OCC Renews Swap Margin Reporting Requirements
Published Date: 5/20/2026
Notice
Summary
The Office of the Comptroller of the Currency (OCC) is renewing its paperwork rules for banks and financial firms that handle big swap deals. They want to keep collecting info about margin and capital to keep things safe and sound, but they’re asking for public feedback by June 22, 2026. This update won’t cost extra but helps make sure the rules stay clear and fair.
Analyzed Economic Effects
7 provisions identified: 0 benefits, 6 costs, 1 mixed.
Initial margin model approval and notices
A covered swap entity must get prior OCC approval before using an initial margin model and must notify the OCC in writing 60 days before extending the model to new product types or making certain changes. The OCC must be satisfied before omission of risk factors or use of proxies, and entities must promptly notify the OCC of material model problems and take remedial actions.
OCC renews swap-data paperwork
The OCC has submitted for OMB review a renewal of the information collection titled "Margin and Capital Requirements for Covered Swap Entities" (OMB Control No. 1557-0251) and is asking for public comments by June 22, 2026. The OCC estimates 11 respondents, 88 total annual responses, and 4,895 total annual burden hours, with responses occurring one or three times per year.
Third‑party custody and rehypothecation limits
Covered swap entities must ensure initial margin collateral is held at a third-party custodian under a custody agreement that generally prohibits rehypothecation, repledging, or reuse of collateral; cash collateral may be held in a general deposit account only when used to buy specified assets and purchased within a reasonably necessary time window. Custody agreements must be legally enforceable in all relevant jurisdictions, including in bankruptcy.
Model documentation and internal controls
Covered swap entities must adequately document all material aspects of their initial margin models, maintain written internal authorization and escalation procedures for any change to margin calculations, and ensure independent review and approval of such changes.
Trading documentation and margin rights with counterparties
Covered swap entities must execute trading documentation with each counterparty that grants the contractual right to collect and post initial and variation margin as required and that specifies the methods, inputs, and procedures for valuing non‑cleared swaps for variation margin and resolving valuation disputes.
Record retention for netting agreements
If a covered swap entity relies on an "eligible master netting agreement" for margin calculations, it must conduct and document a legal review and retain those records for as long as the entity relies on the agreement. The requirement is part of the OCC's Margin and Capital Requirements rules in 12 CFR part 45.
Cross‑border substituted compliance process
In limited situations, a covered swap entity may ask regulators for substituted compliance to use a foreign regulatory framework for non‑cleared swaps; requests must include descriptions of the foreign regime, specific provisions, supervisory oversight, and supporting documentation, and can be made only if the entity is directly supervised by the foreign authorities.
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