OCC Guidance: Transition Period for Swap "Pushout" Provision - January 2013

From MarketsReformWiki
Jump to: navigation, search

On January 4, 2013, the Office of the Comptroller of the Currency (OCC) issued guidance regarding compliance with Section 716 of the Dodd-Frank Act, the swap "pushout" provision, which prohibits banking institutions that are considered "swap entities" from using any federal assistance they receive to support swap activities.[1]


Dodd-Frank specifically prohibits insured depositary institutions - banks, savings associations and insured federal branches - from using any Federal assistance, such as FDIC loans or emergency aid from the Federal Reserve discount window, for swap-related activity (except for certain "conforming swap activities," as defined under section 716(d) of Dodd-Frank. Section 716(f) allowed for the possibility of a transition period to allow such institutions time to wind down non-conforming swap activities.

In April 2012, the OCC and other Prudential Regulators had previously issued joint guidance that set an effective date for the rule of July 16, 2013. To view the April 2012 guidance, click HERE

The January 2013 guidance allows for up to a two year transition period for entities requesting it.

Requesting a Transition

The OCC is prepared to "consider such requests favorably," so long as the request is made in writing and discusses:

  • The institution’s plan for conforming its swap activities;
  • How the requested transition period would mitigate adverse effects on mortgage lending, small business lending, job creation, and capital formation;
  • The extent to which the requested transition period could have a negative impact on the institution’s insured depositors and the DIF;
  • Operational risks and other safety and soundness concerns that a transition period would mitigate.
  • Other facts that the institution believes the OCC should consider.

Requests were due by January 31, 2013

List of Banks Granted Transition, June 2013

On June 11, 2013, the OCC said it had sent letters to seven banks granting them a transition period in order to comply with the push-out provision[2]:

  • JPMorgan Chase,
  • Citigroup,
  • Bank of America,
  • Wells Fargo,
  • Morgan Stanley,
  • US Bancorp and
  • HSBC.

Related Document: Federal Register Entry


  1. OCC to Grant More Time to Comply With DFA Swaps Provision. ABA Dodd-Frank Tracker. Retrieved on January 4, 2013.
  2. Regulator gives big banks two years to push out swaps trading. Reuters, via Yahoo! News. Retrieved on June 12, 2013.

MarketsReformWiki Sponsors

RSM US LLP ADM Investor Services Cinnober Fidessa