Push-out squeezed in before year end
Bloomberg reports that the Federal Reserve completed enactment of the swaps “push-out” rule (also known as the “Lincoln Amendment”) on Christmas Eve. As expected, a bill in Congress to repeal the controversial Section 716 did not survive its Senate passage.
The final version is unchanged from its most recent drafting in June 2013. The rule comes into effect on January 31st 2014, forcing government-backed banks to fence off foreign derivatives trades from US branches.
While the enactment date is clearly of note, it will have little practical effect since most affected banks have applied for, and been granted, a two year grace period to enable compliance. The practical compliance dates for the majority of the market are clustered around June 2015, dependent on the exact date of their grant of exemption
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