Banks that are or may become swap dealers can request transition periods to comply with Dodd-Frank’s swaps entity bailout provisions under guidance issued by the Office of the Comptroller of the Currency. The transition periods are mandated by Section 716 of the Dodd-Frank Act, which is better known for its provisions requiring banks to “push out” certain swaps to affiliates.
Section 716(f) provides that regulators shall permit an initial transition period of up to two years, as appropriate, for insured depository institution swap entities to divest or cease certain swap activities. The OCC’s notice said the agency will consider such requests favorably if those requests meet certain requirements.