Application of Dodd-Frank Swaps Regulations to Foreign Banks AIBA Quarterly Meeting September 20,...
-
Upload
elfreda-mclaughlin -
Category
Documents
-
view
221 -
download
0
Transcript of Application of Dodd-Frank Swaps Regulations to Foreign Banks AIBA Quarterly Meeting September 20,...
![Page 1: Application of Dodd-Frank Swaps Regulations to Foreign Banks AIBA Quarterly Meeting September 20, 2012 1 David F. Freeman, Jr. Arnold & Porter LLP Washington,](https://reader036.fdocuments.in/reader036/viewer/2022062321/56649ef05503460f94c01223/html5/thumbnails/1.jpg)
1
Application of Dodd-Frank Swaps Regulations to Foreign Banks
AIBA Quarterly Meeting September 20, 2012
David F. Freeman, Jr.Arnold & Porter LLPWashington, [email protected]
![Page 2: Application of Dodd-Frank Swaps Regulations to Foreign Banks AIBA Quarterly Meeting September 20, 2012 1 David F. Freeman, Jr. Arnold & Porter LLP Washington,](https://reader036.fdocuments.in/reader036/viewer/2022062321/56649ef05503460f94c01223/html5/thumbnails/2.jpg)
2
General Requirements of Title VII of Dodd-Frank Act
Registration of Swap Dealers and Major Swap Participants
Centralized Execution, Clearing, Margin and Collateralization of Most Swaps
Reporting of Swap Transactions Anti-Fraud Requirements Division of CFTC/SEC Jurisdiction
![Page 3: Application of Dodd-Frank Swaps Regulations to Foreign Banks AIBA Quarterly Meeting September 20, 2012 1 David F. Freeman, Jr. Arnold & Porter LLP Washington,](https://reader036.fdocuments.in/reader036/viewer/2022062321/56649ef05503460f94c01223/html5/thumbnails/3.jpg)
3
Swap Dealer Regulatory Requirements
Registration of Firm and Key Individuals Reporting of Transactions DCM/SEF Execution Clearing Margin Rules Internal Compliance & Controls Books & Records Disclosures
![Page 4: Application of Dodd-Frank Swaps Regulations to Foreign Banks AIBA Quarterly Meeting September 20, 2012 1 David F. Freeman, Jr. Arnold & Porter LLP Washington,](https://reader036.fdocuments.in/reader036/viewer/2022062321/56649ef05503460f94c01223/html5/thumbnails/4.jpg)
4
Major Swap Participants Regulatory Requirements
Registration Reporting Compliance Program/Internal Controls Anti-fraud/Anti-manipulation
![Page 5: Application of Dodd-Frank Swaps Regulations to Foreign Banks AIBA Quarterly Meeting September 20, 2012 1 David F. Freeman, Jr. Arnold & Porter LLP Washington,](https://reader036.fdocuments.in/reader036/viewer/2022062321/56649ef05503460f94c01223/html5/thumbnails/5.jpg)
5
Cross-Border Issues
DFA 722, 772: Coverage if Some Part of Transactions Occurs in U.S.• A party or counterparty• A guarantor• Arranging or clearing
CFTC Proposal on Cross-Border Issues, Extraterritorial Application and Substitute Compliance 77 Fed. Reg. 41214 (July 12, 2012)
![Page 6: Application of Dodd-Frank Swaps Regulations to Foreign Banks AIBA Quarterly Meeting September 20, 2012 1 David F. Freeman, Jr. Arnold & Porter LLP Washington,](https://reader036.fdocuments.in/reader036/viewer/2022062321/56649ef05503460f94c01223/html5/thumbnails/6.jpg)
6
FX Issues and Potential Exemption
Spot transactions Retail transactions Identified banking products Treasury exemption proposal for FX Swaps and
Forwards, but not options – 76 Fed. Reg. 25774 (May 5, 2011)
Issue on non-deliverable forwards
![Page 7: Application of Dodd-Frank Swaps Regulations to Foreign Banks AIBA Quarterly Meeting September 20, 2012 1 David F. Freeman, Jr. Arnold & Porter LLP Washington,](https://reader036.fdocuments.in/reader036/viewer/2022062321/56649ef05503460f94c01223/html5/thumbnails/7.jpg)
7
Timing
Swap dealer registration triggered by volume of new swaps after October 12, 2012, must register within 2 months after reaching threshold
Major swap participant-registration Conforming Existing Swaps Reporting transactions Recordkeeping Compliance Program Disclosures and anti-fraud
![Page 8: Application of Dodd-Frank Swaps Regulations to Foreign Banks AIBA Quarterly Meeting September 20, 2012 1 David F. Freeman, Jr. Arnold & Porter LLP Washington,](https://reader036.fdocuments.in/reader036/viewer/2022062321/56649ef05503460f94c01223/html5/thumbnails/8.jpg)
8
Interaction with Volcker Rule
Volcker Rule § 619 of Dodd-Frank Act Restricts Proprietary Trading, with Some Exceptions
• Regulated Dealer Exemption• Buy-and-hold• Hedging• US Govis, Munis, CRA investment• Client transactions as agent• Insurance• Cash Management
Foreign Banks Non-U.S. Offices in Transactions Not Involving U.S.
Compliance Rule Proposal – Global Applicability
![Page 9: Application of Dodd-Frank Swaps Regulations to Foreign Banks AIBA Quarterly Meeting September 20, 2012 1 David F. Freeman, Jr. Arnold & Porter LLP Washington,](https://reader036.fdocuments.in/reader036/viewer/2022062321/56649ef05503460f94c01223/html5/thumbnails/9.jpg)
9
DFA § 716 Restricts Access to Fed Discount Window
Restricts Federal Insurance, Fed discount window access, other Federal funding/support for Swap Dealers, Major Swap Participants
Push out exemption for FDIC-insured bank affiliates may not be available to foreign bank branches without FDIC insurance
Broad-based emergency lending program exemption
Proposed legislative fix