Washington Report 360 | June 21, 2019
Washington Report 360 | June 21, 2019
Insight

Washington Report 360 | June 21, 2019

DFAST stress test results; Fed Reserve proposed rule amendments; SEC package of final rules; Fed Reserve to analyze LIBOR reform

Key highlights

  • DFAST stress test results will be released today (June 21) and CCAR results on June 27.
  • Federal Reserve proposed rule amendments to “expand the ability” of supervised financial institutions to share confidential supervisory information (CSI) with various entities including auditors.
  • SEC adopted a package of final rules covering capital, margin, and segregation requirements for security-based swap dealers and major security-based swap participants.
  • Federal Reserve has been asked to analyze LIBOR reform “disruption” for borrowers and financial firms, and provide financial institutions with guidance on the transition.

Financial services legislative and regulatory news


The Federal Reserve:

  • Will release the DFAST stress testing results today, June 21, and CCAR results on June 27.
  • Proposed amendments to its rules governing the disclosure of confidential supervisory information to “expand the ability” of a supervised financial institution to share CSI with its auditors, affiliates, outside legal counsel, and other federal and state banking agencies.
  • Chair stated the agency is monitoring banking exposure to leveraged lending risk though the “greatest risk” is in “market-based vehicles.” (American Banker)

The federal banking agencies jointly published a final rule to streamline regulatory reporting requirements for certain small insured depository institutions (institutions with total assets of less than $5 billion that do not engage in certain complex or international activities).

The SEC published:

  • A package of final rules covering capital, margin, and segregation requirements for security-based swap dealers and major security-based swap participants, and amending the capital and segregation requirements for broker-dealers.
  • A concept release seeking input on ways to simplify and improve the exempt offering framework.
  • A staff report on the impact of Regulation Crowdfunding on capital formation and investor protection.

A member of the House Financial Services Committee called for a hearing on Facebook’s recently announced global cryptocurrency project, which he said “has a worldwide platform and scale that can impact global payments and the digital currency market.”

Financial services policy news


LIBOR reform:

  • The Ranking Member of the House Financial Services Committee requested the Federal Reserve analyze the “disruption” for borrowers and financial firms, and provide financial institutions with guidance on the transition. (ABA Banking Journal)
  • FASB announced tentative approval for accounting relief for certain contract modifications arising from a change in reference interest rates.

The Senate confirmed Allison Lee to serve as a Commissioner for the SEC. (Reuters)

The FSB published a progress report on implementation of its Principles and Standards for Sound Compensation Practices by “significant” banks.

The IOSCO Cyber Task Force released a final report recommending financial market regulators and firms review their cyber practices against three existing “Core Standards” and enhance their cyber regimes using those models.

The Basel Committee agreed on a “targeted and limited revision” of the leverage ratio as well as certain revisions to the leverage ratio disclosure requirements.