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The market risk capital rule is used by banking organisations with significant trading activities to calculate regulatory capital requirements for market risk. Technical changes to the rule reflect modifications by the Organisation for Economic Cooperation and Development regarding country risk classifications.
The final rule also clarifies criteria for determining whether underlying assets are delinquent for certain traded securitisation positions. It clarifies disclosure deadlines, and modifies the definition of a covered position. Each of these changes makes the market risk capital rule consistent with the revised capital framework that will come into effect in January 2015.
Also on Friday, the Federal Reserve made minor modifications to the Basel III revised capital framework to clarify the criteria for subordinated debt instruments that may be counted as tier 2 capital.