Prudential Regulators Amend Non-Cleared Swap Margin Requirements

On June 25, 2020, the Board of Governors of the Federal Reserve (the "Federal Reserve"), the Farm Credit Administration (the "FCA"), the Federal Deposit Insurance Corporation (the "FDIC"), the Federal Housing Finance Agency (the "FHFA"), and the Office of the Comptroller of the Currency (the "OCC" and, together with the Federal Reserve, FCA, FDIC, and FHFA, the "Prudential Regulators") approved final amendments (the "Final Rule")¹ to their margin requirements for non-cleared swaps and security-based swaps (together, "swaps") for swap dealers, security-based swap dealers, major swap participants and major security-based swap participants regulated by the Prudential Regulators ("Swap Entities") (the "Margin Rules"). The Final Rule (1) mostly eliminates initial margin ("IM") requirements for swaps between affiliates; (2) preserves legacy status for swaps that are amended to replace certain interest rate provisions or due to technical amendments, notional reductions,