The SEC issued a no-action letter relating to certain technicalities of the swaps clearing process and Section 716 of the Dodd-Frank Act, known as the Pushout Rule.
On May 11, 2012, the SEC issued a no-action letter relating to certain technicalities of the swaps clearing process and the Pushout Rule, Section 716 of the Dodd-Frank Act, which have implications for how banks and other parties account for their swap exposure. The letter is in response to ISDA's® request for the views of the SEC Office of the Chief Accountant (OCA) regarding the accounting impact under US GAAP of a novation of a bilateral OTC derivative contract "on the same financial terms" to, among other entities:
A central counterparty.
A consolidated affiliate that is not insured by the FDIC and does not have access to Federal Reserve credit facilities.
"ISDA" is a registered trademark of the International Swaps and Derivatives Association, Inc. (ISDA). ISDA is not a sponsor of Practical Law and had no part in the development of this resource.