1. Application of Dodd-Frank Swaps Regulations to Foreign Banks AIBA Quarterly Meeting September 20, 2012 1 David F. Freeman, Jr. Arnold & Porter LLP Washington, D.C. 202-942-5745 david.freeman@aporter.com

2. General Requirements of Title VII of Dodd-Frank Act  Registration of Swap Dealers and Major Swap Participants  Centralized Execution, Clearing, Margin and Collateralization of Most Swaps  Reporting of Swap Transactions  Anti-Fraud Requirements  Division of CFTC/SEC Jurisdiction 2

3. Swap Dealer Regulatory Requirements  Registration of Firm and Key Individuals  Reporting of Transactions  DCM/SEF Execution  Clearing  Margin Rules  Internal Compliance & Controls  Books & Records  Disclosures 3

4. Major Swap Participants Regulatory Requirements  Registration  Reporting  Compliance Program/Internal Controls  Anti-fraud/Anti-manipulation 4

5. Cross-Border Issues  DFA 722, 772: Coverage if Some Part of Transactions Occurs in U.S. A party or counterparty A guarantor Arranging or clearing  CFTC Proposal on Cross-Border Issues, Extraterritorial Application and Substitute Compliance 77 Fed. Reg. 41214 (July 12, 2012) 5

6. FX Issues and Potential Exemption  Spot transactions  Retail transactions  Identified banking products  Treasury exemption proposal for FX Swaps and Forwards, but not options – 76 Fed. Reg. 25774 (May 5, 2011)  Issue on non-deliverable forwards 6

7. Timing  Swap dealer registration triggered by volume of new swaps after October 12, 2012, must register within 2 months after reaching threshold  Major swap participant-registration  Conforming Existing Swaps  Reporting transactions  Recordkeeping  Compliance Program  Disclosures and anti-fraud 7

8. Interaction with Volcker Rule  Volcker Rule § 619 of Dodd-Frank Act  Restricts Proprietary Trading, with Some Exceptions Regulated Dealer Exemption Buy-and-hold Hedging US Govis, Munis, CRA investment Client transactions as agent Insurance Cash Management  Foreign Banks Non-U.S. Offices in Transactions Not Involving U.S.  Compliance Rule Proposal – Global Applicability 8

9. DFA § 716 Restricts Access to Fed Discount Window  Restricts Federal Insurance, Fed discount window access, other Federal funding/support for Swap Dealers, Major Swap Participants  Push out exemption for FDIC-insured bank affiliates may not be available to foreign bank branches without FDIC insurance  Broad-based emergency lending program exemption  Proposed legislative fix 9