U.S. Branches and Agencies of Foreign Banks: Swaps Push-out Provision: Federal Reserve Issues Rule to Classify Uninsured U.S. Branches and Agencies of Foreign Banks as Insured Depository Institutions for Purposes of the Swaps Push-out Provision of the Dodd-Frank Act and Explain the Process for Obtaining Transition Period ReliefSullivan & Cromwell LLP - June 6, 2013
On June 5, 2013, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) issued an interim final rule (the “Interim Final Rule”) that places U.S. branches and agencies of foreign banks on an equal footing with U.S. banks with respect to the so-called “swaps push-out” provision of Section 716 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The Interim Final Rule, which is effective immediately, reflects the widely expressed intent of Congress, avoids a discriminatory impact on foreign banks, and ameliorates the disruption and other negative consequences that will be experienced by the U.S. branches and agencies of foreign banks and the swap markets.