WASHINGTON (Reuters) - U.S. regulators adopted on Friday a rule that will allow qualified swaps to be transferred from entities in the United Kingdom to their affiliates in the European Union without triggering new margin requirements, a response to a potential “hard” Brexit.
The interim rule takes effect immediately and is open for public comment.
The rule comes as a possible “non-negotiated withdrawal” of Britain from the EU still looms ahead of a deadline later this month, the Federal Reserve said in a joint statement with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Farm Credit Administration and the Federal Housing Finance Agency.
The EU’s markets watchdog, however, has ruled out the need for measures to avoid potential disruption in certain cross-border derivatives contracts if Britain leaves the bloc this month without a deal.
Reporting by Katanga Johnson; Editing by Paul Simao