Final Rules on End-user Exception to Swap Clearing Requirement under Dodd-Frank Issued by CFTC | Practical Law

Final Rules on End-user Exception to Swap Clearing Requirement under Dodd-Frank Issued by CFTC | Practical Law

The CFTC issued final rules detailing the specifics of the end-user exception to the mandatory swap clearing requirement of Title VII of the Dodd-Frank Act.

Final Rules on End-user Exception to Swap Clearing Requirement under Dodd-Frank Issued by CFTC

by PLC Finance
Published on 19 Jul 2012 • USA (National/Federal)
The CFTC issued final rules detailing the specifics of the end-user exception to the mandatory swap clearing requirement of Title VII of the Dodd-Frank Act.
On July 10, 2012, the CFTC issued final rules governing the end-user exception to the mandatory swap clearing requirement of Title VII of the Dodd-Frank Act. The end-user exception, mandated under Title VII, provides that Dodd-Frank swap clearing requirements do not apply to a swap if one counterparty to the swap satisfies all of the following conditions:
  • It is either:
    • not a financial entity; or
    • an exempt financial entity.
  • It is using the swap to "hedge or mitigate commercial risk."
  • It notifies the CFTC how it generally meets its financial obligations associated with entering into uncleared swaps.
For more information on these final rules, see Practice Note, The Commercial End-user Exception to the Dodd-Frank Mandatory Swap Clearing Requirement.