a series of actions to continue strengthening Federal cybersecurity & modernizing the government’s technology infrastructure. Strengthening the cybersecurity of Federal networks, systems, and data is one of the most important challenges we face as a Nation. Every day, public… Continue Reading

The Federal Advisory Committee Act: Analysis of Operations and Costs

CRS Report – The Federal Advisory Committee Act: Analysis of Operations and Costs, Wendy Ginsberg, Analyst in American National Government. October 27, 2015. “Federal advisory committees are established to allow experts from outside the federal government to provide advice and recommendations to executive branch agencies or the President. Federal advisory committees can be created either by… Continue Reading

Model Laws Animal Abuser Registry Act

Animal Law Resource Center – Model Laws Animal Abuser Registry Act Sec. 1. Purpose: “This Act recognizes that it is paramount to the safety and well-being of the community to deal seriously with crimes against animals and separate animal abusers from potential victims. The link between violence against animals and violence against human beings is… Continue Reading

Harvard Law School Library Embarks on Expansive Digitization Project

Erik Eckholm, NYT: “Shelves of law books are an august symbol of legal practice, and no place, save the Library of Congress, can match the collection at Harvard’s Law School Library. Its trove includes nearly every state, federal, territorial and tribal judicial decision since colonial times — a priceless potential resource for everyone from legal… Continue Reading