The Federal Reserve approved on June 5 an interim final rule clarifying the treatment of uninsured U.S. branches and agencies of foreign banks under the so-called swaps push-out provision of the Dodd-Frank Act. The rule gives the institutions the ability to apply for a two-year transition period for isolating certain swaps activities. Section 716 of Dodd-Frank generally prohibits the provision of certain types of federal assistance, such as discount window lending and deposit insurance, to swaps entities such as registered swap dealers, security-based swap dealers, major swap participants and major security-based swap participants. This means that a bank that registers as a swap dealer will be ineligible for deposit insurance or access to the Federal Reserve’s discount window unless the bank “pushes out” its swap dealing activities to non- bank affiliates that are not eligible for deposit insurance or access to the Federal Reserve’s discount window, or ceases to engage in such swaps
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