On February 23, 2018, the U.S. Office of the Comptroller of the Currency issued a final rule that makes certain technical amendments to its annual stress testing regulation. The stress testing regulation provides that the OCC may require an institution to include trading and counterparty components in its adverse and severely adverse scenarios if the institution has significant trading activities. Under the final rule, the date range of this position data has been expanded from between January 1 and March 1 of the current calendar year to between October 1 of the preceding calendar year and March 1 of the current calendar year. The final rule notes that this will provide the OCC with greater flexibility in establishing an appropriate as-of date and that the U.S. Board of Governors of the Federal Reserve System has made a similar change to its corresponding regulations. The final rule also amends and clarifies the transition period for institutions that meet the $50 billion asset threshold, which subjects the institution to different stress testing requirements. Under the final rule, if an institution crosses the $50 billion threshold in the fourth quarter of a calendar year, it will not be subject to the supervisory stress testing requirement until the third calendar year after it crossed the threshold. Otherwise, institutions become subject to the over $50 billion stress testing requirements two calendar years after crossing the threshold. The final rule also makes definitional and other technical changes. The final rule will become effective 30 days from its publication in the Federal Register.
The full text of the final rule is available at: https://www.occ.treas.gov/news-issuances/news-releases/2018/nr-occ-2018-20a.pdf.
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