Skip to main content
Menu Icon Menu Icon

InfoBytes Blog

Financial Services Law Insights and Observations

Federal agencies permit early adoption of standardized approach for counterparty credit risk

Federal Issues Covid-19 OCC FDIC Federal Reserve System

Federal Issues

On March 26, the OCC, Federal Reserve System, and FDIC issued a notice permitting depository institutions and depository institution holding companies to implement the final rule titled Standardized Approach for Calculating the Exposure Amount of Derivative Contracts (SA-CCR rule) for the first quarter of 2020, on a best efforts basis. A banking organization that elects to adopt the SA-CCR methodology must adopt the methodology for all derivative contracts; a banking organization cannot implement the SA-CCR methodology for a subset of its derivative contracts. A banking organization may adopt some of the technical amendments described in the rule regardless of whether the banking organization chooses to early adopt the SA-CCR methodology. The SA-CCR rule effective date remains April 1, 2020, and the mandatory compliance date remains January 1, 2022.