On August 13, the CFTC granted no-action and issued a no-action letter regarding certain FASB changes set to take effect as early as December 15, 2018 for certain IIBs, FCMs and other CFTC-registrants that are broker-dealers. The Lease Accounting Update as proposed would have resulted in a decrease in regulatory capital as compared to the current accounting treatment.
NIBA submitted a request for no-action to the CFTC on this item in March. SIFMA and the FIA also submitted documentation. In support of our request, we noted that the Lease Accounting Update is purely a matter of accounting that does not alter the existing economic or legal characteristics of an operating lease and, further, that the impact on the capital computation of CFTC registrants is an unintended consequence of the manner in which FASB’s and CFTC’s regulations interact.
Both our request and the CFTC no-action letter are posted on the NIBA website. If you have questions about the FASB rules, contact your accountant or Michael Coglianese, CPA, NIBA Treasurer (mike@cogcpa.com) or Michael Liccar, CPA NIBA Service Provider (tmccarthy@liccar.com).
NIBA No-Action Request
CFTC Letter
